[Mind's Eye] Re: Self Fulfilling Hypnoses

I hear you Allan; but this particular current fibrillation is more
systemic. The perceptual issues arise because we are applying steady-
state macroeconomic frames to system-wide transition states, and the
makets just dont get it. So, there's a communications issue right
there.

The specific challenges for "developed" economies is growth and debt.
The inverse pressure is particularly intense bcause of the size of
third party debt obligations (hence the dysfunctional hyper-
sensitivity to ratings outlooks); as with business cycles, one would
normally assume greater debt to fund growth to pay down debt; in this
particular environment, greater debt leads to debt quality uncertainty
which drives up cost of borrowing, which constrains the growth you
leveraged for in the first place.

The solution, to me, requires will, commitment, frame breaking, and a
good deal of creative thinking. FIrst we need to suspend the inflation
"rule" for a transition window. Then Central Banks need to hold more
short term sovereign liabilities to provide "breathing space". Then
Treasuries need to take a scalpel to taxes, particularly but not
limited to transaction based taxes such as VAT, to spur economic
activity aggressively. Then to create sovereign long term retail
income bonds to fund fiscal shortfalls.

Just to be sure, we're here taking about the difference between growth
rates of 1-2% (current) and 4-5% (target). We're not taking about an
economic calamity, though you would not know it with the markets and
media dancing to their own music. It's very useful to bear that in
mind always.

On Aug 19, 3:31 pm, Allan H <allanh1...@gmail.com> wrote:
> My guess is people let them.. they take the word of and ?authority? and call
> it good.   there is no challangee to the those that are creating the problem
> in the first place.. aka  bankers, stockmaarkets, corporations,, greedy
> individuals
> Allan
> On Aug 19, 2011 1:12 PM, "paradox" <eadohe...@hotmail.com> wrote:
>
>
>
> > Recently, i read of an "authority" on institutional debt proclaim that
> > a global recession was now inevitable. My first thought was that this
> > was something of a curious "God like" statement, which was actually
> > plain and simply wrong. There is actually next to no risk of a global
> > recession.
>
> > How do they get away with stuff like this, i wonder?- Hide quoted text -
>
> - Show quoted text -