''Europe’s failure to employ monetary and fiscal policy aggressively after the financial crisis is a big reason that Eurozone output is today about 0.8% below its pre-crisis peak. In contrast, the output of the U.S. economy is 8.9% above the earlier peak—an enormous difference in performance.” – Ben Bernanke, former Federal Reserve Board Chair, “How the Fed Saved the Economy: The Central Bank Did Its Job, What About Everyone Else?” Wall Street Journal, October 4, 2015.
“Without the emergency measures of 2008-2009, the U.S. economy would be far worse off today…. Wall Street bailouts will never be popular. But one lesson from the financial crisis is that, however distasteful, stabilizing the financial system is a critical first step toward stabilizing the economy… Yes, QE has possible negative side effects, but for the most part they have yet to materialize.” Alan Binder, former Federal Reserve vice chairman, and Mark Zandi, “Don’t Look Back in Anger at Bailouts and Stimulus,” Wall Street Journal, October 16, 2015.
“An AP story recently told of a widow who invested her life savings, over $200,000, on oil futures on the advice of a smooth-talking investment counselor. Most of it is now gone… she went with the shyster’s advice because safer investments like government bonds pay almost nothing, thanks to artificially low interest rates. This is the indefensible back-story about the Fed’s choice: it forces risk on investors who cannot afford risk.” – Doug MacEachern, “The Investment Shyster Shouldn’t Get All the Blame,” The Arizona Republic, October 29, 2015.
It was the most incredible planetary pattern of our lifetime. It lasted 7 years – the “Seven Years of Tribulation,” as often referred to in recent Forecast books.
The period of 2008-2015 was also labeled the “Cardinal Climax” in these books because it represented a time when all the major planets transited through cardinal signs (Aries, Cancer, Libra, and Capricorn), and all formed “hard” aspects to one another (conjunction, square, or opposition). This cosmic pattern happens only rarely, the last time being 1928-1934, covering the worst part of the Great Depression.
The current Cardinal Climax started in January 2008 when Pluto ingressed (moved) into the sign of Capricorn, the first time since January 1762, a mere 246 years earlier. That same week (January 24-26), Venus also moved into Capricorn, which is not unusual because that happens almost every year for approximately 4 weeks when it is not retrograde or stationary. However, for Pluto and Venus to both move into Capricorn within two days of one other was extremely rare. Both planets have an association with money – Venus rules net worth and assets, whereas Pluto rules debt. You would expect something serious would happen in the world of finances around that time. And it did.
Start of the Cardinal Climax, Jan 24-26, 2008. This chart is for Jan 25, 2008, 10 PM, Washington, D.C. Note that Venus and Pluto had just moved into Capricorn.
It was the start of the Great Recession. It was the start of the meltdown of the financial and banking systems of the world. Many nations went into a serious debt spiral, with some entering into bankruptcy, which required major “bailouts.” Bankruptcies also escalated for individuals, as home values plummeted in many nations, including the USA. Many homeowners faced foreclosure, or had to sell their homes at a loss. Many others endured the pain of their home value falling into “negative equity” (they owed more than they could now sell for), which disqualified them from receiving additional loans from their banks to cover their rising debts. Many banks withdrew their home equity line of credit to homeowners. Credit was tight. Getting a loan was practically impossible for the vast majority of people, even though interest rates started to plunge.
It was a frightening period for both individuals and world leaders, which in turn led to the experimentation of such unorthodox banking policies known as QE and ZIRP (Quantitative Easing and Zero Interest Rate Policies) in an effort to avoid a total breakdown of the financial system. Several world government leaders also made an effort to thwart the financial meltdown by adopting Keynesian fiscal policies, which postulated that by spending more taxpayer monies, funded by taking on huge amounts of new debts, they could “stimulate” an economic rebound. It worked, somewhat.
The bleeding eventually stopped in late 2011, but the so-called “economic recovery” these experimental policies were designed to achieve has not succeeded by any historical measure. The economic recovery in the western world has been the weakest on record following a recession, even weaker than the recovery that followed the Great Depression, which was during the time of the last Cardinal Climax.
The peak of the Capricorn Climax, summer 2010 (shown here as July 30, 2010). Note that Jupiter and Uranus were conjunct in Aries, in opposition to the Mars/Saturn conjunction in Libra, and all four in a T-square with Pluto in Capricorn. This coincided with the surprise announcement of a new QE2 initiative by the Federal Reserve Board, a major contributor to the undoing of the savings (middle) class and the income inequality that grows ever wider in the USA, and has not produced a normal economic recovery following a recession, as policy makers expected.
These policies did save the banks. However, they also led to a number of unintended consequences to society. One of the most disturbing and heavily politicized (and misunderstood) complaints in the USA (and elsewhere) today is the reality of income inequality. What is particularly bizarre is that the policy makers who complain the loudest about income inequality are the very leaders who claim credit for the record stock market gains. They do not acknowledge (or perhaps don’t even understand) that their push for these unorthodox fiscal and monetary measures is directly related to both the stock market climb and the current unacceptable level of the income inequality situation that they rail against.
It is true that stock markets have been on a tear since March 2009, the height of the Great Recession. Stocks in the USA have nearly tripled since then. The same is true in many other countries. Stock markets go up when governments go on spending sprees. The more that people and/or governments spend, the higher the price of goods and/or assets, like stocks. When you combine this with an overly accommodative central bank policy that conducts ZIRP – Zero Interest Rate Policy – you get a situation where money is cheap. This encourages borrowing (increase of debt) for those who can get a loan – like other banks. That money is spent (or in this case, invested) on financial markets such as stocks and bonds (Treasuries). It is not put into real investments that would lead to economic growth. This creates inflation – in this case, asset inflation – but not higher wages that would lead to more consumer spending and eventually a real growth spurt in the overall economy that would normally lead to higher paying jobs and wages.
The stock market goes up. Taxes and banking fees go up, but wages in the private sector jobs do not increase. Furthermore, savers do not receive additional income that historically would be used towards consumer spending and to create a more sustained economic growth. This too has contributed to an anemic post-recession recovery, even with record high stock markets. The stock market is not the economy.
So, who has benefitted from asset inflation and the record high stock and bond markets? You guessed it – those who have substantial stock and bond holdings, those at the top of the income and net worth ladders. Everybody else has fallen further and further behind. And that, dear reader, is the major reason for the current income inequality situation in most industrialized nations of the world that have undertaken QE and ZIRP programs since 2008. The banks have been saved. The economy has stabilized, albeit much weaker than normal following a recession. But the common man? Not so much.
The gap between the “haves” and the “have nots” is widening as a result of the financial, economic , and even political experiments put into practice during the Cardinal Climax of 2008-2015. Yes, we survived the Cardinal Climax, some far better than others. The dance between Saturn, Uranus, and Pluto making hard aspects to one another in cardinal signs technically ended in March 2015 (although Saturn and Pluto have one more rendezvous with one another in Capricorn in 2020, and Pluto will finally exit Capricorn in 2024). However, Uranus and Pluto remain less than 2º apart in a waxing square to one another through March 2016 as the last major aspect within the main body of the Cardinal Climax. This is still close enough to have a collective psychological correspondence (insecurity regarding major social and economic developments and events, and the dissatisfaction of governments and government leaders due to the lack of transparency, violation of basic human rights, and/or power grabs).
Now come the unintended and unplanned social consequences of the experimentations initiated during the Cardinal Climax Era. This includes a widening of income inequality as we head into the next major geocosmic phenomenon: Saturn square Neptune. Yet, underlying that single issue of income inequality is an even greater socio-political issue pertaining to Saturn in a hard aspect to Neptune: that of trust.