Why the 2020s Won't Be like the Roaring 20s
Channel: The Nomad Economist
Date: 05/01/2021

Why the 2020s Won't Be like the Roaring 20s
The people who handle the strings/reins of our societies have thus centrally planned  for it to happen ;as the labels Great Reset or New Normal indicate.
They have voluntarily punctured or exploded (with the excuse of fighting a war against the virus) the asset bubble resulting from the previously induced 2007-2020 fiat money inflation; in order to re-inflate it again.

Like a fake magician/conjurer who always repeats the same trick. Absolutely.
 the more or less induced economic collapse has served as perfect alibi for the massive asset purchases and the opening of liquidity spigots, and more importantly, has moved away upward pressure in short term rates and repo markets (central banks worst nightmare). 

They are running out of tricks.
Just like the Roaring Twenties, the 2020s will have a Fed expanding the money supply for political purposes. Ask not if the 2020s will be like the Roaring Twenties; ask if the 2030s will be like the 1930s.
The 1920s were characterized by start of Prohibition where the era's social justice warriors sought to purge the world of alcohol. The only beneficiaries of that movement were organized crime and bigger, intrusive law enforcement. Let's hope the 2020s don't repeat that movement.

The Reincarnation of the Roaring Twenties—one century on from the 1920s—is the lead speculative narrative this new year on Wall Street, it seems.

The storytellers, well aware of how interest income–famine investors seek “justification” to load up on ever-higher-priced equities and risky credit paper, turn to the history lab with its notoriously small sample sizes. They have spotted that 2021 marks the hundredth birthday of a postwar decade famed for rapid prosperity growth in the US. Bingo: translate postwar into postpandemic.

The narrative deserves to encounter rational skepticism on at least four counts.

First, the government debt explosion during the pandemic is a blight on any emerging prosperity, Paul Krugman and Olivier Blanchard notwithstanding.

Second, there is no counteroffensive in sight against the monetary inflation unleashed during the pandemic. That stands in contrast to the Fed’s sharp monetary contraction of 1919–20 to reverse wartime inflation ahead of the Roaring Twenties, or indeed to the Fed’s later abandonment of government bond price fixing in 1951 which preceded the long Eisenhower boom.

Third, a Wirtschaftswunder (economic miracle) in Germany is nowhere to be seen—nor anything similar in today’s number two and three economies (Japan and China). Yet it was the fantastic recovery and economic expansion in the Weimar Republic, then becoming again the number two economy, which played such a key role in extending and deepening the roaring twenties. Importantly, this occurred in the context of extreme optimism, albeit short lived, about world peace.

For the full transcript go to https://financearmageddon.blogspot.com
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