It’s Time for an Intervention: The economy is addicted to QE…

The US economy is like an addict whose drug of choice is Quantitive Easing (QE).

Right now, things have gotten so bad, it’s like the economy is passed out on a urine-soaked couch in an abandoned crack house. The most recent round of QE hasn’t done much. Because the economy has built up a tolerance to the “drug.”¬†Imagine the scene: empty cigarette packs litter the floor and old clothes and syringes mark the spot where the “good times” used to be…easy credit sits next to a melted candle in that corner, over-spending is spilled next to an old space heater over there, endless consumption in a pile by the door…the evidence of our “using” is everywhere. It’s all contributed to a burned-out, glassy-eyed, hopelessly lost economy that may never recover.

And like a dysfunctional family of enablers, we watch the painful, downward spiral of our loved one, wringing our hands, helpless but hopeful that the economy can turn itself around. We make excuses of all sorts. Maybe housing will recover. If only there were more jobs. If China would just peg their currency, it would all be okay. But we know the odds are against us. It’s our own fault. We let this happen. We got ourselves into this. And now, we get to watch in slow motion, the painful unraveling of the once-great financial juggernaut that was the United States economy.

And, like an methamphetamine addict who’s too far gone, the economy isn’t about to stop. It’s bingeing and it’s burned out. It wants more QE, it NEEDS the QE, but it’s what makes it sick…it can’t live with it and it’ll die without it.

Or so Ben Bernanke would have us believe. Like a drug dealer on the street who knows his customer base better than they know themselves, Ben gives us exactly what he wants and knows how to sell it. We need Ben – we need him WAY more than he needs us. And every time he comes around it makes the economy feel SO good. At least for a while. But then, eventually…it feels bad again. And it needs another hit. It’s been going on for years now.

And little by little it’s been getting worse and worse. This time, the economy (the market) barely moved. It didn’t even open its eyes, it was so wasted.

Soon we’ll be sitting around in the dingy light of a cheap hotel banquet room reading letters to the economy like the hapless families on “Intervention,” hoping against hope that our beloved economy isn’t doomed. “My Dearest Economy, I remember when you were my hero – a thriving, healthy vibrant contributor to our world…I looked up to you so much. But now the zero-interest rate policies and endless quantitative easing has stolen you away from us…,” Meanwhile, the economy sits there in between Liberty and Uncle Sam on the couch and stares blankly at the wall…

I’m pretty sure there’s no recovery center where we can send the economy for rehab. We’re sort of in a bad space.

I’m not sure what the answers are, but we’ve got to stop feeding the beast. Next time you hear the words Quantitative Easing, think crack cocaine or methamphetamine. It’s a drug and it’s not doing the economy any favors.

A return to the gold standard? It’s been talked about…Houston Gold Merchants is a gold buyer in Houston.