Nothing like a bear market/uncertainty/volatility/lack of political will, to bring out people suggesting the simple solutions to solve all of the worlds problems...
Think it started with Mr. Martin Wolf, then Mr. Paul Krugman, then Mr. Paul McCulley (ex-PIMCO) - all widely respected and renowned economists/financial market commentators - who started out with the talk that its once again "time to think the unthinkable and start printing again"...
They base their analysis, or "arguments on standard textbook macroeconomics", as one of them said.
I will not place myself in favor or against their argument here, as their infallible textbook logic will surely overwhelm me. But I will suggest that all of these so called leaders and macroeconomic commentators need a good dose of humility, they need to say "we just dont know"...this time.
"We just don't know", respects the law of unintended consequences, which is what happens when a simple system tries to control a complex system - contrary to popular belief, macroeconomics, is a complex, evolving, high-feedback, incentive-driven system."
Any simple solution, such as, to start printing again = more monetary and/or fiscal stimulus, or spending just for the sake of spending and easing just for easing's sake, will only create increasingly negative unintended consequences - artificially inflated economic rebounds fueled by speculative financial asset rallies.
We all know how those end...
Couldn't find a better way to end this with Einstein's definition of "insanity: doing the same thing over and over again and expecting different results." Or as Yogi Berra noted, "in theory, there is no difference between theory and practice. In practice, there is."
CAVEAT EMPTOR
Think it started with Mr. Martin Wolf, then Mr. Paul Krugman, then Mr. Paul McCulley (ex-PIMCO) - all widely respected and renowned economists/financial market commentators - who started out with the talk that its once again "time to think the unthinkable and start printing again"...
They base their analysis, or "arguments on standard textbook macroeconomics", as one of them said.
I will not place myself in favor or against their argument here, as their infallible textbook logic will surely overwhelm me. But I will suggest that all of these so called leaders and macroeconomic commentators need a good dose of humility, they need to say "we just dont know"...this time.
"We just don't know", respects the law of unintended consequences, which is what happens when a simple system tries to control a complex system - contrary to popular belief, macroeconomics, is a complex, evolving, high-feedback, incentive-driven system."
Any simple solution, such as, to start printing again = more monetary and/or fiscal stimulus, or spending just for the sake of spending and easing just for easing's sake, will only create increasingly negative unintended consequences - artificially inflated economic rebounds fueled by speculative financial asset rallies.
We all know how those end...
Couldn't find a better way to end this with Einstein's definition of "insanity: doing the same thing over and over again and expecting different results." Or as Yogi Berra noted, "in theory, there is no difference between theory and practice. In practice, there is."
CAVEAT EMPTOR
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