Thursday
The markets are manifesting an exuberant and giddy blend of hope and fear. The primary cause is the seemingly bottomless credit being pumped into the system. Crypto Mania (CryMan) will end up more famous than Tulip Bulb Mania as an example of group nuttiness.
The problem is that either the credit will stop, or that the credit will become greatly devalued. For the first time since the latter half of the 1970s, confidence in the US$ is shaky. Gold is stirring; it is beginning to make a statement on the perception of the dollar’s value. I strongly suspect that, before the end of 2022, we will see a big fall in the value of the dollar. Translation for the bugs – a big rise in the dollar price of Gold (and silver).
I have never witnessed such a lack of confidence in a US administration or the Federal Reserve Bank. For better or worse, mostly the former, the US has been the dominant power in the world since the end of WW2. They were the ‘don’t mess with me’ world sheriff. The present administration is weak, extremist and compromised (not to mention illegitimate) and the rest of the world can see that just as clearly as you and I. That has greatly exacerbated Peak Uncertainty. Anything is possible – coup d’etat (France?), war (Asia or the M.E.?), hunger (food prices and unemployment both rising), a real pandemic? If the present conflict in the M.E. spreads, which seems likely, it will disrupt the flow of oil.
A time of major change is upon the world. The evidence has been clear to see for over twenty years, but only if one was looking. Now, it is glaringly obvious even to the myopic.
Too much foolishness by too many governments has led to too much debt. That debt was used to buy votes with, amongst other things, cradle-to-grave welfare. The debt is now too big to be serviced, let alone paid down. That is why the interest rates are so ridiculously low. If they rose to anywhere near market, the debt would collapse within months – along with the debt notes that denominate it, which we call currencies.
Move out to a small country town, which is at least a two hour drive from a major city, and put as much as you can into Gold, silver, food and petrol.
Then put yourself through a crash course in vegetable gardening.
It is going to be interesting.