Sunday, October 27, 2013

If John Mauldin is correct

Then we had better take all our money out of the bank and turn it into food, precious metals or anything else that will hold value and/or be useful in the future, because the central bankers are conducting a monetary experiment the likes of which has never been seen before.

(Yes, you have to subscribe to see it all--just do it, even though I'm going to give you the brief version.  It's worth reading.)

The central bankers are playing a very dangerous game.  Because the world's economy nearly locked up in 2007-8, we got Quantitative Easing.  Because it was only partially successful, we keep getting more or it--it's either that, or we lapse back into that locked up economy and we get a Greater Depression, which no one wants.  The downside is that QE is killing the prudent savers with returns, when accounting for inflation, in the negative numbers.  But the central bankers have decided that's OK since it's a better outcome than nations defaulting.

As you might expect, I"m going to call a healthy BULLSHIT!! on that.  I don't give a fried rodent's posterior if all the governments default; they ought to.  Yes, there will be a lot of chaos.  But the system, as it is now, is too complex and too corrupt to survive.  Those same folks who have decided that it's OK for Grandma and Grandpa to watch their investments slowly leak away are the same folks who have benefited from the system as it is.  Worse yet, I suspect that, in the end, it will all be for nothing.  Their complex system is too complex for them to control--something will happen and it will get away from them, with even more disastrous consequences than if they had simply allowed the inevitable to happen in 2008.

In computer terms, the system is BAD--Broken As Designed.  Time to build a new one.

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