Saturday
The West faces a confluence of predicaments. The first is that governments have borrowed recklessly and extravagantly for decades with no intention of ever repaying the debt. They did it because they could and because it was a wonderful way of ensuring a majority of votes at the election – buy them.
The second is the Regulatory Apocalypse.
The inevitable consequences of the post-WW2 era of ever-more regulations approaches manifestation. The burden can no longer be borne and the ultimate crash will begin. Is that this year – next year? I really cannot say. As has been oft-noted, and as I was reminded recently (thanks Bron), there is an awful lot of ruin in a nation.
See previous articles on regulation – HERE, HERE AND HERE.
It won’t be a recession, by any definition. That is already with us. It will be a crash. The question is not one of whether there will be price inflation or deflation; it will be ‘where are the goods?’ And: ‘what are we supposed to exchange with for the few goods that there are?’
Regulations or, as Keith Weiner aptly names them ‘useless ingredients’ have become so burdensome that the inevitable price of the extensive government overreach must now be paid. The price will be high. Acquaintances have just opened a new business. I wince for their foolishness.
So, what passes for money will collapse and such production as still remains will grind to a halt until a new unit of exchange is organized by the market. Clearly, if allowed, the market will return to its favoured mechanism – Gold, with its surrogate silver.
Economies will crash, but the impediments will remain. Governments will continue to present themselves as the solution, not the problem – in fact they will redouble their efforts to do so. It can be taken as a given that most people will continue to believe them – for a while.
Thus the misery will continue. New economies will not arise until the regulations are dumped – holus bolus.
Each regulation created a new body of enforcers – people hired to police the regulation. In this manner, more and more people left the productive (wealth creation) private sector to enter the counter-productive (wealth destruction) public sector. There will be no economic recovery until all the regulations are repealed, along with all the enforcement bodies.
It could be decades before that happens.
Entrepreneurs can get around most impediments put in their path, they are a nimble and intelligent breed, but the only way around regulations is the black economy.
Get ready to trade in silver.