15/1/20: What Trade Deal Phase 1/N Says About the Four Horsemen of Apocalypse

Phase 1 of N of the "Greatest Trade Deal" that is "easiest to achieve' by the 'stablest Genius' is hitting the newsflows today. Which brings us to two posts worth reading on the subject:

Post 1 via Global Macro Monitor: https://global-macro-monitor.com/2020/01/15/phase-1-of-potemkin-trade-deal-signed-sealed-and-yet-to-deliver/ is as always (from that source) excellent. Key takeaways are:

• "We never believed for one moment that China would cave on any of the big issues, such as restructuring its economy and any deal would be just some token political salad dressing for the 2020 election."
• "Moreover, much of the deal depends on whether the Chinese will abide by Soviet-style import quotas," or in more common parlance: limits on imports of goods into the country, which is is 'command and control' economics of central planning.
• "We are thankful, however,  the economic hostilities have momentarily ratcheted down but the game is hardly over," with tariffs and trade restrictions/suppression being the "new paranormal".
• "Seriously, after more than two years of negotiations, they couldn’t even agree on dog and cat food imports?"

Post 2 via Market Watch: https://www.marketwatch.com/story/phase-one-trade-deal-wont-end-the-uncertainty-in-markets-hsbc-strategist-says-2020-01-15. Key takeaways:

• "The [trade] environment remains very much in flux and a source of concern and challenge for investors".

My takeaways from Phase 1/N thingy: we are in a VUCA world. The current U.S. Presidential Administration is an automated plant for production of uncertainty and ambiguity, while the world economy is mired in unresolvable (see WTO's Appellate Body trials & tribulations) complexity. Beyond the White House, political cycle in the U.S. is driving even more uncertainty and more ambiguity into the system. The Four Horse(wo)men of the Apocalypse in charge today are, in order of their power to shift the geopolitical and macroeconomic risk balance, Xi, DNC leadership, Putin and Trump. None of them are, by definition, benign. 

The trade deal so far shows that Xi holds momentum over Trump. Putin's shake up of the Russian Cabinet today shows that he is positioning for some change in internal power balances into 2020, and this is likely to have some serious (unknown to-date) implications geopolitically. Putin's meeting with Angela Merkel earlier this week is a harbinger of a policy pivot to come for the EU and Russia and Lavrov's yesterday's statement about weaponization of the U.S. dollar and the need for de-dollarization of the global economy seems to be in line with the Russo-German New Alignment (both countries are interested in shifting more and more trade and investment outside the net of the U.S. sanctions raised against a number of countries, including Iran and Russia).

DNC leadership will hold the cards to 2020 Presidential Election in the U.S. My belief is that it currently has a 75:25 split on Biden vs Warren, with selection of the former yielding a 50:50 chance of a Trump 2.0 Administration, and selection of the latter yielding a 35:65 chance in favour of Warren. The electoral campaigning climate is so toxic right now, we have this take on the latest Presidential debate: https://twitter.com/TheDailyShow/status/1217431488439967744?s=20. Meanwhile, debate is being stifled already by the security agencies 'warnings' about Russian 'interference' via critical analysis of the candidates.

Mr. Trump has his Twitter Machine to rely upon in wrecking havoc, that, plus the pliant Pentagon Hawks, always ready to bomb something anywhere around the world. While that power is awesome in its destructiveness vis-a-vis smaller nations, it is tertiary to the political, geopolitical and economic powers of the other three Horse(wo)men, unless Mr. Trump gets VUCAed into a new war.

BoJo's UK as well as Japan, Canada, Australia et al, can just sit back and watch how the world will roll with the Four punchers. The only player that has a chance to dance closely with at least some of the geopolitical VUCA leaders is the EU (read: France and Germany, really). 

23/8/19: Counting Trillions: The Unrelenting March of Debt

The never-ending march of leverage:

Between 2001 and 2008, Big 4 Non-Financial Sector Debt rose USD 30.04 trillion or 96.5 percent from trough to peak. Since 1Q 2009 financial crisis trough through 2Q 2019, the same is up USD 37.35 trillion or 62.7 percent.

2/10/18: Government Debt per Employed Person

We often see Government debt expressed in reference to GDP or in per capita terms. However, carry capacity of sovereign debt depends not as much on the number of people in the economy, but on the basis of those paying the lion’s share of taxes, aka, working individuals. So here is the data for advanced economies Government debt expressed in U.S. dollar terms per person in employment:

Some interesting observations.

