Thursday, 5 May 2016

Larry Lindsey Warns "Nothing Will Change Until The System Collapses Under Its Own Weight" | Zero Hedge

Larry Lindsey Warns "Nothing Will Change Until The System Collapses Under Its Own Weight"


Via Larry Lindsey of The Lindsey Group...

Negative Rates and the Austrians' End Game

Our training and bias have always been toward policy activism -- that tweaking this or changing the dial on that can always make things better.  [But] critics of activism, often lumped into the 'Austrian School,' argue that this will inevitably end badly.
Tweaking and dialing are addictive, both to the policymaker and to the governing class. Inevitably, this will lead to an unsustainable amount of tweaking and dialing and an endgame in which policymakers become powerless as the state's monetary and fiscal dials are no longer functional and the state is, in effect, bankrupt. But as states never go bankrupt, they then must seize the assets under their dominion through either inflation, taxation and confiscation.
Our activist training tends to lead us away from these thoughts until [a] more-worldly individual -- in this case, an Italian friend and client (and a history buff) -- reminded us of this theme.
The Roman Empire tried all three. The medieval popes had their Jubilee Years in which all debts, particularly their own and those of other sovereigns, were forgiven. Debasement, grinding taxation, and confiscation from disfavored groups (often the Jews) were all part of the process.

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