It’s a Deal – We Will Make Growth Together …

News from the recent G20 pow-wow range from the slightly scary – such as a deal to further undermine financial privacy under the guise of “battling global tax evasion” – to the outright hilarious. The by far funniest report on the meeting appeared in the Australian press and reads as though it came straight from some stand-up comedy routine. You have to see this to believe it (put down the coffee, just to be safe…):

 

“A global deal on growth appears on track to create millions of jobs after the world’s most powerful finance ministers announced plans to add at least 1.8 per cent to their combined economic output.

The G20 finance summit has ended in Cairns with a renewed commitment to a growth target that is meant to add $2 trillion to the world economy, in a positive sign for Australia’s leadership of the group this year. Joe Hockey hailed the outcome as another step towards a major agreement on reform alongside progress on bank regulation, infrastructure investment and a crackdown on tax evasion.

“We are 90 per cent of the way there to meet out 2 per cent goal but I want to emphasize there is much to do,” he told a press conference in Cairns shortly after midday. “It is critical that we take concrete steps to boost growth and create jobs.”

While observers warn the global forum is not acting fast enough to deliver on its rhetoric, the meeting of finance ministers and central bank governors issued a formal communique that commits to actions to lift growth. Central to the agenda is a growth ambition agreed in February to add 2 per cent over the next five years to collective growth when compared to a “business as usual” scenario without new action.

G20 members have submitted about 900 plans to reach the target, ranging from workplace participation programs to infrastructure investments and competition reforms, but the Cairns summit concluded these were not enough to meet the target. The communique said the preliminary analysis of the plans showed collective growth could be 1.8 per cent higher.

“These measures, along with macroeconomic policies, are designed to lift global growth and contribute to rebalancing global demand,” the statement said.

 

(emphasis added)

900 plans were submitted! 900! What could possibly go wrong? When “finance ministers agree” that there shall be 1.8% growth, then by golly, that’s what we’ll get! And if 900 plans aren’t enough, surely even more plans can be made!

We’re actually somewhat less certain whether that output growth thingy on the say-so of these venerable planners will actually work out, but considering the platitudes voiced by Joe Hockey (“a lot needs to be done…it is critical that we take concrete steps … ”) we can be absolutely sure a lot of hot air will continue to be produced at these meetings. So in a sense, production will be up.

 

lagarde and hockey

The solarium-toasted auntie running the IMF and Australian finance minister Joe Hockey at the G20 pow-wow, busy hatching their plot to produce 1.8% global growth

(Photo via Reuters)

So politicians will not only “create millions of jobs” on account of the deal they have just made, but will produce 1.8% in growth…not 1.6%, not 1.7%, and definitely not 1.9% – 1.8% it shall be. This faintly reminds us of the user instruction that come with the holy hand grenade of Antioch …

 

The holy hand grenade of Antioch, and what to do after the pin has been pulled …

 

Conclusion:

We are a bit mystified at this point as to why these 900 excellent plans have not been set into motion, say, three or four years ago. In the euro area there is e.g. widespread yammering these days about growth having pulled a disappearing act from the “core” countries. China is slowing too and has everyone on edge. And it would have been so easy to avoid all this aggravation! All it would have taken would have been “the meeting of finance ministers and central bank governors issuing a formal communique that commits to actions to lift growth” – et voila! We’d all have been saved much earlier already!

 

Oh well, better late than never.

 

Gosplan-1Today this building houses the State Duma – but in Soviet times, it actually housed GOSPLAN, the USSR’s official 5 year plan hatchery.

(Photo via intomoscow.ru)

 


 

Emigrate While You Can... Learn More

 
 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke

   
 

2 Responses to “We Can All Relax Now – G20 Politicians Will Produce “Growth””

  • Kreditanstalt:

    A PAEAN TO THE EFFICACY OF CENTRAL PLANNING!!!!!

    (Where do we, the poor, wretched and irrational individual economic actors, fit into the plan??)

  • mc:

    No matter what your preference for economic analysis, there is only one valid response to such a meeting: outrage.

    Keynesian: Why so little, so late, if you have the power to control and create growth? Why *allow* recessions to even occur, in fact, why not 3% or 5% or 10% growth annually? If economic planning is so certain, why does anyone have any unfulfilled wants? How can we project the outcome of these actions 5 or more years into the future, yet all economic turning points the central planners fail to see or prevent?

    Austrian: Not possible to create growth via bureaucracy, so the whole thing is a total waste of time and money, since promises made have no bearing on reality. Interventions taken to fix the problem will assuredly manifest as mistakes in later times, such that any effort by these people is definitively counter-productive. Might as well walk to the beach, demand the tides to cease oscillation, and then raise taxes – it will achieve the same direction of effect (fund a nice stroll at taxpayer expense, achieve nothing, and harm the economy, respectively).

