The more central banks have used their powers, the less powerful they have become. Negative interest rates, and proposals to ban cash and hand out fiat debt are last gasp confessions of complete impotence from a snow shovel brigade in front of an avalanche. The credit contraction underway will wipe out much more than 6.23 of the world’s debt, and it will wipe out the central banks, no matter how much government debt they monetize, savings and wealth they confiscate through negative rates and cash bans, and fiat debt units they paradrop. Most of what the world today reckons as wealth is simply someone’s debt (or worse, a residual after debt has been paid, i.e., equity), and as debt contracts, the world will come to a painful realization about its “wealth”: It’s Gone! At that point, pick your analogy: the avalanche buries the town, the dominoes fall, the skyscraper of cards collapses, the bubble bursts. The last analogy can be extended: no amount of central banks and government huffing and puffing will re-inflate the bubble.

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