September 1932. "Iraq oil fields. Man with fires in desert." American Colony Photo Department, Matson Photo Collection.
Western developed economies have been resorting to almost every possible trick they can conjure up to maintain financial stability and economic growth over the last few years. And while stimulus, interest rate cuts, monetary easing, currency swaps, liquidity operations, bailout/austerity programs, bank "re-capitalizations", loan guarantees, entitlement/welfare programs, data manipulation, etc. have kept them muddling through so far, the undeniable truth is that there will SOON come a time when none of those things makes the least bit of difference anymore.
For instance, Morgan Stanley just produced a report which concluded that the euphoric market effects of quantitative easing, the most potent monetary weapon possessed by CBs, may only last a few HOURS or DAYS, rather than weeks or months. This concept should be so familiar to readers of TAE by now that I [More...]