Yesterday, I came across this work: Powell Hikes Herald “The Minsky Moment”. This is a good read and you could learn much in 5 minutes. Yet, there is so much more to the story.
The USA has been in economic depression since 2009. QE merely has papered over the decline by making current dollar quotations higher for equities.
Yet, because of lockdowns, QE dollars went into things rather than stocks and bonds. That made the inflation (QE) obvious.
If they economy had been growing, there would have been no need for Quantitative Easing.
Now, taking away QE, it should be clear that we're in an economic depression that is only going to get worse. Prices will remain high for a long time until all people who should go bankrupt in fact do.
That is going to to take years. Likely though, the Fed Res will not let that happen. But on lower output, the next round of QE will increase prices again since goods output will not grow to match.
ASEAN, India, China and De-Coupling
At some point, as ASEAN countries with favorable demographics continue to grow and continue to integrate with aging China (soon to be #1 economy), aging Japan, and aging Korea, and with upcoming integration with growing India (#3 economy), all of these countries along with other RCEP members Australia and New Zealand will de-couple from the USA-US Dollar system.
So too will oil exporters from the Middle East move toward settling oil in something other than dollars, perhaps Rupees or Yuan. Russian oil and natural gas will continue to flow into East Asia, South Asia and soon Southeast Asia.
The end of the USA as a world power might be closer than one believes.
Gab It
