“We have a 1930s-style deflationary depression, which is what happens if we keep raising interest rates. Or, a Weimar Germany kind of hyperinflation, which is what happens if we try to inflate our way out of our current debt problems. And that’s it. This is not something on the distant horizon anymore. It’s something right here staring us in the face.”
This is not Lyndon LaRouche, but trader John Rubino, speaking on Feb. 11 with Greg Hunter’s USA Watchdog. He goes on: The economy is so weak, with so many different financial bubbles, that one bubble pop could bring the entire system down rapidly. Rubino says to look out for big European banks to go insolvent as a warning sign of trouble if the trillion-dollar derivative complex blows up. (https://usawatchdog.com/global-debt-death-spiral-john-rubino/)
Rubino is typical of a growing number of financial analysts who see that the Emperor has no clothes.
Another one is Bank of America strategist Michael Hartnett, who said that the U.S. stock market is doomed even if a recession is avoided.
In a parallel world, central banks are sticking to the course of deflationary rate hikes. Loretta Mester, president of the Cleveland Federal Reserve Bank, said she was for a 50 basis point increase at the last FOMC meeting and that “we will need to bring the Fed funds rate above 5% and hold it there for some time to be sufficiently restrictive to ensure that inflation is on a sustainable path back to 2%,” in a speech on Feb. 16.
In Europe, both Christine Lagarde and Isabel Schnabel said the ECB will do the same: “In view of the underlying inflation pressures we intend to raise interest rates by another 50 basis points at our next meeting in March, and we will then evaluate the subsequent path of our monetary policy,” Lagarde said before a European Parliament committee on Feb. 15.
And Schnabel said in a Bloomberg interview Feb. 17: “Given the current level of policy rates and the level and persistence of underlying inflation, a rate hike by 50 basis points is necessary under virtually all plausible scenarios in order to bring inflation back to 2%.”
One wonders whether Mester, Lagarde and Schnabel’s speeches are cloned at an Aged Feminists Club.
