The Five Stages of Central Bankers’ Failure

Central bankers are now in the denial and anger stages of Kubler-Ross’s famed stages of loss: denial, anger, bargaining, depression and acceptance. Central bankers are in denial that all their trillions of dollars, euros, yen and yuan have completely and utterly failed to achieve the desired result: “organic” (i.e. unmanipulated by central states/banks) expansion of productivity, investment and household earnings.

Central bankers not only continue to insist their free money for financiers will eventually “trickle down” to the masses–they’re angry that the masses aren’t buying it. Central bankers are now blaming the masses for maintaining a perverse psychological state of disbelief in the omnipotence of central banks and their policies.

Central bankers are raging at the psychology of hesitant households, which they finger as the cause of global weakness: if only people believed everything was great, they’d borrow and blow tons of money, and the ship would leave port with a full head of steam.

The central bankers have spent seven years constructing “signals” that are supposed to create a psychological state of euphoria that leads to more borrowing and spending. The stock market is at all-time highs–don’t those stupid masses get it? That’s the “signal” that all’s well and they should get out there and borrow more money to enrich the banks!

Central bankers’ anger is not directed at the source of the policy failures–themselves–but at the masses, whose BS detectors suggest all the signals are manipulated and therefore worthless. The skeptical psychology of the masses is akin to the mark at the 3-card monte table: the crooked dealer (in this case, the central banks) has let the mark win a few rounds to “prove” the game is honest, but the mark remains skeptical.

This is infuriating central bankers, who counted on the marks falling for the rigged game. This wasn’t supposed to happen, they rage; the Keynesian bag of tricks was supposed to work. Stage-managed perception (i.e. rising markets mean the economy is healthy and vibrant) was supposed to trump reality (i.e. the economy is sick, dependent on the dangerous drugs of debt and speculation).

Next up: bargaining. Central bankers are kneeling at the false gods of the Keynesian Cargo Cult and saying that they’ll offer “helicopter money” (more fiscal stimulus) if only the financial gods restore “growth.”

They hope that by being “good central bankers” the gods will delay the inevitable destruction of their empires of debt.

There are now signs of debilitating depression in central bankers. The failure of their policies is finally sinking in, and central bankers are sagging under the depressing reality. They look somber, freeze up at the microphone, and have withdrawn from “whatever it takes” euphoria as they realize that another round offree money for financiers and manipulated markets will only make the problems worse and erode what’s left of their crumbling credibility.

Only when central bankers accept the complete and utter failure of their policies and accept the reality that their policies have increased wealth inequality and crippled the global economy with debt, speculation and manipulation, can we finally move forward.

Until then, we’re stuck with the world central bankers have created: a world of rising wealth and income inequality, of permanent manipulation of markets as a means of managing perceptions and of speculative debt/leverage bubbles that will burst with a ferocity few expect or understand.

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  • Jay

    One of the most frequent themes on ZeroHedge and other websites is the idea that what central bankers have done since 2008 amounts to “Keynesianism.” Absent a systemic and experimental approach to addressing the causes and aftereffects of the financial meltdown, like FDR’s New Deal, the results were predictable. In this downturn, we didn’t get a Pecora Commission that examined exactly what happened on Wall Street and diagnosed effective legislation like the Glass-Steagall Act. We didn’t get a Civilian Conservation Corps (CCC) to employ youth for useful social projects like creating access and infrastructure for state and national parks. We didn’t stimulate the economy from the bottom up (Keynesianism), didn’t shore up or create new infrastructure (Keynesianism), and didn’t try and convict a wide swath of financiers and lawyers who were involved in obvious violations of state and federal law. The Federal Reserve tried to stimulate the economy with the tools it had, but since everything is stacked against the lower and middle classes from getting or maintaining any wealth, and our legislators refused to engage in any *actual* Keynesian economic stimulus, it didn’t work, because “trickle down” “supply side” voodoo economics doesn’t work, and it never has. Tax cuts for the rich haven’t produced economic benefits for over forty years, so what did the GOP congress and Barack Obama do? They made George W. Bush’s disastrous tax cuts for the rich permanent. The results of decades of conservative economic policies have created an economic morass that is impossible to escape. Tipping the scales against labor unions has led to declining wages for working people across the board. “Free” trade agreements has shipped American jobs overseas. Congress has passed bills that cut giant holes in the social safety net, including the practical elimination of unemployment insurance, cutting food stamps, and bankruptcy regulations that make it impossible for poor individuals to get out of debt (but easier for corporations to declare bankruptcy to get out from pension payments: example–Friendly’s). Every such bill has stacked the economic and legal situation against the ordinary citizen, for the greater glory of the corporate elite and the wealthy. Now these conservative/neoliberal fuckwits want to destroy the Social Security system. Don’t let them do it! They’ve been wrong about everything since Ronald Reagan. Why should anyone listen to them now?

    • Brockland A.T.

      Paragraphs, please? Wall of text is painful.

  • Brockland A.T.

    They’ll probably skip ‘depression’ for their class and force the rest of us to ‘accept’ it.

  • No country in the history of the world has printed and spent itself into prosperity. NEVER!

    May 19th, 2016 Comparing the cost of living between 1975 and 2015

    You are being lied and fooled when it comes to inflation data and the cost of living. Inflation is widely misunderstood by the public. Even economists tend to have a hard time coming to a general agreement to the true definition of inflation.

    http://www.mybudget360.com/cost-of-living-compare-1975-2015-inflation-price-changes-history/

  • Jan 19, 2016 Market Crash Explained In 1 Chart

    In this must-watch video, author Michael Maloney explains what is happening in the equity markets using a chart created from the Fed’s own data. Never before has the Fed’s meddling in the market’s been so transparent, and as Maloney says “We have a long way to fall.”

    https://youtu.be/QT1suJ9cYI8