"We're Living Within A Money Bubble Of Epic Proportions"

Tyler Durden's picture




 

Submitted by Adam Taggart via Peak Prosperity,

James Turk believes the time we live in now will be studied by future historians for generations to come. Just as we today marvel at the collective madness that resulted in the South Sea and Dutch tulip manias, our age will be known as the era when society lost sight of what money really is.

And as result, the wrong kinds of wealth -- today, that's mostly financial assets -- are valued and pursued. And just like those bubbles from centuries ago, when the current asset boom goes bust, the value of paper wealth will vaporize. 

In contrast, those holding tangible productive assets or real money will fare much better on a relative basis.

James and co-author John Rubino (of DollarCollapse.com) have recently published a new book covering the details of this prediction called The Money Bubble: What To Do Before It Pops. Within it, they delve into the reasons for why the world is destined for what Ludwig von Mises termed a "crack up boom":

Wealth comes in two forms.  It comes in financial assets, bonds, and T-Bills, and things of that nature, and it also comes in tangible assets: real estate, oil wells, timberland, farmland, houses and things that are tangible. And when you’re in a financial bust – and we’ve been in a financial bust since the dot-com bubble collapsed back in 2000 – what you want to do is you want to be involved with tangible assets and you want to avoid, as much as possible, your involvement in any financial assets.  So, consequently, what people should still be focusing on, even though we’re 14 years into this bust, is continuing the accumulation of tangible assets.

 

Because when this bust is over, promises are going to be broken left and right.  And that means financial assets where you have counterparty risk where you own an asset, the value of which is based on someone’s promise – a lot of those financial assets are going to be diminished in value.  Now, there’s a special kind of financial asset called a stock in a company.  It’s almost like a tangible asset in the sense that if you own stock in EXXON, you’re basically owning a tangible asset, because it’s involved in oil and it owns tangible assets all over the world.

 

But then, there are financial stocks, credit-card companies and banks, that are financial wealth rather than tangible wealth.  So, you don’t want to own stocks in those companies.  So, basically, own tangible assets or stocks in companies that are involved with tangible assets – those stocks, I call near-tangible – I think that’s the thing that everybody should be focusing on.

 

And when it comes to money and liquidity, the money, of course, would be physical gold or physical silver or a combination thereof because they will re-emerge in the historical and traditional role as money.

 

Keep in mind, gold’s been money for 5,000 years.  It was made money by the market.  Money comes from the market.  It doesn’t come from the government.  Over the past century, government’s certainly usurped that authority to control money.  And over the last 40 years, they’ve gone even further afield by completely divorcing fiat currency from the gold that used to back money.  And because of the time element that’s involved, we’ve lost sight of what money really is, and that’s what’s created the money bubble, Chris.

 

And it’s this money bubble where people have to come back to reality as to what money really is.  It’s liquid, tangible assets being used in the economy in exchange for real goods and services.  And it’s ultimately where we’re going.  And I think it’s going to be very, very disruptive because if you look at an individual country like Weimer, Germany or Zimbabwe more recently, or what Venezuela or Argentina are going through now.  You can see the disruption to the economy when the money is no good.

 

We’re talking here about fiat currencies throughout the world because nobody’s tied to gold anymore.  No country’s currency is tied to gold anymore.  So this is going to be the bubble, I think, that generations from now, hundreds of years from now people are going to be talking about just like we talk today about the South Sea Bubble or the Mississippi Bubble, from those episodes in history a couple hundred years ago.

Click the play button below to listen to Chris' interview with James Turk (35m:26s):

 

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Sun, 01/26/2014 - 18:33 | 4369240 So Close
So Close's picture

No shit.

Sun, 01/26/2014 - 18:34 | 4369245 CPL
CPL's picture

http://www.forbes.com/sites/gordonchang/2014/01/26/china-halts-bank-cash...

China just closed all bank transfers.  Good luck on Monday everyone.

