Skip to comments.The Song Remains the Same
Posted on 02/28/2015 9:05:03 AM PST by Citizen Zed
Eleven trillion dollars: thats how much of so-called Quantitative Easing the worlds central banks have done since the 2008 crisis. To put that in perspective, with eleven trillion dollars you could pay off pretty much all U.S. household debt all mortgages, all car and student loans, credit cards you name it.
So what did the global economy get for $11,000,000,000,000 in QE?
Following a post-recession pop, we got collapsing world trade growth, and thats even with prices falling over the past three to four years.
Why is this happening?
Its not because this time around things are different. To the contrary, the song remains the same.
For a long time, nearly four decades, growth has been getting progressively weaker during each recovery from recession. Of course, the U.S. is a major contributor to world trade and QE, but its trend of weaker growth is present in all major developed economies.
There are two key drivers behind this declining trend: demographics and lower productivity growth. Yes, its true that weve seen pretty good U.S. jobs growth recently, but that comes with productivity growth slamming down to zero.
Japan, with its lost decades, is at the leading edge of this long-term trend. But make no mistake, Europe, and as we see, even the U.S., are not far behind. Knowing this, will a trillion or so of more QE from the ECB make the trends in these charts turn and go the other way?
“..Barack’s unpatriotic spending continues.”
Obama continues. Thank You Congress.
It’s called Deflation, and it’s not good.
But it's enormously beneficial to those holding 5, 6 or 7 digits of cash.
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