The FED is out of solutions and the patient is still sick. Imagine a flu being suppressed by antidiarrheal and that’s what the FED has done via low interest rates. They cannot help themselves as they’re bankers and view the world through the eyes of a creditor.
The government bailed out banks creating even more moral hazard. Eventually, you have to let the virus take its course. We’ll survive, but there will be upheaval. The Establishment works always for the status quo, but if the river wants to leave its course it will.
ZIRP isn’t healthy and isn’t going to fix the problem. Lower debt will. A return to the 2007 regulatory system, better to go back to 1970 even, will fix it. A reduction in taxes or replacement of the current tax code with a consumption tax will do it, but no matter what the recovery of the patient will hurt.
But after an intense decline over a short period trust returns and people pick up bargains and the economy restarts. That’s the history of US deflations. The difference between previous deflationary periods is government intervention via the FED and massive Big Gov.
I hope you are correct and I am wrong. The great depression ran from 1929 to 1946. It took a World War and over 4500 work projects to pull us out of that depression. Everything I read indicates this will be much worse and much more dangerous. I think it will move us toward a world currency and our history of our standard of living will decrease and those in third world countries will rise. I guess we will all do the best we can and deal with changes as they develope.