We are now witnessing the death throes of the free market. The massive and record-breaking global debt overhang, which is now $250 trillion (330% of GDP), demands a deflationary deleveraging depression to occur; as a wave of defaults eliminates much of that untenable debt overhang. The vestiges of the free market are trying to accomplish this task, which is both healthy and necessary in the long term—no matter how destructive it may seem during the process. Just like a forest fire is sometimes necessary to clear away the dead brush in order to promote viable new growth. However, the “firemen” of today (central banks) are no longer in the business of containing wildfires, but instead proactively flooding the forest with a deluge of water to the point of destroying all life.
In point of fact, the free market is no longer being allowed to function. Communism has destroyed capitalism, as the vital savings and investment dynamic has been obliterated. Central banks have decided that savers deserve no return on their so-called risk-free investments and have hence forced into existence humongous bubbles in junk bonds and equity markets worldwide. They have destroyed the savings and investment dynamic and turned time backward.