Would the U.S. government pressure the Federal Reserve to suppress interest rates to keep its borrowing costs down? That doesn’t sound implausible. From Charles Hugh Smith at oftwominds.com:
The expediencies and policy extremes have yet to be explored, much less exploited.
Napoleon is reputed to have said, “Do you know what amazes me more than anything else? The impotence of force to organize anything.” This is the lament of someone holding the reins of power: that this earthly power has limits.
Two things amaze me:
1. The public’s complacent confidence in the permanence of the global financial system. Put another way, what amazes me is the scarcity of awareness of the financial system’s fragility and vulnerability to collapse, a fragility that has increased as a result of policy extremes enacted to maintain a facade of security and confidence.
2. A general lack of appreciation for how few steps we’ve taken on the path of extreme central state/bank policies, a path that stretches over the horizon, beyond what we conceive as possible.
This complacency extends to proposed solutions to this systemic fragility. For example, many believe that all we need to do to fix the system is return to sound money such as the gold standard or a bitcoin-based system.
The possibility that there are no solutions doesn’t compute, as it goes against the zeitgeist of optimism: of course there’s a solution, preferably a technological solution that enables a trillion-dollar monopoly or cartel.
The widespread confidence in a predictably secure financial future is equally amazing. Sixty years of stability has generated a recency bias of immense strength: of course we can plan our retirement 20 years hence, for the future will naturally be a seamless extension of the recent past.