Ireland, as a younger, higher employment economy ranks fifth in the world in terms of Government debt per person employed (USD 115,765 in debt per employed). In terms of debt per capita, it is ranked in the fourth place at USD 54,126.

Plucky Iceland, the country hit as hard by the Global Financial Crisis as Ireland and often compared to the latter by a range of analysts and policymakers, ranks 22nd in terms of Government debt burden per employed person (USD 56,185) although it ranks 13th in per capita terms (USD 32,502). In simple terms, Iceland has higher employment rate than Ireland, resulting in lower burden per employed person.

When one considers the fact that non-Euro area countries have more sovereign control over their monetary policies, allowing them to carry higher levels of debt than common currency area members, Irish debt per employed person is the third highest in the world after Italy and Belgium, and higher than that of Greece.

Out of top ten debtors (in terms of Government debt per employed person), six are euro area member states (10 out top 15).

Looking solely at the euro area countries, Ireland’s position in terms of debt per capita is woeful: the country has the highest debt per capita of all euro area states at EUR43,659 per person, with Belgium coming in second place with EUR40,139. In per-employee terms, Ireland takes the third highest place in the euro area with EUR93,378 in Government debt, after Italy (EUR98,314) and Belgium (EUR94,340).

27/1/17: Sovereign Debt Junkies Can't Get Negative Enough in 4Q 16

There’s less euphoria in sovereign borrowers camps of recent, but plenty of happiness still.

Per latest data from FitchRatings, “global negative-yielding sovereign debt declined slightly to $9.1 trillion outstanding as of Dec. 29, 2016, from $9.3 trillion as of Nov. 28, 2016… The decline came from the strengthening of the US dollar and little net change in European and Japanese sovereign long-term bond yields.” In other words, currency movements are pinching valuations.

Notably, “there was $5.5 trillion in Japanese government bonds yielding less than 0%, down about $2.4 trillion since the end of June 2016. Slight increases in Japanese yields and a weaker yen contributed to the ongoing decline in the amount of negative-yielding debt outstanding in Japan.” Never mind: world’s third largest economy accounts for 60.5 percent of all negative yielding sovereign debt. That’s just to tell you how swimmingly everything is going in Japan.

4/5/16: Canaries of Growth are Off to Disneyland of Debt

Kids and kiddies, the train has arrived. Next stop: that Disneyland of Financialized Growth Model where debt is free and debt is never too high…

Courtesy of Fitch:

Source: @soberlook

The above in the week when ECB’s balancehseet reached EUR3 trillion marker and the buying is still going on. And in the month when estimates for Japan’s debt/GDP ratio will hit 249.3% of GDP by year end

Source: IMF

And now we have big investors panicking about debt: http://www.businessinsider.com/druckenmiller-thinks-fed-is-setting-world-up-for-disaster-2016-5. So Stanley Druckenmiller, head of Duquesne Capital, thinks that “leverage is far too high, saying that central banks and China have allowed for these excesses to continue and it's setting us up for danger.”

What all of the above really is missing is one simple catalyst to tie it all together. That catalysts is the realisation that not only the Central Banks are to be blamed for ‘allowing the excesses of leverage’ to run amok, but that the entire economic policy space in the advanced economies - from the central banks to fiscal policy to financial regulation - has been one-track pony hell-bent on actively increasing leverage, not just allowing it.

Take Europe. In the EU, predominant source of funding for companies and entrepreneurs is debt - especially banks debt. And predominant source of funding for Government deficits is the banking and investment system. And in the EU everyone pays lip service to the need for less debt-fuelled growth. But, in the end, it is not the words, but the deeds that matter. So take EU’s Capital Markets Union - an idea that is centred on… debt. Here we have it: a policy directive that says ‘capital markets’ in the title and literally predominantly occupies itself with how the system of banks and bond markets can issue more debt and securitise more debt to issue yet more debt.

That Europe and the U.S. are not Japan is a legacy of past policies and institutions and a matter of the proverbial ‘yet’, given the path we are taking today.

So it’s Disneyland of Debt next, folks, where in a classic junkie-style we can get more loans and more assets and more loans backed by assets to buy more assets. Public, private, financial, financialised, instrumented, digitalised, intellectual, physical, dumb, smart, new economy, old economy, new normal, old normal etc etc etc. And in this world, stashing more cash into safes (as Japanese ‘investors’ are doing increasingly) or into banks vaults (as Munich Re and other insurers and pension funds have been doing increasingly) is now the latest form of insurance against the coming debt markets Disneyland-styled ‘investments’.

