There's A 'Gathering Storm' In The Global Economy And Central Banks Are Running Out Of Options

[Purveyor]

Source: Business Insider UK

The Bank for International Settlements (BIS) — known as the central banks' central bank — is warning there's a "gathering storm" in the global economy, in part caused by governments around the world running out of monetary policy options.

In two separate notes, published March 6, BIS economists highlighted the fragile global economic backdrop and said negative interest rates could become a reality for many more countries as central banks search for ways to stoke real growth and battle issues like tumbling oil prices hitting the economy.

"The tension between the markets’ tranquility and the underlying economic vulnerabilities had to be resolved at some point," said BIS chief Claudio Borio. "In the recent quarter, we may have been witnessing the beginning of its resolution."

"We may not be seeing isolated bolts from the blue, but the signs of a gathering storm that has been building for a long time."

Read more: https://uk.finance.yahoo.com/news/theres-gathering-storm-global-economy-084153580.html

[Wellstone ruled]

1. Way past time for Countries to stop

the Austerity and Supply Side Chicago School of Economics model. Europe was recreated via the Marshall Plan and the results speak for themselves. Along came the next Generation of Leaders and BAM,time to harvest the Profits and to Hell with the People.

And in saying that,we need a massive Government Lead National Reconstruction Program here in the USA,in order to re-energize our Nation. And we all know how that is not possible. There has always been a story floating for years about how the Rethugs want to crash the economies of the World.

[jwirr]

6. Well said. Thank you.

[Wellstone ruled]

8. Thank you.

You and I come from the same neck of the woods and we know what works and what doesn't. Been there done that and bought the damn T-shirt. Are there any jobs left in Wisconsin? Doubt it.

[jwirr]

9. Yes, we have a perfect example of what works with MN and

WI setting side by side. Sometimes I think of what WI used to be like before 1980s and cannot believe that they could get themselves into this much trouble.

[Wellstone ruled]

16. When the Rethugs got control in

Wisconny,you knew there was going to be hell to pay. Once the Politics start to blem the Packers,then you will see a major switch. That is the last glue holding that Badger State together.

[jwirr]

22. And that is down right sad. I donated to Russ Fiengold the

other day as I would like to see him back in. I don't know if he is exactly progressive but he is Democratic.

[Wellstone ruled]

25. Russ is what I call the New Dem.

He is in the mold of Pat Lucy,Herb Kohl,and Jim Obey Governor Knowles. Has to amp up his voice,increase the volume,Wisconsin Progressives used to be on point,and loud and no bull crap. Hope Russ is doing the College circuit,especially Eau Claire,Lacross,Superior,Green Bay,Stout,White Water and Madison. Stevens Point and River Falls are smaller schools with mostly conservative small town and farm students.

[forest444]

17. Hear, hear.

The Fed seems to have no trouble printing $20 trillion to bail out the banks from their own derivatives mess, plus another $20 trillion or more by way of all the QEs. The European Central Bank did something similar, though on a smaller scale.

But the minute anyone mentions monetary stimulus for the real economy, just stand back from the litanies of "inflation, M3, money velocity, uncertainty, monetization, aarrgh!"

What sons of bitches.

[abelenkpe]

26. +1000 nt

[happyslug]

18. Not quite accurate, Europe did not recover till the 1960s...

The Marshall plan was the result of the US in 1945 having produced 1/2 of the world wide Gross World Product (GNP). For every dollar of production that occurred outside the US, the US produced a dollar. This also meant the US had a HUGE surplus in Trade. People overseas wanted US Goods but did not have the money to buy them.

There was NO WAY that could be sustainable. Thus the US had to decision, a world wide depression that would have made the Great Depression look mild OR give some of that money back to the countries that were buying US products. The US opted for the later in the form of the Marshall Plan. The Marshall plan was money given to locals to assist them to building back their industrial might. By 1948 the Marshall Plan had been extended to Germany and Japan, do to fears that the Communists were gaining strength in both countries (and the Communists were, thus Stalin's hostility to the Marshall plan).

Once it was decided Germany had to be re-industrialized (as opposed to the Plan put forth by the FDR administration in early 1945, which was to return Germany to an Agricultural dominated Country), Europe started to recover. The Korean war help Japan recover, for the US relied on Japanese Industry to support its war effort in Korea.

Thus by the time Eisenhower was in power (He was elected in 1952), most of the Marshall plan money had been spent and the Marshall Plan ended. Truman was NOT liked for giving away US money to Europe or keeping taxes high so he could do so (Thus the GOP won in 1952) but Truman's plan set up the US and Europe for the 20 years afterward.

Come the 1970s, the situation was changing. The WWII generation of young men were then in charge (JFK and Nixon were both WWII veterans). The US no longer produced 1/2 of the world GNP and had cease to be a net Oil exporter. The US had lost Vietnam, but had contained Communist expansion that had been the Soviet and later Red China's policies of the 1950s (and in fact by 1972, Red China and Russia were seeing each others as enemies not friends and in fact there were people in Washington who wanted to abandon South Vietnam for that would free Red Chinese Units to be transfer to China's border with Russia).

