Biderman & Santschi On Europe's Delusions And Money-Printing Illusions
"People need to stop expecting simple solutions" is how David Santschi succinctly describes to Charles Biderman the delusion that so many European leaders (and seemingly US and European investors) perceive our world. The prevalence of lying and delusion in Europe is what worries the TrimTabs' chaps the most - especially since in a Fiat money system (where money is backed by nothing but confidence) - with the people running the system lying on a grand scale, the chance of systemic failure are very high. He is careful to point out that this is not just a European issue, we in the US are just as delusional, but the European issues are simply more acute. Simply put, "losses have to be recognized honestly" and Biderman's bro' asks rhetorically "why on earth are we five years on still trying to bailout bondholders and banks so they don't lose money on their crappy debt - it's crazy." The two gentlemen of the Bay Area then describe why money-printing does not solve the problem as Europe faces solvency, not liquidity, problems (detailing exactly our thoughts on the fact that so many of the supposed solutions have/will fail and "there aren't any painless solutions to a debt problem". Avoiding all EUR-exposure, holding USD cash/TSYs short-term, and gold as a long-term insurance cover is how they suggest one is positioned. While the tone is less 'ranty', the content is just as pithy - six minutes well-spent for a summary of why Europe's (and the US) problems are far from over - no matter how much hope is placed in CB largesse.