Sun, 01/26/2014 - 18:41 | 4369258 Skateboarder
Skateboarder's picture

Ho Li Fuk!

Sun, 01/26/2014 - 18:48 | 4369276 onewayticket2
onewayticket2's picture

We are not in Cyprus anymore...

Sun, 01/26/2014 - 18:51 | 4369283 kaiserhoff
kaiserhoff's picture

Op Sheet Kreek.

Sun, 01/26/2014 - 19:08 | 4369340 Dick Buttkiss
Dick Buttkiss's picture

If you want your bank transfer . . .

Sun, 01/26/2014 - 19:09 | 4369344 kaiserhoff
kaiserhoff's picture

you solly out of luck!

Sun, 01/26/2014 - 19:20 | 4369364 reload
reload's picture

In the UK we have to pay our tax bills next week.

Perhaps we will be unable to with a seized banking system....?

Perhaps the chinks think they have enough gold now....and on the 2nd

Announce a floating gold backed currency??

May bee they have pledged all their T bonds to Africa in exchange for resources?

Perhaps they are simply ready..?

Or just fucked.

Good luck to all next week and beyond.

 

 

Sun, 01/26/2014 - 19:42 | 4369405 pFXTim
pFXTim's picture

"chinks", what a lovely expression.

Sun, 01/26/2014 - 21:40 | 4369815 Jimco
Jimco's picture

Dennis Leary gave Political Correctness a well deserved middle finger of common sense.

Rescue Me - Sensitivity Training

https://www.youtube.com/watch?v=egAMgNY84do

PC hack - "the word chink, is what I like to call a problem word"

Sean Garrity - "if I were a chink, I think I would rather be called a chink, instead of gook"

Sun, 01/26/2014 - 21:54 | 4369855 pFXTim
pFXTim's picture

Apparently you're of the belief that calling someone a "chink" falls under the domain of political correctness? I'd consider it belongs more in the realm stupidity, or perhaps at best a lack of class/decency, but perhaps that just me. Let me ask you: how do you feel about someone calling you dumbass?

Sun, 01/26/2014 - 22:04 | 4369879 Jimco
Jimco's picture

gee... I don't know, why don't you tell me how you've handled it in the past

Sun, 01/26/2014 - 22:07 | 4369904 MrPalladium
MrPalladium's picture

Why is it that when Whites think up a one syllable word to refer to other races that new word is always considered an insult?

"Chink" is merely descriptive. It has no negative connotation. It is a one syllable word that is more convenient than "Chinese"

 

Mon, 01/27/2014 - 00:55 | 4370302 Muppetrage
Muppetrage's picture

The worst person to lie to is yourself.

Sun, 01/26/2014 - 22:28 | 4369935 thestarl
thestarl's picture

How about slope head that ok who cares

Mon, 01/27/2014 - 02:53 | 4370469 Terp
Terp's picture

Of course chinks don´t like being called gooks, since that refers to koreans. Chinks don´t like gooks.

Mon, 01/27/2014 - 01:24 | 4370349 jonjon831983
jonjon831983's picture

dunno... but maybe someone will tell round eye go home?

Sun, 01/26/2014 - 19:43 | 4369406 TruthInSunshine
TruthInSunshine's picture

News Headline Summary

PBoC has ordered commercial banks to halt cash transfers

Says:
- There will be a three-day suspension of domestic renminbi transfers. There will also be a suspension, spanning nine calendar days, of conversions of renminbi to foreign currency.

Full article: http://www.forbes.com/sites/gordonchang/2014/01/26/china-halts-bank-cash...

*So many COINCIDENCES lately.

Sun, 01/26/2014 - 19:49 | 4369416 kaiserhoff
kaiserhoff's picture

I brame imperialist yankee yellow dog...

  oh wait.

Sun, 01/26/2014 - 19:57 | 4369434 akak
akak's picture

Same as always, fault lies in US 'american' citizenism blobbing-up the bubble-making means while offuscating the scraping of the Chinese goat, manifestering the eternal consumptionalizing 'american' parangong nature.

