"Doubt May Be Uncomfortable, But Certainty Is Absurd"

Tyler Durden's picture

Excerpted from SovereignMan.com's Tim Price,

The ‘anomaly’ over the past century has not just been Asia’s comparative decline, but growth – in Europe, for example – that now looks to have peaked.

Much of that growth was fuelled not by savings, but by credit.

In this respect, the western economies now look about as well managed as North Korea’s; they now reflect what financial analyst Doug Noland cheerlessly but accurately describes as,

“gross misallocation of real and financial resources, economic stagnation, financial fragility, wealth redistribution, rising social and geopolitical tension and central bankers absolutely incapable of extricating themselves from inflationism and market manipulation.”

Perhaps the most extraordinary outcome of the last seven years is that a combination of a Zero Interest Rate Policy, generalised financial repression and trillions of dollars, pounds, euros and yen all conjured out of thin air has failed to trigger inflation in the narrower CPI sense of the word.

Central banks, in other words, have failed. Analyst and market historian Russell Napier of Cerno Capital suggests that,

“[Central banks’] failure to reflate will be very damaging for the price of financial assets and will also ultimately trigger reflation from another source: the government.”

For a number of years we have held gold as part of a diversified portfolio as a form of crisis insurance.

As the dollar value of that gold has fallen from $1900 an ounce towards $1100, many investors have concluded that that insurance has not worked.

But this story has not yet played out.

If Russell Napier is correct in that governments may soon elect to play a more active role in generating the inflation they so desperately require, given the failure of the central banks to create it, how might that affect prospects for gold?

“…the gold price would probably respond positively to enlarged government activity in the capital allocation process. Any sign that the gold price is rising, as the deflationary dynamic unfolds, suggests that such discounting is beginning and thus gold becomes the must-hold asset for both the rise of government intervention and ultimately the reflation that follows.”

But first we have to survive what Napier calls “the next deflation shock”.

If this ‘deflation followed by inflation’ thesis is correct, investors would be well advised to own assets that can cater to each of these eventualities. That includes cash held at reputable and solvent banks, objectively creditworthy sovereign debt, inexpensive but high quality listed stocks, and gold.

The uncertainties are awkward, but we’re all trapped in a gigantic mess not of our own making.

As Voltaire is believed to have said, doubt may be uncomfortable, but certainty is absurd. Almost as absurd as believing that a tiny group of unelected bankers can read the runes of the global economy and manage the price of money accordingly.

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fudge's picture

my bones and chicken blood tell me we're fucked :D :D

Sudden Debt's picture

Like my granny always used to say "when in doubt kill the neighbours dog and read the bones"

I remember that time when she predicted we'd have a argument with the neighbours about someting, and sure thing! That same evening, they came ringing on our door and started yelling!

Amazingly accurate!

After that, she always said: When in doubt, we wait untill it's dark and kill the neigbours cat and read the bones.

 

ZerOhead's picture

"Central banks, in other words, have failed."

Actually Central Banks have done precisely what they were instructed to do.

It's called pulling an "inside job" and now the entire global financial system is rigged to come down like WTC7 unless you accept their IMF/UN/BIS new financial world order.

Money Boo Boo's picture

if you rub Benanks bald head, the greenish blue hue of his reptilian scales begin to shine up

e_goldstein's picture

 You didn't prognosticate that; someone else did.

BandGap's picture

They lost me at holding cash at a "reputable and solvent bank". Because there's a list of those and I would be able to get my money out when I saw the tsunami.

How about a hollowed out stuffed animal in the kids' closet?

Another easy one - "inexpensive but high quality listed stocks". WTF. I guess if I ever sold those I could have the money sent to the reputable and solvent bank, after which I could get my cash out.

Own mining stocks, that's all.

RockySpears's picture

B G

The only reason I am still reading is the comments; "cash held at reputable and solvent banks, objectively creditworthy sovereign debt, inexpensive but high quality listed stocks"

 

I laughed and laughed.

MASTER OF UNIVERSE's picture

Hanging on to Central Banking Orthodoxy will get you a dirt nap so you, and your loved ones, can ultimately become worm's meat in the end.

