Wednesday, January 28, 2009
Davos financial guru tries out new stimulus plan
I don't know what our socialist masters will plan at the World Economic Forum at Davos, this week. But whatever any bright spark central planning socialist states on the podium, to save world capitalism - having flown there first class on taxes to a five-star hotel - will either be an absolute waste of time or make the depression worse.
The only way the market works is when you let the market work.
The market wants higher interest rates and hard commodity money. It wants to embrace the recession to clear out the malinvestments so we can start again. It wants all of the bright spark central planning socialists to get out of the way, to let the market clear their ongoing loose credit mistakes which have fooled clusters of entrepreneurs into betting their fortunes on the wrong production structures.
We don't need Davos. We need absolutely nothing at all. Davos will just make things worse.
Though please do expect lots of smiles at the post-conference photo shoot, to persuade the proles that something useful has happened. The truth is that all of the central bankers inside will be terrified about what is going to happen next to the world economy, particularly the Eurozone, the United States, and the United Kingdom, and any other high-tax region living on borrowed money. Although most of the lower ranks are Keynesians, the more intelligent of them will have read Mises and Rothbard. They know what's coming, just as the Soviets did, who used to keep Mises and Rothbard in special locked cupboards in libraries, strictly for the perusal of the nomenklatura.
The wider the smiles, the worse this fear will have been.
I'm expecting a lot of really wide smiles.