Mass delusions are not rare. They salt the human story. The hallucinatory types are well known; so also is the sudden variation called mania, generally localized, like the tulip mania in Holland many years ago or the common-stock mania of a recent time in Wall Street. But a delusion affecting the mentality of the entire world at one time was hitherto unknown. All our experience with it is original.

- Garet Garrett, 1932

Gepost in 29 08 10 door Steven op zondag 29 augustus 2010

How sugar-rush economics has left the West with a headache

The Western world’s central bankers are in a hole. Jackson Hole. The picturesque Wyoming resort has, over the years, become home to an annual wonkfest of elite policymakers and economists.

The Obama/Bernanke stimulus looks increasingly like a “sugar rush” – it felt good at the time, but provided no long-term economic nourishment. Now that rush is fading, the US is left with an almighty economic headache, but no sustainable recovery.