When I listen to the world’s leaders, I simply get confused.
My bewilderment is directly related to the goals and objectives of each country’s central bank.
For example, it seems that in Spain the need for continued finance is to merely prop up the banks and maintain a world-class soccer team. I can understand the latter, but not the former.
Neither entity, however, employs many people so it would seem that on a per dollar and per job basis, Spain is not getting a very good bang for the buck.
It’s the same story for Greece, Italy, Portugal, and Ireland.
We keep hearing that Europe has been “saved” by the latest agreement or pronouncement. I guess one needs to clearly define “saved” and since it doesn’t encompass anything specifically about employment, it appears that being “saved” is like being kissed by your sister.
Even if the banks were awash in cash, would they lend? Would employers employ? And could workers work?
It seems apparently not.
The United States is no different. As twist programs, open windows, and QEs continue to be implemented or brandied about as weapons for recovery, the real economy continues to slip ever lower.
The most recent ISM number showed the shift from growth, to boom, to bust, and finally to contraction, is ultimately playing out.
Prices are plunging and new orders are falling of the cliff. Soon, it will be time for U.S. Fed officials, like their European counterparts, to make an announcement about more of “something” that will be needed in order to finally commence financial recovery.
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Then, once again, like Europe, the markets will respond for a brief moment and the mainstream media will declare, once again, we’re “saved.”
However, as before, the central bank’s actions will not persuade banks to lend, will fail to convince employers to employ, and will not get workers working.
My genuine perplexity arises because of the blatant disconnect that exists with the so-called success of the QE programs and other actions in propping up the zombie banks and keeping the markets afloat compared with the obvious failure at restarting employment. Clearly, the lack of bang for the buck in Europe also exists right here in the United States. Sadly, as real unemployment continues to increase worldwide, the pronouncements of success will ultimately fall on deaf ears, and sooner rather than later demands will be made for a new direction.
And on that fact, I have absolutely no confusion.
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