Detlev Schlichter: “When they stop buying bonds, the game is over.”

Herr Schlichter begins the New Year as I suspect he means to go on, with another excellent analysis of the global market financial position.

Here’s my favourite quote:

“We do not live in Paul Krugman’s parallel universe of Keynesian fiscal stimulus, where every dollar spent by the government magically translates into 2 dollars of real GDP growth. Here, on planet Earth, the constant shift of resources from private markets to the state bureaucracy weakens the economy. Shrinking the private sector and growing the public sector kills economic growth. In the perverse logic of the modern welfare state, this then requires even more state spending in the next period. As the economy continues to struggle, public sector outlays will grow while tax receipts will shrink.”

Read more.

Here is the video which inspired Detlev’s article:

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About Andy Duncan

An Austrian Internet Vigilante trying to live Outside the Asylum
This entry was posted in Austrian Economics, Blogging, Goldbugs and tagged , . Bookmark the permalink.

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