David Stockman economy Q&A: Economic disaster in the works – USATODAY.com: "Q: But the unemployment rate is falling and companies in the Standard & Poor's 500 are making more money than ever.
A: That's very short-term. Look at the data that really counts. The 131.7 million (jobs in November) was first achieved in February 2000. That number has gone nowhere for 12 years.
Another measure is the rate of investment in new plant and equipment. There is no sustained net investment in our economy. The rate of growth since 2000 (in what the Commerce Department calls non-residential fixed investment) has been 0.8% — hardly measurable.
(Non-residential fixed investment is the money put into office buildings, factories, software and other equipment.)
We're stalled, stuck."
And wait for it...:
Q: What will 10-year Treasurys yield in a year or five years?
A: I have no guess, but I do know where it is now (a yield of about 2%) is totally artificial. It's the result of massive purchases by not only the Fed but all of the other central banks of the world.
Q: What's wrong with that?
A: It doesn't come out of savings. It's made up money. It's printing press money. When the Fed buys $5 billion worth of bonds this morning, which it's doing periodically, it simply deposits $5 billion in the bank accounts of the eight dealers they buy the bonds from.
Q: And what are the consequences of that?
A: The consequences are horrendous. If you could make the world rich by having all the central banks print unlimited money, then we have been making a mistake for the last several thousand years of human history.
According to the Keynesians (or is that Kenyans?, I always get confused), all of human history is a mistake and we should -- to quote the chairsatan -- just rain green paper from helicopters and everything will be great!
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