Globalization and financialization are dead

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https://www.zerohedge.com/economics/globalization-financialization-are-dead-and-so-everything-depended-them

 

That globalization and financialization are dead is revealed by what Federal Reserve bailouts and fiscal free-for-alls cannot do:

1. They cannot create creditworthy borrowers out of thin air like the Fed creates dollars out of thin air.

2. They cannot force lenders facing mass defaults to loan more money to uncreditworthy borrowers

3. They cannot force creditworthy borrowers to borrow money.

4. They cannot reflate asset and consumption bubbles that have popped.

5. They cannot restore confidence in long, fragile supply chains.

6. They cannot magically turn unprofitable enterprises into profitable enterprises.

7. They cannot create income streams--revenues, profits, wages, etc.--with bailouts that continue the perverse incentives of moral hazard or "free money" designed to give debt-serfs enough cash to continue making their loan payments.

8. They cannot forgive debt payments without destroying the wealth held as debt: mortgages, student loans, auto loans, credit card debt, corporate junk bonds, etc. are assets that lose their value once borrowers default.

9. The Fed can buy impaired debt, but that doesn't change their abject powerlessness (points 1 through 7 above).

Financialization was never sustainable, and neither was the destructive globalization it enabled. Any system that depended on the ever-expanding exploitation of new resources, debtors and markets could never be anything but fragile. The ferociousness of its rapacity masked its inherent weakness, a weakness that is now exposed as fatal.

 

 

SOOOOO Will it be a "debt jubilee" or a "Reset" OR "both" OR "none"?

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In the meantime while this things sorts itself out I will be holding real scissors clipping my own actual hedges...AS MY HEDGE!

 

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