In The End, Central Banking Monetary Magic Is All Nonsense, Empty Formulas, Illusions”

By Tyler Durden

A couple of anecdotal points by one of our favorite commentators, Eric Peters of One River Asset Management

Hope all goes well… “I’m a clever money maker, always have been,” said the CIO. “My father taught me well,” he continued. “And if you forced me to put my own money to work, there’d be only a few things to do.” Small idiosyncratic opportunities. “You couldn’t pay me to give my money to an equity manger.” Nor a credit manager. “No single sector gets me excited. There’s no major asset class that I would invest in.” And he paused, considering the infinite possibilities, his opportunities. “I’ve been investing since I was eleven years old, and never have I seen so little to do.” 

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Overall: “If I could, I would rewind time by many, many years, so that I could better prepare,” announced Merkel. “Wir schaffen das (we can do it) has become a simple slogan, almost an empty formula that underestimated the scale of the integration challenge,” admitted Angela, her mea culpa lifting the burden of denial, liberating her to act, to lead Europe once again. Her party had just lost its 4th regional election, this time in Berlin, as the AfD continued its startling ascent.

Just another one of history’s ironic turns. Because of course, the EU is at its core an insurance policy, written to guarantee the impossibility a dark, far-right resurrection in Germany. And like so often happens, we suffer those things we try hardest to avoid.

Like deflation. Which is something Japan has battled for decades. “Wir schaffen das,” cried Haruko Kuroda, describing the Bank of Japan’s latest monetary manipulation. When at first zero rates were not insurance enough, he invented quantitative easing, which fell short. Qualitative easing soon followed, failed. Next came negative interest rates. But the harder he tried to outrun deflation, the faster it approached. So he introduced this week’s insurance policy: quantitative and qualitative easing with yield curve control (QQEYCC – hey, if it rhymes, it might work).

“Wir schaffen das,” whispered Yellen, explaining that the Fed was hawkishly holding rates steady, while lowering the dots.

You see, when you’re unsure what’s most frightening, you insure against everything. But in the end, central banking monetary magic is all nonsense, empty formulas, illusions. 

Only people are real. Capable of darkness, greatness. And as Europe’s most powerful politician renewed her commitment to insure against a resurgence of the former, a young American entrepreneur pledged $3bln of his fortune to “cure, prevent or manage all diseases by the end of the century.”

Source: Eric Peters: “In The End, Central Banking Monetary Magic Is All Nonsense, Empty Formulas, Illusions”