21/4/16: Economic Outlook: Advanced Economies

My article on economic outlook forward for the Advanced Economies is now out at the Manning Financial quarterly: https://issuu.com/publicationire/docs/mf_magazine_april_2016_web_19042016?e=16572344/35062140.

3/2/2015: Japanification of Europe?

One of the main narratives for understanding European economy's longer term growth outlook has been the risk of Japanification: a long-term stagnation punctuated by recessionary periods and accompanied by low inflation and or deflationary episodes and pressures. I posted on the topic before (see for example here: http://trueeconomics.blogspot.ie/2014/10/19102014-chart-of-week-japanising-europe.html) and generally think we are witnessing some worrying similarities with Japan, driven primarily by longer-term trends: debt overhangs across real economy, nature of debt allocations (concentrated in less productive legacy assets, such as property in some countries, physical capital in others) and, crucially, demographics-impacted political and institutional paralysis.

One recent paper, titled "The Macroeconomic Policy Challenges of Balance Sheet Recession: Lessons from Japan for the European Crisis" by Gunther Schnabl (CESIFO WORKING PAPER NO. 4249 CATEGORY 7:MONETARY POLICY AND INTERNATIONAL FINANCE, MAY 2013) sets out the stage for looking into the direct comparatives between Japan's experience and that of the EU.

Per Schnabl, "Japan has not only moved through a boom-and-bust cycle …almost 20 years earlier than Europe but has also made important experiences with a crisis management in form of monetary expansion, unconventional monetary policy making, fiscal expansion and recapitalization of banks. Although Japan has reached the (close to) zero interest rate environment more than a decade earlier than Europe and gross general government debt (in terms of GDP) has gone far beyond the levels, which are today prevalent in Europe, growth continues to stagger."

In other words, as we know all too well, Japan presents a 'curious' case of an economy where neither monetary, nor fiscal policies appear to work, even when applied on truly epic scale.

What Schnabl finds is very intriguing. "The comparison between the boom-and-bust cycles in Japan and Europe with respect to the origins of exuberant booms, the crisis patterns, the crisis therapies, and the (possible) effects of the crisis therapies shows that despite significant differences important similarities exist. With the growing socialisation of risk Europe follows the Japanese economic policy decision making pattern, with – possibly – a similar outcome for European growth and welfare perspectives. The gradual decline in real income in Japan should be incentive enough for a turnaround in economic policy making in both Europe and Japan."

The key to the above is in the phrase "With the growing socialisation of risk Europe follows the Japanese economic policy decision making pattern" which of course has several implications:

• Mutualisation / Socialisation of risk is actually mutualisation and, thus, socialisation of debt - clearly suggesting that the path toward debt deleveraging is not the one we should be taking. The alternative path to debt deleveraging via mutualisation / socialisation is debt restructuring.
• To date, no European leader or organisation has come up with a viable alternative to the non-viable idea of 'internal devaluation'. In other words, to-date we face with a false dichotomous choice: either mutualise debt or deflate debt. Neither is promising when one looks at the Japanese experience. And neither is promising when it comes to European experience either. See more on this here: http://trueeconomics.blogspot.ie/2014/08/1082014-can-eu-rely-on-large-primary.html and http://trueeconomics.blogspot.it/2014/08/1082014-inflating-away-public-debt-not.html.
• ECB policies activism - the alphabet soup of various programmes launched by Frankfurt - is still treating the symptom (liquidity or credit supply to the real economy) instead of the disease (debt overhang). And the outcome of this activism is likely to be no different from Japan: debt overhang growing, economy stagnating, asset prices and valuations actively concealing the problem, data detaching from reality.

Here are some slides from Schnabl's November 2014 presentation on the topic:

So here's the infamous monetary bubble / illusion:

And the associated public sector balloon (do ignore some of the peaks that were down to banks rescue measures and you still have an upward trend):

And an interesting perspective on the Japanification scenario for Europe:

Happy demanding more Government involvement in the economy, folks... for this time, all the monetary, fiscal, regulatory, institutional, propagandistic etc 'easing' will be, surely, different... very different... radically different...