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • Gold – An Overview of Macroeconomic Price Drivers
      Fundamental Analysis of Gold As we often point out in these pages, even though gold is currently not the generally used medium of exchange, its monetary characteristics continue to be the main basis for its valuation. Thus, analysis of the gold market requires a different approach from that employed in the analysis of industrial commodities (or more generally, goods that are primarily bought and sold for their use value). Gold's extremely high stock-to-flow ratio and the main source of...
  • Doomsday Device
      Disappearing Credit All across the banking world – from commercial loans to leases and real estate – credit is collapsing. Ambrose Evans-Pritchard writing for British newspaper The Telegraph:   Credit strategists are increasingly disturbed by a sudden and rare contraction of U.S. bank lending, fearing a synchronized slowdown in the U.S. and China this year that could catch euphoric markets badly off guard. Data from the U.S. Federal Reserve shows that the $2 trillion market...
  • India – Is Kashmir Gone?
      Everything Gets Worse  (Part XII) -  Pakistan vs. India After 70 years of so-called independence, one has to be a professional victim not to look within oneself for the reasons for starvation, unnatural deaths, utter backwardness, drudgery, disease, and misery in India. Intellectual capital accumulated in the West over the last 2,500 years — available for free in real-time via the internet — can be downloaded by a passionate learner. In the age of modern technology, another mostly...
  • Pulling Levers to Steer the Machine
      Ticks on a Dog A brief comment on Fed chief Janet Yellen’s revealing speech at the University of Michigan. Bloomberg:   “Before, we had to press down on the gas pedal trying to give the economy all of the oomph that we possibly could,” Yellen said Monday in Ann Arbor, Michigan. The Fed is now trying to “give it some gas, but not so much that we’re pushing down hard on the accelerator.” […] “The appropriate stance of policy now is closer to, let me call it...
  • Credit Contraction Episodes
      Approaching a Tipping Point Taking the path of least resistance doesn’t always lead to places worth going.  In fact, it often leads to places that are better to avoid.  Repeatedly skipping work to sleep in and living off credit cards will eventually lead to the poorhouse.   Sometimes the path of least resistance turns out to be problematic   The same holds true for monetary policy.  In particular, cheap credit policies that favor short-term expediency have the...
  • Cracks in Ponzi-Finance Land
      Retail Debt Debacles The retail sector has replaced the oil sector in a sense, and not in a good way. It is the sector that is most likely to see a large surge in bankruptcies this year. Junk bonds issued by retailers are performing dismally, and within the group the bonds of companies that were subject to leveraged buyouts by private equity firms seem to be doing the worst (a function of their outsized debt loads). Here is a chart showing the y-t-d performance of a number of these...
  • Mea Culpa – Precious Metals Supply and Demand
      Input Data Errors Dear Readers, I owe you an apology. I made a mistake. I am writing this letter in the first person, because I made the mistake. Let me explain what happened.   The wrong stuff went into the funnel in the upper left-hand corner...   I wrote software to calculate the gold basis and co-basis (and of course silver too). The app does not just calculate the near contract. It calculates the basis for many contracts out in the distance, so I can see the...
  • French Election – Bad Dream Intrusion
      The “Nightmare Option” The French presidential election was temporarily relegated to the back-pages following the US strike on Syria, but a few days ago, the Economist Magazine returned to the topic, noting that a potential “nightmare option” has suddenly come into view. In recent months certainty had increased that once the election moved into its second round, it would be plain sailing for whichever establishment candidate Ms. Le Pen was going to face. That certainty has been...
  • The Cost of a Trump Presidency
      Opportunity Cost Rears its Head Last Thursday’s wanton attack on a Syrian air field by the US and its bellicose actions toward North Korea have brought the real cost of candidate Trump’s landslide victory last November to the forefront.   It didn't take long for Donald Trump to drop his non-interventionist mask. The decision was likely driven by Machiavellian considerations with respect to domestic conditions, but that doesn't make it any better.   Unlike...
  • Heavily Armed Swamp Critters
      Worst Mistake GUALFIN, ARGENTINA – By our calculation, it took just 76 days for President Trump to get on board with the Clinton-Bush-Obama agenda. Now there can be no doubt where he’s headed. He’s gone Full Empire. Not that it was unexpected. But the speed with which the president abandoned his supporters and went over to the Deep State is breathtaking.     Once there was only a Trump fragrance called Empire... now he has gone full empire himself   Among the noise...
  • Hell To Pay
      Behind the Curve Economic nonsense comes a dime a dozen.  For example, Federal Reserve Chair Janet Yellen “think(s) we have a healthy economy now.”  She even told the University of Michigan’s Ford School of Public Policy so earlier this week.  Does she know what she’s talking about?   Somehow, this cartoon never gets old...   If you go by a partial subset of the ‘official’ government statistics, perhaps, it appears she does.  The unemployment...
  • Trump Is An Insider Now
      Conspiracy of the Few GUALFIN, ARGENTINA – “U.S. stocks fall on Trump talk…” began a headline at Bloomberg. Or it may be Trump action. We had already counted six major campaign promises – including no O’care repeal and no “America First” foreign policy – already buried (some for the better).   A bunch of campaign promises get the MOAB treatment...  A great many  theories have been proposed to explain Trump's recent series of u-turns: 1. he is in thrall to...

Support Acting Man

Austrian Theory and Investment

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com