Thursday, August 26, 2021

The Case for Permanent ZIRP

The following chart shows the natural log of retail trade. When using natural logs, constant exponential growth is seen as a straight line.


As the pandemic hit, the exponential growth of retail sales failed to the downside. Using massive and mostly temporary stimulus, retail sales then overshot the historical channel and failed to the upside. Look where it's headed next. Welcome to the world of barely damped harmonic motion.

Can You Drive a Car With Damaged Suspension?

A broken shock absorber will result in your car bouncing around, as well as excessive rolling, squatting and diving. In other words, it won't be comfortable. Plus, your car will be harder to control, especially at high speeds. For that reason, you should never drive a car with a broken shock absorber at high speeds and avoid sudden turns and abrupt stops.

If you aren't even a bit worried about the current state of the Fed's economic shock absorbers, then maybe you should be?

5 comments:

Who Struck John said...

That's crazy talk. We need another $3.5 trillion on the gas!! Hit it!!!!

Stagflationary Mark said...

Who Struck John,

https://youtu.be/DtVBCG6ThDk

Mr Slippery said...

Shock absorbers have certainly gone bad. Even worse, I fear the transmission is going.

A transmission is the component that helps to turn the engine’s power into something the car is able to use on a regular basis. Without a transmission, you would basically sit in your car with the engine running and you go nowhere.

Stagflationary Mark said...

Mr Slippery,

I fear you are right.

https://vimeo.com/77534838

It's all right! We're clear!

Powell, you've blown the transaxle! You're just grinding precious metals!

Come on, taper down. Taper down. Taper down. Taper down.

Mr Slippery said...

Aliens is a microcosm of all life lessons.