Make me laugh.

Sun, 01/26/2014 - 20:09 | 4369473 remain calm
remain calm's picture

We are good, we have Obama and Yellen, nothing to worry about over here in the USA.

Sun, 01/26/2014 - 20:38 | 4369590 mt paul
mt paul's picture

woof...

Sun, 01/26/2014 - 18:55 | 4369297 tallen
tallen's picture

Sum Ting Wong!

 

Sun, 01/26/2014 - 18:42 | 4369260 Seasmoke
Seasmoke's picture

THIS IS SERIOUS NEWS !!!!!!!!!!!! WOW !!

Sun, 01/26/2014 - 18:54 | 4369294 kaiserhoff
kaiserhoff's picture

Katie, bar the door.

Hell's Bells.  This time she did.

Sun, 01/26/2014 - 19:01 | 4369317 Ineverslice
Ineverslice's picture

 

Uncle Billy...He's your man!!!

Sun, 01/26/2014 - 19:34 | 4369395 Tall Tom
Tall Tom's picture

 

 

 

Holiday...

It just another Banking Holiday

We're out of cash so now you just go away

And enjoy your Holiday.

Sun, 01/26/2014 - 18:47 | 4369271 Keyser
Keyser's picture

That notice is rather ominous. Systematic maintenance is halting FX conversions for 9 days. Something doesn't smell right. 

 

Sun, 01/26/2014 - 18:49 | 4369280 maskone909
maskone909's picture

If u peeps havent got ur pm's yet best do it quick

Sun, 01/26/2014 - 18:48 | 4369281 El Vaquero
El Vaquero's picture

They know there is going to be a rather large default on Jan 31 and are trying to stop systemic contagion and bank runs.  

Sun, 01/26/2014 - 18:56 | 4369303 kaiserhoff
kaiserhoff's picture

Well, they got everyone's attention;)

Sun, 01/26/2014 - 19:04 | 4369311 Skateboarder
Skateboarder's picture

It pains me to turn on the cable television, but let me see if any of the news outlets are reporting anything.

CNN: "Who should pay to keep brain-dead mom alive?"

FOX: Obama says "it's our generation's task to reignite the american productivity" or something like that. It actually sounded reasonable, but coming from his mouth, complete horsefeathers.

ABC: Gas prices are rising.

Okay. Business as usual.

Sun, 01/26/2014 - 19:06 | 4369334 Ineverslice
Ineverslice's picture

 

Runs in China will be epic!

Those lines at the train station during New Year's Migration....Childs play.

I want to see it.

Sun, 01/26/2014 - 19:11 | 4369346 akak
akak's picture

 

Runs in China will be epic!

Why is that, more tainted Kitten McNuggets?

Alas, alas, 1.3 billion times alas, just have to run to the nearest roadside and bare with it.

Sun, 01/26/2014 - 19:24 | 4369375 El Vaquero
El Vaquero's picture

I'll have a Big Mutt, a 9 Piece Kitten McNugget, a Double Quarter Horse with Cheese and a Diet Coke, please!

 

Actually, OT, but funny story about me and McDonalds from when I was a teenager.  I was on my way to do a side job to earn a little extra money with a buddy of mine one fine day, and was hungry.  Being a teenager, I was not as put out about McDonalds as I am now, so I stopped at one and ordered a double quarter pounder.  Well, it tasted nasty, and I was only able to scarf down about 1/4 of it before I decided that I couldn't eat anymore of it.  It so happened that I was on the on ramp for the interstate, and I'm a firm believer in merging going the same speed as traffic, so I was already going 50-55mph.  With a simple flick of the wrist, I tossed the thing out the window into that little triangle patch of land that was bounded by the street, the on ramp and the interstate.  Well, a couple of kids that were probably around 13 or 14 just happened to be traversing the patch of land at the wrong time.  Motherfucking MCSMACK!  Right in one kid's face at 50-55mph.  I kind of felt bad for the kid, but that did not stop me from laughing my ass off.  That faux berger drilled the poor kid, catsup and faux beef sprayed everywhere, his hands immediately went to his face and he dropped to his knees. It had to have felt like getting drilled by a boxer, but holy shit!  Can you imagine explaining that black eye to your parents and friends? 

