Force majeure.

In case you wonder why forecasts work so little lately, it can be explained by the simple Latin phrase: force majeure, which translates into English as "superior force." Central banks and their proxies are simply overwhelming normal market forces. There are consequences though, just as there were consequences of the central planning in the Communist-run countries. European Social Democracies that practice soft Socialism are bankrupt (yes, even Germany), but their central banks keep them going by covering their deficits by bonds (or bunds in Germany). The same forces keep gold prices capped. How long before this distortion of the Market blows up? Hard to say. It won't go on ad infinitum and will certainly not improve the economy.

In the meantime, "our" colleges and universities are miseducating young people to the extent that they accept concepts which are, well, insane. I remember the University of California student who insisted that the shortfalls of Socialism could be made up from the government "generating money." Come to think of it, this insanity is now part of the economic planning of Western countries. The same student was taught that deficits do not matter, because "we owe the money to ourselves."

There is a new Left wing insanity in town and it is called the "equivalence theory" of David Ricardo. According to the hallucinations of some so-called Economists, there is no difference between levying taxes to cover government spending or borrowing an equal sum.

We should not be surprised that once an insane theory is accepted, other insanities flow from it. For example, Ricardians expect that high deficits somehow encourage business and citizens to increase their savings IN ANTICIPATION OF higher taxes. As a consequence (they claim) the stimulatory effect of deficits are negated by higher savings rates. This insane theory is meant to excuse the failure of the $800B stimulus. However, the stimulus failed not because people increased their savings rate, but because the stimulus was meant to protect various government workers while the Democrats switched us to soft Socialism. And Socialism does not work.