Crisis Actors and a Reichstag Fire
July 26, 2016·0 comments·monetary policy
The language has changed, but the tactic hasn't. Central banks speak of "forward guidance" and "communication policy" while doing what normal people would call lying. Politicians and media construct crisis narratives to maintain control. Yet when these same methods are deployed by populist challengers, the establishment treats it as unprecedented dishonesty. What happens when the most powerful institutions lose their monopoly on narrative control?
• Public institutions have spent seven years wielding deliberate deception as policy. Central banks call it "communication policy" and "forward guidance." The function is persuasion, not information.
• The establishment now complains that populists are 'lying.' But if institutional speech functions to persuade rather than inform, then condemning one side's deception while practicing your own becomes incoherent.
• The rise of Trump, Farage, and Le Pen isn't a separate political phenomenon. It's a direct consequence of the communication tactics that central banks and politicians have deployed for the past seven years.
• Investors respond to narratives not from gullibility but biology. Humans are hard-wired as social creatures to be moved by authority signals. Knowing this doesn't make you immune to it.
• The real question isn't whether institutions will stop constructing false narratives. It's what happens to markets and systems when no one believes any of them anymore, and the narratives stop working.
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