Home > Predictions > Central banks to cap lending rates? Ha Ha Ha!

Central banks to cap lending rates? Ha Ha Ha!

The debt-based monetary system is inherently unstable.  It’s like a shark: it has to constantly keep moving or it dies.  Therefore the only solution to a periodic deflation is to loosen lending standards and inflate – uniformly if possible, haphazardly if not – but always to inflate.

That is why the recent ‘warning’ by Mr Bean that the BoE will intervene directly to enforce stricter bank lending standards is so laughable.  To suggest he can restrict LVRs and leverage rates and not cause a deflationary contraction that will cause a firestorm of protest is funnier than a real episode of Mr Bean.

Deflation, then inflation, then deflation, then inflation.  It works.  Until it doesn’t.  And we’ve reached the Keynesian Endpoint where nothing will work.

That doesn’t mean the Mr Beans of the world won’t keep trying.

Good luck with that, Mr Bean.

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