Archive for May, 2012

Smash Krugman into tiny pieces

Murphy does it here.

Categories: Miscellaneous Musings

Europe is on fire

Predicted on this blog two years ago.  So ho hum it’s not funny.

Predictions?  Banks that caused the crisis will be bailed out when Greece gets kicked out of the Euro.  Middle class and poor wiped out.  Silence as to the true causes.

In other words business as usual.

Update: Ron Paul has not dropped out or suspended the campaign

Clarification: Ron Paul is focusing on the delegate strategy.  Ron Paul will stop dumping money on primary States and focus on delegates.

But, where is Ron Paul?  Why doesn’t he come out and say something?  He’s a camera-phone away from clarifying this.  Where the heck is he?

Ron Paul is out

Ron Paul has dropped out of the Presidential race.

I must say I’m confused.  He was winning delegates.  He had momentum.  This is his last chance.  Why not blow all the money?

This seems to me like a slightly cynical end given everything that his supporters have sacrificed.  Why not run down all the money before letting go?  Has all the money been blown?  I doubt it.

Sad.  Very, very, very sad.  This is as far as Libertarian can go in the current climate.  And it’s not very far.

If you’re sane and have a family, get a government job, because banking and governments will win every time.  That much is clear.  Romney is a bank-backed candidate and he’s happy and rich.  I suppose that’s all you need to know.

Categories: Miscellaneous Musings

If only I went to this guy’s lectures

Yes, he’s the quintessential academic.  Yes, he’s weak.  Yes, he doesn’t advocate revolution and the killing of every rat-banker on Wall Street.  But he’s incredibly learned, considered, and a terrific resource on banking history.  He’s also got the perfect pitch as a teacher – theatrical without being over the top, detailed without being boring, systematic without being dull, personable without being cloying.

Look and learn:

What’s gonna happen?

This is the best visualisation of what’s gonna happen.  This is what it’s gonna be like living through financial Armageddon:

TGR: Following that path, what happens if there are no buyers? Do the governments go into default?

DS: The U.S. Treasury needs to be in the market for $20B in new issuances every week. When the day comes when there are all offers and no bids, the music will stop. Instead of being able to easily pawn off more borrowing on the markets—say 90 basis points for a 5-year note as at present—they may have to pay hundreds of basis points more. All of a sudden the politicians will run around with their hair on fire, asking, what happened to all the free money?

TGR: What do the politicians have to do next?

DS: They are going to have to eat 30 years worth of lies and by the time they are done eating, there will be a lot of mayhem.

TGR: Will the mayhem stretch into the private sector?

DS: It will be everywhere. Once the bond market starts unraveling, all the other risk assets will start selling off like mad, too.

TGR: Does every sector collapse?

DS: If the bond market goes into a dislocation, it will spread like a contagion to all of the other asset markets. There will be a massive selloff.

I think everything in the world is overvalued—stocks, bonds, commodities, currencies. Too much money printing and debt expansion drove the prices of all asset classes to artificial, non-economic levels. The danger to the world is not classic inflation or deflation of goods and services; it’s a drastic downward re-pricing of inflated financial assets.

TGR: Is there any way to unravel this without this massive dislocation?

DS: I do not think so. When you are so far out on the end of a limb, how do you walk it back?

…My investing model is ABCD: Anything Bernanke Cannot Destroy: flashlight batteries, canned beans, bottled water, gold, a cabin in the mountains.

Categories: Predictions

There is no solution

For years I’ve been screaming this.  The economic charlatans who run the place are crazy and the economy is inevitably headed over a cliff of malinvestment and mass unemployment.  There will only be defense jobs and government jobs and disaster for everyone else other than counterfeiting bankers.  In other words, the world will look like Washington DC, or Canberra.

Now the NYTimes comes up with this observation:

A consensus is emerging that government austerity programs have gone too far.  But more borrowing may simply destroy what little investor trust remains.

In other words:  We can’t continue with austerity, but we can’t keep borrowing either.  So, there is no solution.

Just like what I’ve been saying all these years.

Run as far as you can from Europe.  Where?  South America.  Cambodia.  Loas.  Burma.  Just run. It’s gonna blow!