Central banks have created a brittle economy without real savings and without much room to maneuver. Central banks now want more of the same in a bid to fix what they broke.
Every crisis caused by the unbacked paper money system expands the power of the states over economic and social life, and unfortunately, once the state has expanded its power, it is unlikely the trend will be reversed.
These famed "tools" of the central bank are nothing but cunning and arcane techniques for conjuring additional trillions of dollars out of thin air and pumping them into the global economy.
Although shocks can disrupt the pace of economic activity, they have nothing to do with the phenomenon of recurrent boom-bust cycles. The cycle requires something more. A central bank, for instance.
What we observe today is a desperate fight against deflation. We know that this situation is unsustainable, but we do not know to which side the balloon will fall.
Central banks are driving asset price inflation in stocks and real estate. That means people holding those assets get richer. But everyone else just gets higher prices.
Central banks have done nothing to end the boom-and-bust cycle. Instead, their unscrupulous interventions in credit markets just prolong the boom. But it's a huge mistake to assume that bringing market interest rates to zero will create a perpetual boom.
It is not money that funds economic activity, but the saved pool of consumer goods. The existence of money only facilitates the flow of savings. Any attempt to replace savings with money ends in economic disaster.
