Thursday, September 01, 2016

John Maynard Keynes was a crackpot. So are his followers. All of them.

Gary North reports:
We now live in Keynes' world of ZIRP. It will not be sustained. There will be corporate defaults, as feared. There will be massive losses in the stock market, as feared.

What goes around comes around. That which was crackpot economics in 1936 is still crackpot.

The crackpots who run the economics departments, the central banks, and the hedge funds have had their days of wine and roses. They have finally adopted the ZIRP economics of Keynes, where massive government deficits never end, and interest rates are zero.

But there comes a day when drunks must either sober up or die. They run out of money. There also comes a day when bartenders -- buyers of government bonds -- decide not to roll over the loans. They no longer listen when the drunk says, "Put it on my tab."

But, for now, investors buy ZIRP bonds and NIRP bonds.

We do not live in Keynes' prophesied neverland. We live in Keynes' "you can trust the national government not to default" land.

The essence of Keynesianism is this: "So far, so good." This is the confession of faith of a man who has leaped from a 30-storey building as he passes the 15th floor.
Keynesian economics is one big fraud.