Part of the global financial mess is the result of the U.S.-China trade fight. I repeat, part of the mess.
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A much bigger part of it has to be laid at the feet of central bankers worldwide, our Federal Reserve included.
Europe has embarked on the biggest money printing operation the world has ever seen, and there's probably more to come. You may be fed up with hearing this from me, but I have to say it again: They've turned the world upside down: Over there, you lend money and the borrower pays you no interest, and doesn't give you all your money back! Japan is doing the same. Really crazy stuff, and as mark grant has been telling us: in all of human history, this has never happened before.
Here at home, the Federal Reserve actually raised interest rates in December: That’s now considered a huge mistake. And it leaves Fed Chair Jerome Powell flat-footed as the rest of the world races to the interest rate bottom. The president says he's "clueless.” A big rate cut, and soon, is now almost inevitable as our central bank scrambles to catch up.
A couple of points: Free money has not helped the countries that tried it. Germany is the classic example: Its economy is now shrinking just as German interest rates hit all-time lows!
One last one: Could it be that printing trillions of dollars or euros or yen actually has no consequences? That we've discovered a way to pay for all our social spending, without pain. There is a school of thought that says just that.
I don't believe it. I think this eventually, repeat eventually, ends in tears.
But right now, I’m going to the bank to re-fi...