Northern Jitters – Another Bubble Economy Goes BustSubmitted by jrd3820 on Thu, 04/04/2013 - 16:24
April 3, 2013 | Author Pater Tenebrarum
We occasionally write in these pages about countries that are widely assumed to have either escaped the crisis, or are held to represent bastions of fundamental economic soundness amid a sea of misery. We are doing this mainly to show that they have not and are not.
In fact, as we have pointed out with regard to various cases ranging from Canada to Denmark, there are actually almost no fundamentally sound economies in sight anywhere. The reason is in every case the same: first a policy is instituted that is characterized by the nowadays widely accepted doctrines of Anglo-Saxon central banking socialism, according to which prosperity can be achieved by artificially suppressing interest rates and/or printing money until the cows come home. Then invariably a credit-driven malinvestment bubble emerges, until in the end the whole house of cards collapses, usually the more spectacularly the later in the game it happens.
The distortions have never been greater, judging from credit and money supply data. Often the motives of central banks are predicated on even worse ideas than those espoused by the Bernanke dog-and-pony show, such as the notion that a strong currency is somehow 'bad' and must be suppressed by hook or by crook (see the Swiss and Danish National Banks as examples for this tendency). This is simply Mercantilism, which doesn't even deserve to be called an economic doctrine – it is an absurdity whose proponents should be deeply embarrassed.