One who intends to leave others better off for his having existed.


"Walking straight in a hall of mirrors" and "pretend-and-extend"

"'s getting more and more difficult to find ways of writing about everything going on in the world.

Not because there's a shortage of things to write about -- wars, propaganda, fraud, Ebola -- but because most of the negative news and major world events we see around us are symptoms of the disease, not the disease itself.

...When the price of money itself is distorted, then all prices are merely derivative works of that primary distortion... a world where the central banks have distorted, if not utterly flattened, the all important relationship between prices, risk, and reality, what good does it do to seek some sort of meaning in the new temporary arrangement of things?

If risk has been taken from where it belongs and instead shuffled onto central bank balance sheets, or allowed to be hidden by new and accommodating accounting tricks, has it really disappeared? In my world, risk is like energy: it can neither be created nor destroyed, only transformed or transferred.

...we are on an unsustainable course...

...the collective debt of the developed economies has surpassed the $100 trillion mark -- which is a colossal bet that the future economy will not only be larger than it is currently, but exponentially larger.

These debts are showing no signs of slowing down. Indeed, the world's central banks are doing everything in their considerable monetary power to goose them higher, even if this means printing money out of thin air and buying the debt themselves.

Along with this, the demographics of most developed economies will be drawing upon badly-underfunded pension and entitlement accounts -- most of which are literally nothing more substantial than empty political promises made many years ago.

...Anything that can't go on forever, won't.  We know, financially speaking, that a great number of nations are utterly insolvent no matter how much the accounting is distorted. ...there's really no point in worrying about the combined $100 trillion shortfall in Social Security and Medicare, because it simply won't be paid.

...The promised entitlements dwarf our ability to fund them many times over. ...there's no plan at all for reconciling the forced continuation of borrowing at a faster rate than the economy can (or likely will be able to) grow.

The phrase that comes to mind is 'winging it.'

The wonder of it all is that people still turn to the same trusted sources for guidance and as a place to put their trust.

...If the captains supposed to be guiding this ship are using charts that ignore what lies beneath the waterline, then you can be sure that sooner or later the ship is going to strike something hard and founder.
‘Interest on debt grows without rain’

Yiddish proverb

This proverb explains most of what goes on in policy circles these days. We are now watching Extend-and-Pretend, Episode VI: Promises for improvement amid ever growing debt levels.

...pretend to have a credible plan, but never address the structural problems and simply buy more time....

...The EU, IMF and World Bank will need to pretend they agree or accept the weaker data, which has to mean bigger deficits.

It’s a tiresome exercise to watch denial-in-action as EU governments and other policymakers try to make something so obviously unpalatable go down easy in their internal reporting.

It’s obvious that buying more time (extending) is always the number one priority, followed by projecting (pretending) that forward looking growth will reach an ever-higher trajectory in order to make the budget fit within the supposed constraints...

Such behaviour would cost you your job in the private sector, but in the economic model of 2014, which reminds us more of the Soviet Union than a market based economy, it’s par for the course. But, many would protest, it would be even worse if we hadn’t done so much to “save the system”, right?

...Negative productivity, capital flight and a system built on protecting the elite is failing.

...we are speeding towards the inflection point at which debt becomes harder to service because pretend-and-extend policy making has created a depression in investment and consumption.

...The new reality is that we currently stand face-to-face with the very deflation risk that just about everyone denied could ever happen when Q1 outlooks were written.

...the US, China and Europe are all headed for another Minsky moment: the point in debt inflation where the cash generated by assets is insufficient to service the debt taken on to acquire the asset.

...the only way to grow an economy without productivity growth is to do so temporarily through the use of debt...

...The developed economies are growing old in demographic terms, but we’re still not wise enough to realise that our current model is a Ponzi scheme rushing toward its inevitable Minsky moment. No serious policymaker or central banker is talking about the truth told by simple maths and hoping that things turn out well.

Hope is not good policy and it belongs in church,
not in the real economy."

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