by Charles Hugh Smith
Of Two Minds
Central bank free money doesn’t create collateral or creditworthy borrowers, and without those foundations, the decayed, rotted shack will collapse.
In terms of consequential trends, the pandemic is not a cause, it’s an accelerant of shifts already under way before the emergence of Covid-19. Put another way, the tide had already reversed, but now it’s visible to all.
The twin drivers of neoliberal inequality, globalization and financialization, are now ebbing, much to the dismay of central banks and the elites that neoliberalism’s golden twins enriched at the expense of everyone else.
Globalization ceased expanding some time ago, as diminishing returns set in. The low-hanging fruit had long been picked, and Wall Street’s relentless arbitrage of labor costs, environmental laxity and corrupt governance had long since stripped the globalization tree not just of fruit but of bark and foliage.