It was in this time period, the late 1960s and early 1970s, that the change occurred. The old new dealers in the US were dying out, the WWII veterans were replacing them, but the WWII veterans did not have the vision of the New Dealers, but also did not want to abandon the New Deal. Thus the progressive movement stopped in the 1960s and a conservative outlook was adopted (please note by Conservative, I mean a true Conservative, no change unless it is needed, the GOP of today are NOT conservative, they are reactionary, they want the US to return to a time period that never was). This happened in Europe, as its WWII generation took over, no new social programs, but no abandonment of them either.

Anyway, come Reagan and Thatcher, the Conservative Movement was taken over by the GOP Reactionaries and you slowly saw the dismemberment of the New Deal except what people overwhelmingly objected to (Thus no changes in Social Security and only tampering with Unemployment). Europe was going through the same change, the WWII generation was still in charge, but slowly being push aside by the 1960s reactionaries. You see this start under Reagan, then accelerate under Clinton (our first President since Hoover who had no connection with WWII). The WWII generation slowly gave up power to these reactionaries who demanded a return to a past where they had the right to make money any way they could and the hell with society as a whole. That concept had been rejected by the New Dealers and the WWII generation but fully embraced by the generation that came of age under Nixon and Reagan.

Thus my point, we are in the third generation since the New Deal and it is this third generation that is advocating "Austerity and Supply Side Chicago School of Economics model". Now the generation coming of age now, are embracing one of the few people who never abandoned the New Deal, it is the result of the Austerity since Reagan, they are seeing themselves victims of the system and are demanding change. This reminds me of the Democratic Revolt of 1896, when the progressive took over the Democratic Party from the "Me to" Democrats represented by President Glover Cleveland. The attack on Sanders is like the attacks on Bryan, they question is economics, his temperament and his ability to lead, but are shocked at his massive support (Herbert Hoover once called the New Deal, "Bryanism without Bryan" and in many ways it was, that is how much of a revolution the 1896 election was. Bryan stayed progressive till he died (his action in the Scoops Monkey trial was an attack on Social Darwinism more the evolution, Bryan had no problem with students being taught evolution, but he drew the line at Human Evolution for it was tied in with Social Darwinism, and that concept of people NOT working together for the common good, was a concept he rejected).

Side note: Do NOT give me the famous Speech Bryan "gave" in the Scoops Monkey Trial. The one everyone cites, for it never occurred, the Speech in the Play "Inherit the Wind" was a McCarthy Speech of the 1950s, something Bryan would have rejected. Bryan did make a speech at the end of the Trial, no one ever cites it for it makes the point that something like DU is good, for we discussion issues, something Bryan loved to do.

Bryan's last Comment at the trial:

Bryan--I don't know that there is any special reason why I should add to what has been said, and yet the subject has been presented from so many viewpoints that I hope the court will pardon me if I mention a viewpoint that has not been referred to. Dayton is the center and the seat of this trial largely by circumstance. We are told that more words have been sent across the ocean by cable to Europe and Australia about this trail than has ever been sent by cable in regard to anything else happening in the United States. That isn't because the trial is held in Dayton. It isn't because a schoolteacher has been subjected to the danger of a fine $100.00 to $500.00, but I think illustrate how people can be drawn into prominence by attaching themselves to a great cause. Causes stir the world. It is because it goes deep. It is because it extends wide, and because it reaches into a future beyond the power of man to see. Here has been fought out a little case of little consequence as a case, but the world is interested because it raises an issue, and that issue will some day be settled right, whether it is settled on our side or the other side. It is going to be settled right. There can be no settlement of a great cause without discussion, and people will not discuss a cause until their attention is drawn to it, and the value of this trial is not in any incident of the trial, it is not because of anybody who is attached to it, either in an official way or as counsel on either side. Human beings are mighty small, your honor. We are apt to magnify the personal element and we sometimes become inflated with our importance, but the world little cares for man as an individual. He is born, he works, he dies, but causes go on forever, and we who participated in this case may congratulate ourselves that we have attached ourselves to a mighty issue.

http://law2.umkc.edu/faculty/projects/ftrials/scopes/day8.htm

More on the Scoopes Monkey trial:

http://www.themonkeytrial.com/

Here is the Speech Bryan had planned to give, but since Darrow did not give a closing, under the rules of that court, neither could Bryan:

http://www.csudh.edu/oliver/smt310-handouts/wjb-last/wjb-last.htm

Comment on Mencken's attack on Bryan, Mencken would be a DLCer today, thus his hatred of Bryan:

http://www.angelfire.com/linux/vjtorley/mencken2.html

Bryan's Cross of Gold Speech:

http://www.let.rug.nl/usa/documents/1876-1900/william-jennings-bryan-cross-of-gold-speech-july-8-1896.php

Bryan's Income Tax Speech of 1894, where he tears apart many of the same economic arguments you hear from the right wing to this day:

http://www.starkman.com/hippo/history/bryan.shtml

[Wellstone ruled]

20. Thank you so much for you thread.

Being older than dirt,forgot to mention Eourpe really did not get going until the sixties. Without Marshall,Eourpe would have never made it. Remember the DP's arriving in 47 and 48,many were on the verge of starvation. Some of our Relatives were able to immigrate before the Wall. And as you rightly say,the World did avoid a major depression which with out a doubt would have been worse than the Thirties.

