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The usual food fights over inflation and deflation drive me nuts. Too many variant meanings for words are used, with too little good humored awareness of the other sides meanings.
At the same time, the apparent contradictions between collapsing debt and increasing money supply have confused me.
Moreover my tin-foil-hat doom-and-gloomer side has been bracing for this collapse of debt paper bubbles to continue down, taking out the underlying monetary system as well. Mad Max Time. The time when wolves feed on cows, which would be a dangerous time for yours truly.
The whole thing has been playing out in my mind for a couple of years now, as if I had just walked into a rumble in a prison, unable yet to determine who was on which side, who started it, or who would likely be the ones to finish it.
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It seems clear to me now what will happen.
The debt bubble will continue collapsing.
But most national monetary systems will hold.
In prosperous times, governments buy our affections. In difficult times, they steal them at the point of a gun and by oppressive surveillance and regulation.
The monetary system holds so long as the government holds.
It is abundantly clear (shown once again Sunday with the passage of the so-called Health Care bill in the U.S.) that the major national governments hold. Parties, candidates and scathing cartoons will come and go. But the appetite of the major national governments world-wide for such tyranny as they deem necessary to maintain control is more than adequate to that task.
Therefore the monetary systems of the major nations hold.
So we have debt fueled bubble collapse, answered with increases in money printing and tyranny.
This will drive up the nominal prices of essential commodities, goods and services. This will drive up the nominal prices of the stocks of companies who are still more funded by doing business in such commodities, goods and services. It will devastate the stocks of many companies that are too dependent on debt paper.
This will drive up the nominal price of gold. Here I am echo'ing the thoughts of one of my favorite commentators, the One Handed Economist, Howard Katz, in his latest subscription letter. Gold goes up, in his experience and forecast, when "inflation", as seen in the nominal prices of the essential goods and services (e.g. food, gas and rent), rises strongly.
Such inflation will happen. The sharp eyed here have been seeing it for a year already. But the average man in the street is not yet hoarse from screaming in agony over the pains of inflation in the prices he pays daily. Therefore gold has not yet peaked (it's not even close to the peak.)
Our governments will not wimp out. Their inner tyrant will prevail. Hence the monetary systems will prevail (modulo a quite possible Bretton Woods III recasting of the world's inter-national reserve currency.)
Summary Prediction:
.
I am in that long line of people expecting another down draft in the debt paper fueled asset and derivative markets. Yes, I know, Mr. Market despises long lines. Oh well. With this down draft, the tin-foil-hat side of me expects another excuse (a "convenient" crisis) to increase government tyranny. One or two smaller governments will likely collapse, by way of justifying the increasing iron grip of larger governments. This will not be good for my blood pressure. Oh well. But it will mean that the monetary system holds, for the essential basis for a monetary system is political power, and we are still a long way from "Peak Tyranny."
At the same time, the apparent contradictions between collapsing debt and increasing money supply have confused me.
Moreover my tin-foil-hat doom-and-gloomer side has been bracing for this collapse of debt paper bubbles to continue down, taking out the underlying monetary system as well. Mad Max Time. The time when wolves feed on cows, which would be a dangerous time for yours truly.
The whole thing has been playing out in my mind for a couple of years now, as if I had just walked into a rumble in a prison, unable yet to determine who was on which side, who started it, or who would likely be the ones to finish it.
===
It seems clear to me now what will happen.
The debt bubble will continue collapsing.
But most national monetary systems will hold.
In prosperous times, governments buy our affections. In difficult times, they steal them at the point of a gun and by oppressive surveillance and regulation.
The monetary system holds so long as the government holds.
It is abundantly clear (shown once again Sunday with the passage of the so-called Health Care bill in the U.S.) that the major national governments hold. Parties, candidates and scathing cartoons will come and go. But the appetite of the major national governments world-wide for such tyranny as they deem necessary to maintain control is more than adequate to that task.
Therefore the monetary systems of the major nations hold.
So we have debt fueled bubble collapse, answered with increases in money printing and tyranny.
This will drive up the nominal prices of essential commodities, goods and services. This will drive up the nominal prices of the stocks of companies who are still more funded by doing business in such commodities, goods and services. It will devastate the stocks of many companies that are too dependent on debt paper.
This will drive up the nominal price of gold. Here I am echo'ing the thoughts of one of my favorite commentators, the One Handed Economist, Howard Katz, in his latest subscription letter. Gold goes up, in his experience and forecast, when "inflation", as seen in the nominal prices of the essential goods and services (e.g. food, gas and rent), rises strongly.
Such inflation will happen. The sharp eyed here have been seeing it for a year already. But the average man in the street is not yet hoarse from screaming in agony over the pains of inflation in the prices he pays daily. Therefore gold has not yet peaked (it's not even close to the peak.)
Our governments will not wimp out. Their inner tyrant will prevail. Hence the monetary systems will prevail (modulo a quite possible Bretton Woods III recasting of the world's inter-national reserve currency.)
Summary Prediction:
Governments will continue printing, daily prices of food and gas will rise strongly, and gold will shoot much, much higher. Later on, as gold peaks, this will drive speculation in gold mining stocks and in silver, both of which will peak later.
jtabeb - here I come .I am in that long line of people expecting another down draft in the debt paper fueled asset and derivative markets. Yes, I know, Mr. Market despises long lines. Oh well. With this down draft, the tin-foil-hat side of me expects another excuse (a "convenient" crisis) to increase government tyranny. One or two smaller governments will likely collapse, by way of justifying the increasing iron grip of larger governments. This will not be good for my blood pressure. Oh well. But it will mean that the monetary system holds, for the essential basis for a monetary system is political power, and we are still a long way from "Peak Tyranny."
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