Hello and Welcome. This page is a collection of 15 quotes that I liked and saved while reading Permanent Distortion book by Nomi Prins. I hope you will like them too.
By the way, I am Deepak Kundu, an avid book reader, quotes collector and blogger.
Permanent Distortion Quotes
- If you’ve ever wondered why the stock market seems to always go up but your own financial situation doesn’t behave in the same way, you’re not alone – and you’re not crazy. There are forces at work that fuel financial markets at the expense of destabilizing the real economy.
- The profits represented by stocks and bonds have disproportionately accrued to the wealthy and investor class relative to everyone else. That shift has left the world fragmented across multiple economic, political, and societal levels where instability is rampant and wealth relentlessly trickles upward.
- Today’s financial system is as unhinged from the realities of classic capitalism as it is from the economy. Central banks have become money dealers and inequality enablers. When faced with crisis, they zoomed past being lenders of last resort to being arbiters of who wins and loses in the economy. They are now money-creating machines that are fostering riskier and bigger bubbles than ever before. Their policies are setting up future crises and systemic economic fractures.
- Without a dramatic course correction, each new twenty-first-century crisis will build upon the last, creating an ever-greater pile of debt, asset bubbles, and central bank aid. The disconnect between the markets and the real economy will widen. This will spark a massive alteration in the global power paradigm. More people will continue seeking out fintech, decentralization, and other alternatives to escape a broken financial system. This will amplify financial, political, and socioeconomic pandemonium – and give rise to a new definition of money itself.
- The earth may spin on its axis, but the world revolves around money. Populism, nationalism, isolationism, corruption, trade wars, military wars, health crises, inequality, economic hardship, and financial market bubbles – all of them are connected to money. Money doesn’t just drive a wedge between different classes, races, genders, and countries. It is the wedge.
- The world was a veritable Twilight Zone of alternate realities: one for the markets, and one for the real economy. Major central bankers dwelled in the former. The average worker they professed to be helping existed squarely in the latter.
- Markets are psychological creatures. They are a hybrid of human emotions, computer algorithms written by humans, and the money that flows through them. When any of these is shocked by uncertainty, sharp price movements follow.
- Central banks had cracked the code to elicit positive market behavior that could meet their own metrics for what they believed reflected economic progress. Sadly, in doing so, they acted without concern over what it could mean for long-term productive economic outcomes. The Fed knew how to inflate Wall Street, but it was Main Street that was being deflated in the process.
- The pandemic caused a financial crisis due to the very real fear felt by almost everyone, compounded by restrictions on populations and businesses. It provoked a variety of responses in the political, monetary, and public health spheres. Some remedies did soothe people’s immediate financial problems. But the extravagant deployment of central bank money sent long-term trends of inequality and asset bubble growth into the stratosphere.
- During the financial crisis, the world’s major central banks engaged in what was dubbed “emergency” policy. Their strategy entailed subsidizing the losses that the big banks had suffered on the back of their own activities. The effect was to send stock market levels to record highs, including those of the major banks. Every time financial markets got skittish, central banks turned to the money-creating well to assist them. It was socialism for the wealthiest corporations as “state”-spawned entities, such as the Fed, intervened to cover the biggest private sector losses.
- The pandemic aggravated the existing distortion between the wealthy and everyone else. Cheap money found a natural host in the markets, much as the coronavirus did in humans. Just like the virus, money was bent on multiplying itself as quickly and easily as possible, no matter what asset bubbles, inequality, political polarization, or economic or social unrest it caused along the way.
- The concept of a free and fair market in which fundamental values determined the price of stocks had been irreversibly shattered. In the age of epic bailouts and repo loan markets pumped up by the Fed’s money bazooka, rules, regulations, and true price discovery had little to no meaning.
- We are in the starting innings of what Bitcoin and other cryptocurrencies could be. The nuance, capability, and technologies are still unfolding. It remains to be seen to what extent society will accept cryptocurrencies for what they can accomplish – as well as their pitfalls. Central banks are watching closely.
- Central bankers unleashed a monetary policy experiment that began in 2008 and has never ended. The question central bank leaders and economists have yet to fully answer is: When does it end? Can it end? Our financial system, permanently distorted, requires a hard reset if it is to ever truly serve people and the real economy instead of merely the investor class.
- Without a significant monetary policy and debt overhaul, another crisis is inevitable. Markets will tank at first, or periodically. Then banks and corporations will again turn to governments and central banks to save them at the expense of the real economy. The difference is that next time central banks might not be able to exert the same influence on markets. Or, worse, they will. There is no clear alternative beyond a reset of our entire approach to money and power.