Sun, 01/26/2014 - 20:01 | 4369451 The Joker
The Joker's picture

That story was hilarious but I still had to down vote you...for littering.

It reminded me of another on-ramp story, OT as well.  About twenty years ago I was cruising along with friend in his car on the freeway.  He was driving.  Out of nowhere he looks at me and says "Are you driving?"  I said "What?"  He said "I'm serious, I took three hits of acid and I can't tell if you are driving or I am driving!"  Immediately I told him to pull off the next exit and stop the car, after I called him all sorts of names.  So instead of pulling off the off ramp he drives under the overpass and turns up the on-ramp.  So, I'm yelling at him while he is dodging traffic when sirons and cop lights come on behind us. After we were stopped, the cop comes up to the driver window and says "Son, didn't you see the arrows?  Dave yells, "Arrows?!  I DIDN'T EVEN SEE THE INDIANS!!"

Dave went to jail that night.  Drive sober kids.

PS The look on the cops face was precious.

 

Sun, 01/26/2014 - 19:26 | 4369380 Ineverslice
Ineverslice's picture

 

Wok don't run!

poor little pussies and pups.

 

Sun, 01/26/2014 - 19:33 | 4369392 nmewn
nmewn's picture

Small splattering things.

The Peoples Revolution Indoctrinary Corp (the PRIC's) have already issued a call to arms!

Sun, 01/26/2014 - 19:37 | 4369399 akak
akak's picture

The Great Leap Forward to the nearest roadside!

Because, after all, a turd in the dunghand is worth two in the bushes.

Sun, 01/26/2014 - 19:44 | 4369409 kaiserhoff
kaiserhoff's picture

Capital controls coming in

  4,3,2...

Sun, 01/26/2014 - 21:06 | 4369692 Babalooee
Babalooee's picture

The runs you get in China are always epic

Sun, 01/26/2014 - 21:05 | 4369693 Babalooee
Babalooee's picture

The runs you get in China are always epic

Sun, 01/26/2014 - 21:16 | 4369730 TuesdayBen
TuesdayBen's picture

No.  The runs I had in Greece were the worst.  Wound up in a hospital in Brindisi, Italy!

Sun, 01/26/2014 - 21:17 | 4369735 Miffed Microbio...
Miffed Microbiologist's picture

Well, that was worth saying twice! ;-)

Miffed;-)

Sun, 01/26/2014 - 19:26 | 4369366 OC Sure
OC Sure's picture

Mum's the word to quell panic.

Bloomberg headquarters live from Hong Kong does not have the story either.

Sun, 01/26/2014 - 19:51 | 4369417 nmewn
nmewn's picture

Busily bribing every Chinese official on their roll-a-dex/contacts list no doubt.

Sun, 01/26/2014 - 19:09 | 4369345 Mr Pink
Mr Pink's picture

But....all this time they have been telling me gold, silver and bitcoin have been the tulip bulbs

Sun, 01/26/2014 - 19:34 | 4369396 disabledvet
disabledvet's picture

no, no, no. they've been telling investment manias don't exist. you can have all the tulip bulbs you want.

and gold.

and silver.

and bitcoin.

"just keep buying Beeks."

Sun, 01/26/2014 - 19:01 | 4369319 ArkansasAngie
ArkansasAngie's picture

Closed for maintenance.  I guess they will blaming Obama's NSA?

Monday is certainly going to be interesting.

Sun, 01/26/2014 - 19:03 | 4369322 Uncle Sugar
Uncle Sugar's picture

Let me guess, CGI built the back end programs.

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