Space Oddity and Helicopter Money
The comments below are an edited and abridged synopsis of an article by Egon von Greyerz
Central banks have lost control. Since 2006, the Fed, the ECB, the BOJ and the PBOC have increased their balance sheets from $5 trillion to $25.5 trillion. The majority of the extra $20 trillion has gone to prop up the financial system.
Even so, the world economy is more rudderless than ever, but money creation is part of the problem. On the back of central banks’ $25 trillion balance sheets, global debt has exploded from $125 trillion in 2006 to $280 trillion today.
None of this colossal extra debt has benefitted ordinary people. It has propped up the banks and made the gap between the haves and have-nots dangerously high. In the US, 10% of the population hold 70% of the wealth. No wonder there are protests and riots. And as the economy deteriorates, the violence is going to increase substantially.
Up for discussion: the space oddity (central banks and governments have lost control); sound money; sound money must be scarce; the end of the end (the final phase of this economic era); the disconnect is coming to an end; inflate and die; will Deutsche Bank cause a systemic collapse; the Fed and the ECB are standing by with helicopter money; and political disarray and anarchy.