Not many would even remember the who what and why of the old New Dealers and what they stood for. As you mention,we are in the Third and Fourth Generations past the New Deal. And does it really show,people like Trump,Cruz,and a liteny of Right Wing Nut Jobs,are the flavor of the day. And as for anything for we the people,forget about it.

Have a ton of hope for the twenty somethings coming up,if they can keep their collective heads off the I-phone,and appears many are at the reflection point of 1960 and are waking up. Hope so.

[bemildred]

2. Perhaps arranging your economy to depend on permanent growth was a mistake. nt

[PoliticAverse]

27. Perhaps arranging the economies to depend on ever increasing debt was a mistake...

cause eventually the music stops.

[bemildred]

28. Not unrelated issues either. nt

[Ruby the Liberal]

3. You can't prime an economy from the top

The abject failure of supply-side laffer-curve economic modeling proved that.

If you want to goose the economy, it has to be done from the bottom up. Just look at the ratios for payout on tax cuts vs unemployment and SNAP. One gets us ~30 cents on every dollar spent and the other 2 pay us back ~1.30 & 1.60.

[dixiegrrrrl]

4. "negative interest rates could become a reality for many more countries "

Yes.
and that is so bad for us.
right behind NIRP, there is a push for cashless...in which we lose all control over our money, it will only exist in bits in the virtual world,
and then banks can take the negative interest that we would have to pay THEM right our of our virtual accounts.

Sound farfetched?

Google "cashless socity" and google "negative interest rates"

When the BIS, and the IMF, and the central banks start talking about it, as they are doing, you can be sure they are planning it,
and Japan is not the on country already gone to negative rates.

[KentuckyWoman]

14. I used to pay my bank to access my own money.

They would hold it for free. If I wanted access to it I had to pay them. Every check I wrote cost me something - I forget how much. When ATM's came to town in the late 70's it cost me something to get my money out that way too. Once I had enough sitting in that bank they quit charging me to access my money. (Free checking)

Now they have free accounts if you use online banking or direct deposit. Eventually you'll have to pay on those as well and some banks have already moved in that direction with a fee if account goes below a minimum.

Yet another case for credit unions.......

[KoKo]

23. Yes...its being talked up on the financial sites.

Thanks for mentioning.

[Helen Borg]

5. We all know it's a huge Ponzi scheme.

And it will come to a disastrous end.

[SoapBox]

7. They've plundered the populace until it can't be plundered anymore.

Trickle down never worked.

The billionaires and trillionaires have taken just about all there is to take...and then it all crumbles.

Time for a Political Revolution.

[Earth_First]

10. Time for the guillotine...

Two bits a gander!

[The Second Stone]

11. Tax oil that is being sold at prices so low that it threatens

to cause deflation.

Problem solved.

Now banks don't get to impose taxes, so I suppose that it isn't a bank option, but a legislative option. But it really is high time to tax oil.

[Cassiopeia]

15. We can't tax our way out of this

especially a tax paid by the broken and broke masses.

[The Second Stone]

21. we can if the proceeds go to health care

Most of the energy used in this country is used by the corporations and the wealthy. We can also allow minimum wage workers to deduct gas tax.

[Festivito]

12. Too few rich cashing in too many instruments calling for too much money to buy too few goods.

They know it's coming. They sell out into commodities and do not care when dollars become worthless. They can buy whatever they want very cheaply because dollars will be cheap.

$100,000 for a loaf of bread. No problem for them someday soon.

[Kelvin Mace]

13. They will just double and triple down on austerity

Last edited Tue Mar 8, 2016, 11:06 AM - Edit history (1)

Governments are now that stupid and that controlled by corporations.

[4dsc]

19. Consumerism is dying a slow death and we are all here to watch it

so there is no rescuing a failed economic model that has been held up for the past 40 years with more of the same old tricks. Nope, we are headed for a crash landing and it's going to suck.

[liberal_at_heart]

24. Some Americans(those who are financially comfortable) have gotten complacent again.

They think Obama and the Democrats fixed everything. They are so wrong and most Americans(those who lost jobs, homes, retirement) know everything has not been fixed and know it will happen again. The question is will the tax payer be on the hook for it again and if so will it finally be enough to throw the people into a full blown revolt?

[lark]

29. This is one of those easy yet impossible things.

If country's make the rich and rich corporations pay their fair share, things would turn around very quickly. Trying to squeeze pennies from the poor isn't working and won't work and that's what's keeping the economy so much slower than it could be. Pay people decent wages so they have buying power and make the rich pay their share and voila, there's the recipe for economic success.

[Dyedinthewoolliberal]

30. As a regular

pay check to pay check (more or less) working person, how am I supposed to think about this? What can I do?