 

W E L C O M E        to         Z  O  M  B  I  E             E   M   P   I   R   E

Give up. Reality is not scientific nor even mathematical.'s picture
Give up. Reality is not scientific nor even mathematical. (not verified) Oct 20, 2015 4:12 PM

"Almost as absurd as believing that a tiny group of unelected bankers can read the runes of the global economy and manage the price of money accordingly."

LoL!  This has never been the plan.  No.  The plan has always been to ruin the economy, but ruin it in a way that the people ruining it end up on top of the smoking heap that got ruined.

That, they can do.  It's called WWIII.

That also leaves Voltaire's argument intact. -Certainty- is clearly absurd.  Doubt is the big lesson in life.  Reality is infinitely complex in every manifestation of it, from the smallest of the small, to the largest of the large, and everything in between too.  Reality is like a book infinitely long, with every turn of the page, opening yet another infinitely long book.  And that's just reality today, the static view of it. 

Tomorrow, the whole book changes, as it does every tomorrow for as long as the tomorrows keep coming.

The moral obligation set before us is, not to fuck it up for those who come to read the book of reality as we all depart.

Of course, we're not doing so well morally of late.  Philosophy has been put on the back burner, moral philosophy.  Progress in philosophy is slow, but sure, and extremely deadly on many levels.  Ignore philosophy only at your sure peril.

Lea's picture

"Doubt is the big lesson in life.  Reality is infinitely complex in every manifestation of it, from the smallest of the small, to the largest of the large, and everything in between too.  Reality is like a book infinitely long, with every turn of the page, opening yet another infinitely long book.  And that's just reality today, the static view of it.
Tomorrow, the whole book changes, as it does every tomorrow for as long as the tomorrows keep coming."

I'm not sure about what you mean, but my head is surely spinning.

There is only one reality. Unyielding, unchanging. Ignore it at your own peril.
As we're talking of philosophy, Lao-Tzu said it all.
And Voltaire was an atrociously dull moralist (and a crook) who could only be beaten at platitudes by Benjamin Franklin.

SofaPapa's picture

There is one reality, but the trouble is that each of us has only a very tiny perspective on that reality.  I have only my own experience to bring to the party.  Yet there are people who are completely convinced that they can explain the entirety.  This is the basis of religion and all similar popular movements; they tell you "Reality" with the capital R.  But the truth is that each of us has only our own perspective.  To claim that our perspective represents the whole is the ultimate in human arrogance.  We all do it, to one extent or another, and we are all wrong.  The saddest people are those who follow another person and what that person tells the first person is reality.  Believing that a perspective that is not even your own is "Reality"?  That's a derivative of a fustercluck of a clusterfuck.  Politicians love people with that kind of willingness to gift them with impossible powers of understanding.

Give up. Reality is not scientific nor even mathematical.'s picture
Give up. Reality is not scientific nor even mathematical. (not verified) Lea Oct 20, 2015 6:17 PM

There is only one reality. Unyielding, unchanging. Ignore it at your own peril.
As we're talking of philosophy, Lao-Tzu said it all.

Lao Tse indeed had something to say that is appropriate here.

Though you may hear the cock crow on the other side of the hill, never go there.

This is very good advice.   Yours, about reality being unchanging, is blind, ambitious ignorance.

This reality, this one in the here and now, is one-off.  In an instant, it will be gone, all of it, never to return, never even to be revisited.  And there is virtually no guarantee any of the necessary assumptions you or I have made to create our unique subjective perspectives of reality will ever again even cast a shadow on the reality that is fashioned in the next one-off reality, or the many that come thereafter.

I know this.  Life is good.  And life is short.  Without morality to guide the way, what is it that should temper your actions?  Lao Tse?  Confucious?  Or perhaps the state of the political philosophers, Machiavelli, Locke, Hume, Bentham, Paine, Nietzsche and Hegel?

I say none of that is a worthy guide.  The best guide is recognition of our vast ignorance measured in the face of this surely infinitely complex reality that encompasses us all.  Agree to change nothing.  For it is those who pitch change as a solution, the Alexanders, the Napoleons, the reformers and the progressives, who have grand venomous designs for the future of those from whom they gain their sinister, presumptuous momentum.

Alexander conquered pitifully but 33 years.  Diogenes conquered more than nine decades.

 

RaceToTheBottom's picture

Don't shoot (or buy gold) till you see the whites of their eyes.

dojufitz's picture

Doesn't Scientology sell certainty?

They 'know' how to 'know'....