Ten Years of Insanity has Come to an End

Here's a piece of news that fits well with my thesis that 2022 marked the end of the progressive era.

A special kind of madness, very much in tune with the end of an era, has come to an end: Negative yielding bonds, which first appeared some ten years ago in order to prop up a dying financial order, are no longer with us.

This isn't a trivial matter, because the modern bond market is a creation of the progressive era. It's also the biggest market on the planet in terms of turnover, and it's been central in financing the excesses we see around us.

Negative yielding bonds means that money was not only free in the eyes of government bureaucrats. Debt was a money making venture. Hence, all sorts of crazy projects could be funded with no regards to profitability. The debt itself produced a surplus, so there was in effect a reward for waste.

This insanity has gone on for ten years, but it's finally at an end, and it won't return any time soon. The reason for this is that the money "earned" by the bureaucrats, was lost by the investors. Pension funds and insurance companies have been drained of capital, and there simply isn't any more money to be found. The party is over. Everyone's broke, and we have to start over.

This is the hard reality that no-one is prepared to talk about, so things are continuing as if nothing much has happened. However, it's only a matter of time before the whole system collapses, and bureaucrats will be forced to cut excesses that have been accumulating over the years.

Anything dependent on subsidies will be hit by the downturn. Paper wealth dependent on cheap credit will evaporate. Every institution introduced during the progressive era will have to prove their usefulness. If they can be shown to have caused damage, they're likely to be dismantled.

With decades of abuses and excesses, pretty much every institution has become infested with loony policies of various kinds. An awful lot of damage has been wrought, and chances are that pretty much every progressive era institution will be demolished over the decades to come.

The social contract