Economists are fretting about the current notion that the US is caught in a secular stagnation. They are concerned because they believe that this is what is driving stock prices lower. And lower stock market prices are upsetting to their masters.
They are concerned that people are believing in stagnation as a sort of urban myth, and that makes it real. Seriously. Belief is not an effect, but a primary cause in their minds.
The biggest myth that I know of is that confidence alone, no matter whether it is founded in fundamental reality, is enough to ensure a permanent plateau of financial asset growth.
It is the corollary to the fiat culture that holds that if they say it, and we believe it, then that is enough. They maintain their power to decide, and this is their real end. Not accomplishments, not solutions for others, but the maintaining of their status quo.
And so the Fed and the ruling elite will say whatever is needed to be said, whether it makes any sense or not, and paint pictures with their words and statistics, to make the people believe. If they believe, they will buy, using increasing levels of debt if needed.
Animal spiritism is the cargo cult approach to a financial recovery. If only we believe, then everything will be all right, and we can live in the Potemkin villages that we build with a debt that can never be repaid.
Or as Fernando said, 'It doesn't matter if you feel good, you only need to look good, and baby, we look marvelous.'
Confidence is not a crutch, not a substitute for fundamental growth. It is a spark, and it cannot burn the wet wood of a stagnant or declining real median wage. Just because some fools can believe something does not make it true, even in the Humpty Dumpty world of our pampered princes.
