They call it the New Normal(sic) for a reason: that reason is that as a result of 6 years of central-planning interventions in the global economy, an experiment that has grown far more monstrous than anything the USSR ever tried to do, everything is now broken: all conventional economic linkages, relationships and correlations you learned about in university are no longer applicable or practical in a world that has taken both Keynesian and monetary theory beyond their wildest extremes.
The result is a ghoulish, macabre collage of mishmash theories applied haphazardly in hopes that something will finally stick, and if not, at least kick of the day of reckoning a little longer.
All of that will fail, and, just as the Austrian economists predicted from day one, the entire house of cards will come crashing down in a heap of record credit. Yes, it could have been different, had the people in charge taken the correct, but difficult decision when Lehman failed, and purged the system of its credit excesses. But they didn’t, as that would have wiped out trillions in equity value where the bulk of the “wealth” and net worth of the legacy status quo is located.
So they kicked the can.
For all those sick and tired of watching the grotesque pantomime in which only the rich get richer, while everyone else is ever more impoverished, we have good news – the experiment is coming to an end. Only it is not us postulating that the entire “modern” economic system is on its last breath – here are seven slides from Citi explaining the very much intractable “problems with traditional economics“, and why the economic Titanic, floating on an ocean of central bank liquidity, is approaching the proverbial iceberg.
So, without further ado, here is everything that is broken with the traditional economic system as applied in today’s bizarro world…
This post was published at Zero Hedge on 09/23/2014.