If History Is Any Lesson - Naaah!
Submitted by Mark J. Grant, author of Out of the Box,
“Private were you about to shoot that man?”
“No Sir, just a warning shot through the skull.”
I would say that we are in the void; a place where not much matters. The actions of the world’s central bankers have created not only a global financial bubble but a market assumption that everything is backstopped and that nothing can go seriously wrong. Equities rise, bonds compress and everyone plays along. The last time I felt so strongly about this was in the infamous era of “money for nothing, checks for free” just prior to the subprime prick that sent the financial markets into the balloon careening around the room event.
"He had noticed that events were cowards: they didn't occur singly, but instead they would run in packs and leap out at him all at once."
In the first instance the “easy money” was created by the banks, faulty securitizations created by the investment banks and the notion that Real Estate could do nothing but go up in price. In our current circumstances it is being created by the central banks out of thin air, a spell of hocus-pocus and a printing press plugged into an electrical outlet. The only worry now seems to be that eventually we might run out of paper for the currencies. Then we are engaging in daily auctions evaluating whether their piece of paper is more valuable than our piece of paper which used to be based upon some sound and fundamental judgments and now seems, to me, to have all of the rationale of dancing with the Devil because you are bored. Not the wisest of choices.
“You are Mark Grant then? Where do you come from?”
“Revelations, Chapter Six”
In fact Japan, and Europe soon in my estimation, will be wandering around whispering in your ear that their blue piece of paper is not worth nearly so much and that it should decline against the green piece of paper. They will tell you that the American green ink is more expensive, that certain rare and costly trees comprise our paper and that the Japanese characters on the paper cost far less than the English alphabet that is used and, hence, worth less. What’s next I wonder; a massive devaluation by every country on Earth on the same day at the same moment? I put nothing past these people.
“I do not think this will happen but if Berlusconi is elected Pope it may be the first sign of the Apocalypse.”
I watch in fascination how the world evolves some days. All of the deficit numbers originally demanded by the Germans for the countries in Europe have gone the way of the Dodo. Extinct! Oh they are still there and remembered and foisted upon the Press but they now have all of the value of the currency of Yugoslavia or some other country no longer in existence. It is Ben and Mario’s ice cream store; open twenty-four seven, dessert for breakfast, lunch and dinner and the “full faith and credit” promise that you won’t put on an ounce. It is a world full of “non-conforming loans” and you might wish to remember what happened last time.
"He'd been wrong, there was a light at the end of the tunnel, and it was a flamethrower."