20/1/2015: IMF Global Growth Outlook 2015-2016: Europe Slips, U.S. Powers Away

My analysis of the IMF update to the World Economic Outlook is now available on Learn Signal blog: http://blog.learnsignal.com/?p=148

19/10/2014: Chart of the Week: Japanising Europe

A chart of the week, courtesy of @Schuldensuehner

10 year benchmark bonds: Japan for 1987-2004 period of decline and stagnation and Germany for 2004-present period of decline and ... oh, well... Japanisation of Europe is still ongoing, but it goes without saying: lower yields are not conducive to economic recovery. Or as @Schuldensuehner  noted:

Everything is going according to script...

Now, check out why Germany's lower borrowing costs mean preciously nothing when it comes to the hopes of Keynesianistas around the world for more German borrowing: http://trueeconomics.blogspot.ie/2014/10/13102014-germany-too-old-to-read-paul.html

28/7/2014: Western Banks Exposures to Russia

Last week I posted two charts detailing largest FDI exposures to Russia. Here is a chart, courtesy of Bloomberg, showing banks exposure to Russia by country:

19/4/2014: If Only Forecasts Were Falling Ripe from Trees...

Here we go, folks… ESRI's latest thoughts on Irish economy... and they are earth-shattering.

Let's take a few pointers from the wise:


1) "Ireland could face a debilitating period of stagnation – characterised by high unemployment, falling prices and low growth – if recovery in Europe falters".

"Could"?! 2013 marked a year of contracting GDP and total demand. We now have six consecutive years of falling total demand (sum of domestic investment and spending by consumers and government). Unemployment is already sky-high, long term unemployment is a hinge problem. Prices are not quite falling, but growing at near-zero rate, and stripping out State controlled sectors, goods and services (something ESRI misses on every occasion, like a clock)we have deflation. So all of this "could" happen?


2) "…Prof Fitzgerald said deleveraging by households could continue for “some considerable time” if recovery stalled in the rest of the EU, resulting in a return to stagnation in Ireland."

Can someone explain to me why would deleveraging of the households (repayment of massive debts accumulated during the Celtic Garfield years) suddenly end if "the rest of the EU" were to post robust growth? Is it possible that growth in Germany will start paying Irish mortgages down? Or consumer demand in France picking up can moderate the size of our credit cards bills? How?

Irish exporting sectors employ a small fraction of our households. Irish exports are geared not toward wages payments, but MNCs profits. Pick up in our exports is unlikely to drive household earnings up (easing debt/income ratios or repayment funds available to households - two conditions necessary for new credit creation) in short or medium term.

3) But wait, according to the ESRI, the core threats to the economy are not debt, but the EU growth and housing markets (more specifically: excess demand in the property markets in Dublin and Cork that are at a risk of not being satisfied in poor credit conditions). So in the nutshell, ESRI thinks that if we start building more houses and Germans start buying more BMWs, our economic growth will take off like a rocket.

Confusing symptoms for causes, ESRI is worried about the Japanese scenario for Ireland. But let's take a look at plausibility of the ESRI logic:

• Japan is a fully sovereign economy with own monetary and fiscal policies (both of which Ireland lacks)
• Large population and domestic demand (which Ireland lacks)
• Indigenous (as opposed to tax-maximising MNCs) exports 
• Set smack in the middle of the most dynamic growth cluster in the world (Asia Pacific) as opposed to the growth-shy Europe (remember, a pick up in growth in the euro area implies annual growth of 2-2.2 percent; a pick up of growth in Asia Pacific means annual growth of 5-7 percent). 

The real problem with Japan's economy is actually pretty similar to that of Ireland's:

• pre-1960s Japan's growth was driven by a period of post-WW2 rebuilding, 
• between 1960s and 1980 it was driven by the rapid catching up with the advanced economies, 
• thereafter until 1990s - by a massive property and credit bubble. 
• So stagnation, property crash and low inflation/deflation were not the causes of the malaise in Japan, but its symptoms. The real malaise for Japan is identical to the one we have in Ireland - lack of catalyst for future growth. 
• In Japan this problem is exacerbated by adverse demographics. In Ireland - by lack of monetary and fiscal policies room. Ireland is 2 decades behind Japan in household and corporate and banking deleveraging. 

So go figure: can growth in the EU and housing supply improvements in Ireland do enough for Dublin?

