Central bankers want you to think they have all the answers. They talk about their policy “tool kits” as if they can just reach in and find the proper solution for any possible economic scenario.

But if you peer behind the curtain, it becomes apparent they may not really know what they’re doing after all. In fact, with a recession looming on the horizon, there are some signs of desperation among economic central planners.

The conventional Keynesian wisdom that dominates today holds that central banks need to lower interest rates when the economy slumps in order to stimulate borrowing and spending. But rates in the US hover just barely above zero. In the Eurozone and Japan, they languish in negative territory. So, what is a central banker to do when the next recession hits?

As Jim Grant put it in an interview on CNBC’s Closing bell last week, we may be in for some really crazy monetary policy.

Peter Schiff has been saying since the December rate hike that the Federal Reserve will have to reverse course, drop rates back to zero, and possibly even take them into negative territory. But the European Central Bank has held rates below zero from months with little notable effect. What happens if negative rates don’t work? What other gadgets to the central bankers have in their tool kits?

There is always the possibility of another round of quantitative easing, something Peter says is on the horizon. But some pundits have suggested an even more radical policy – permanent quantitative easing. In essence, just turn on the printing press, and never turn it off.

Financial Times chief economics commentator Martin Wolf floated this idea in a recent column. Wolf is clearly a true believer in Keynesian conventional wisdom, so the fact that he’s talking about permanent QE is telling. He’s certainly not alone in pondering this option.

First, Wolf runs through some other options the Fed and other central banks can consider. None of them seem particularly good for the average person.

The powers that be could just step back and do nothing. This would likely lead to economic chaos, but may well cleanse the system and provide a fresh start. Of course, it would be a painful process. Wolf calls this option “crazy.”

The second possibility is to keep pushing rates lower – deeper into negative territory. But as wolf explains, negative interest rates will likely have a limited effect without the elimination of cash.

A third possibility involves more aggressive QE. Wolf argues this is feasible given the current balance sheets of most central banks:

At the end of the third quarter of last year, the BoJ’s balance sheet was 70% of GDP, against less than 30% for the Fed, the ECB and the BoE. The latter three could follow the former. Moreover, the assets they buy could be broadened, one possibility being foreign-currency bonds.”

But Japan has already gone this route, and its economy still languishes. So, then what?

Well, that brings us to a permanent state of QE:

A final instrument is ‘helicopter money’ — permanent monetary emission for the purpose of promoting purchases of goods and services either by the government or by households. From a monetary point of view, this is the equivalent of intentionally permanent QE. Of course, actual QE might become permanent after the event: that is now likely in Japan.”

When mainstream analysts start talking about policies like permanent quantitative easing, it’s pretty clear that they are getting close to desperation mode – like a junkie in need of a fix. In fact, Peter often compares the economy to an addict:

We’re totally addicted to this cheap money and we can never take it away. In fact, I don’t even think 0% interest rates are low enough. We need negative rates. We need more QE, because that’s how addicted we are.”

Peter is right. An addict needs more and more drug to bring about the desired effect. You can’t just take the drug away and make the junkie quit cold turkey. Withdraw is too miserable to endure. So the addict keeps pumping more of the drug into his veins until he overdoses.

The Fed and central banks around the world have about hit the limit. They simply can’t get enough drug into the system. Overdose is imminent. It seems more likely an even bigger collapse than 2008 is right around the corner.