Ok, take it from a different angle: 1991-2007 marked massive growth around the world. Japan stagnated. 1991-2007 marked massive monetary and fiscal expansion in Japan. Japan stagnated. 1991-2007 marked significant deleveraging of Japanese economy. Japan stagnated. That is 18 years of stagnation and deflation under the global conditions more favourable than Ireland faces today, with full economic policies kit available to Japan, not available to Ireland, and with indigenous exporting engine much mightier than that of Ireland.

Is ESRI having a clue? Of course it does. It can clearly see that once things get really good, things will be really good: "Conversely, Prof FitzGerald believes if the euro zone recovery picks up pace this year and in 2015, and is accompanied by an increase in domestic demand, Ireland could see a more rapid reduction in the numbers unemployed and a return of the public finances to a small surplus over the period 2017-2019."

Ah, now we talking. And if we discover a pot of gold and a chest of diamonds at the end of that proverbial rainbow, just to the North of the fabled riches of oil, gas, uranium, rare earth metals, and Bord Bia certified caviar... then we can afford pensions for the ESRI boffins too. 

15/9/2013: A Surging... Floater...

You've seen the 'Euro area economy is surging ahead' headlines on foot of recent PMIs... and you have seen warnings on the accuracy of the indices (see http://trueeconomics.blogspot.ie/2013/09/1092013-pmi-and-real-economy-goldman.html)... but what about levels?

Ugh... 'surging'?.. or maybe 'barely floating'?

28/4/2013: That German Miracle...

Germany... the miracle economy of Europe:

Let's do some growth facts. recall that G7 includes such powerhouses of negative growth as Japan and Italy, and the flagship of anemia France.

1) Germany vs G7 in real GDP growth:

From data illustrated above:

• In the G7 group, Germany ranked 6th in growth terms over the 1980s, rising to 5th in the 1990s and 2000s, and, based on the IMF forecasts, can be expected to rank 4th in the period 2010-2018. In simple terms - Germany ranked below average in every decade since 1980 through 2009 and exact average in 2010-2018 period.
• On a cumulated basis, starting from 100=1980, by the end of this year, judging by latests IMF forecast for 2013, Germany would end up with second slowest growth in G7, second only to Italy. 
• On a cumulated basis, starting from 100=1990, by the end of this year, judging by latests IMF forecast for 2013, Germany would end up with fourth fastest growth in G7. Ditto for the basis starting from 100=2000.

2) Germany vs G7 in annual growth rates in GDP based on Purchasing-power-parity adjustment (PPP) per capita to account for exchange rates and prices differentials:

From data illustrated above:

• In the G7 group, Germany ranked 5th - or below average - in PPP-adjusted per capita growth terms over the 1980s and the 1990s, rising to 4th - group average - in the 2000s, and, based on the IMF forecasts, can be expected to rank 3rd - slightly above average - in the period 2010-2018. In simple terms - Germany ranked below or at the average in every decade since 1980 through 2009 and one place ahead of the average in 2010-2018 period.
• Note: Germany is the only G7 country with shrinking overall population, that peaked in 2003 and has been declining since, thus helping its GDP (PPP) per capita performance.

Here's the chart summarising Germany's rankings in G7 in terms of two growth criteria discussed:

Germany might have been performing well in 2006 and 2011 (when it ranked 1st in real GDP growth terms) and really well in 2007-2008 and 2010 when it ranked 2nd, but other than that, it has been a lousy example for any sort of a miracle.

19/2/2013: Japan's Woes: 3 recent posts

Some excellent blogposts on Japan's problems via Economonitor:

1) All exports and money printing can't offset Japan's debt, ageing and domestic demand woes: http://www.economonitor.com/edwardhugh/2013/02/12/japans-looming-singularity/?utm_source=contactology&utm_medium=email&utm_campaign=EconoMonitor%20Highlights%3A%20End%20Games

2) Does end of growth (Japan's example) spell end of high quality of life? http://www.economonitor.com/dolanecon/2013/02/15/growth-and-quality-of-life-what-can-we-learn-from-japan/

3) Japan's forgotten (but not fully unwound) debt bubble: http://www.economonitor.com/blog/2013/01/the-setting-sun-japans-forgotten-debt-problems/

All worth a read.

I can add that in 2011 Quality of Life Index by International Living magazine, ranking 191 countries around the world, Japan was in 7th place (rank range is between 7th and 10th), whilst Ireland was in 20th (rank range between 20th and 26th) in terms of overall quality of life, with Japan outperforming Ireland in 4 out of 9 categories of parameters on which the rankings were based and tying Ireland in one category. (link to full rankings)

Note: the above rankings did throw some strange results, so careful reading into them.

13/1/2013: Decoupling: US v Euro Area 2011-2060

Another interesting chart that speaks volumes about the topic I have been highlighting now since ca 2002-2003. The topic is the concept of 'decoupling' from growth momentum. Back prior to the crisis, European media loved the theory of China (or Emerging Economies, etc) displacing the US as the core drivers of global growth and, ultimately, as the centre of global economic power. At the same time, Brussels 'leaders' were keen stressing the theory of the European Century - the 21st century as the period of revival of Europe.

My reply to that was, and still is, that while the US share of global output is shrinking against rising EMs and BRICS share (S for South Africa) and while this trend is likely to continue into the future, it is the EU (more significantly, the euro area) that is dropping out of the global story by outpacing the decline of the US relative predominance. Much of this born out in the IMF projections. And here is a nice and concise OECD graphic for that:

So between 2011 and 2060 (yes, I know - time horizon very vast and thus forecasts very tentative), the US share of global GDP is expected to drop significantly: from 23% to 16% - a decline of under 38.5%. In the same period, euro area share is expected to shrink from 17% to 9% - a decline of just under 47.1%. Of course, Japan's importance to the global economy is likely to fall even more - by over 57.1%.

All in, the 'decoupling' (and I don't really like this term, because it implies removal of the OECD economies activity out of global activity, which is not happening) will take US, EA17 and Japan share of global output from 47% in 2011 to 28% in 2060 according to the OECD projections. 42.1% of this decline will be accounted for by the EA17, 36.8% by the US and 21.1% by Japan.

I don't think the 21st Century is shaping up to be the Age of the Euro...

2/9/2012: Gun, no bullets, a charging bear

Via an excellent recent post on the SoberLook, here's a chart showing a Central Bank with no ammunition left to fire at the charging bear:

The chart plots the rapid rise of monetary base in Japan courtesy of BOJ.

And as to the portrait of the bear (via same post):

The above plots Japan's GDP y/y changes. Here's the point - in 20 years between 1995 and 2014 there will be not a single 5 year period in which Japan did not have a recession. Not a single one.

Now, recall that 'we will do everything necessary to rescue euro and, believe me, it will be enough' statement from Mr Draghi... BOJ needless to say tried the same... it has been working marvels for Japan's economy, albeit the yen is still there.

10/2/2012: Few thoughts on the global policy crisis

What makes me really concerned nowdays is not the ongoing crisis, but the logical and numeric impossibility of the mounting policy "solutions' to the crisis. Here's a quick synopsis. Take a look around the world:

• Bank of England repeated QE rounds in the face of £1 trillion+ debt pile is a strategy for growth via debasement of the currency
• Fed's continued unrelenting QE is much the same
• ECB has been debasing any real connection between banks, real economy and banks profits via uninterrupted injection of cash into banks - giving a license to earn free profits on interest margins while monetizing already excessive Government debts. Real economy, of course, gets hammered by sterilization via reduced real credit flows. The end game - moral hazard of massive proportions in the financial sector across Europe
• EU itself is hell-bent on debasing real incomes and wealth of its citizens by implementing the Fiscal Compact as the sole policy tool for dealing with the crisis
• Obama Administration is debasing, in contrast with EU, the future generations' wealth and income by continuing to spend Federal dollars like a drunken sailor arriving in a casino
• Ireland's Government is actively debasing the entire domestic economy, oblivious to the reality that households and businesses deleveraging is being prevented by banks and Government deleveraging - all for the sake of grand posturing of "We will pay all our debts" variety
• Japan is engaged in an active pursuit of debasing Government balancesheet as the debt bubble spreads to Japanese Government bonds - now in negative yields
• China is debasing its monetary and fiscal policies to deliver a 'soft landing' to the massive train wreck of its vastly bubble-like property and banking sectors

Close your eyes and think - how will the world be able to reverse out of these disastrous desperate policies in years ahead without completely shutting off growth via high interest rates, destabilized savings-investment links and in the presence of ever-rising public, private and corporate debts? What levels of inflation will be required to 'inflate' out of this mess? What degree of real wealth destruction has to be imposed on the ordinary people to sustain these gambles without a structured, orderly and coordinated restructuring of debts? What asset class and geography hedge can protect you from this avalanche of disastrous policy choices by the Western leaders?