2019: Zombie Markets Before The Fall


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    Francis Tattegrain La ramasseuse d’épaves (The Beachcomber) 1880   I haven’t really written about finance since April of this year, and given rec
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    Great explanation.
    I could not have said it better.

    I see JAPAN in our future.

    Everyone, (gov. included) who lent money or printed money, that does not need the cash flow revenue to live on can have a jubilee in their future and nothing would change in our social/economic system. No one would be poorer or richer.


    put it in prospective ….
    when the shit hits the fan

    The mysterious decline
    From the late eighth century through to the end of ninth century something mysterious happened to the Maya civilization. One by one, the cities were abandoned and by AD 900 the entire civilization just collapsed.
    To think that some 4000 years ago, someone stood in the exact place as you perhaps participating in a ritual ceremony! Welcome to the world of the Mayans.
    The Mayan civilization is probably one of the greatest pre-Columbian civilization that extended from central America to present-day Belize, Guatemala, El Salvador, Honduras and southern Mexico.

    V. Arnold

    Francis Tattegrain La ramasseuse d’épaves (The Beachcomber) 1880

    A remarkable painting; rich in reality and detail of the period.

    As you have said over the years; the financials are broken and for all practical circumstances meaningless; unless, of course, one is still in the “markets”.
    Gold is interesting; silver less so; but having a bit of both can’t hurt, yes?

    I find it disturbing that most still do not understand debt and its necessity for the economic model to function.
    I think it’s that lack of understanding that is going to be the coup de grace of the present system.


    The only way we are going to get normal interest rates and normal asset prices is through a period of very high inflation. As money loses its purchasing power, the effect is 1) Real asset prices will fall. 2) Real liabilities, be they real private or public pensions will fall. and 3) Real savings will fall. In effect, the future will have be repriced to reflect reality. We have borrowed.from the future so the pay back is we will have less real pensions and less real savings in the future. eg we will all be poorer.

    Couple this with the end of growth (on our finite planet) and we will have what is commonly called stagflation.

    How does the Fed lose control of inflation? I think when the Dollar loses its reserve currency status in favour of an energy backed currency from one of the major fossil energy exporters. The current war against Russia makes a lot of sense now.

    Dr. D

    I don’t know, there are too many permutations to fully guess. You are right that we would lose “savings” (in the cash sense) because by definition anything that is a “reset” MUST erase the un-reality, the illusion of all the fake promises that won’t get paid. As those promises are erased (like your pension fund), we’d the accounting illusion would fall back to the real economy, which is horrible.

    How can that happen? Well, as Hugh Smith says, you need to meet a problem that can’t be solved by printing free money. That’s a lot of problems, since you can buy people or buy the murder of whole nations, but if the dollar is rejected and inflates, inflating more would be a thing additional issuance wouldn’t help. …And we all know we’re never going to pay the debt.

    Sidenote, we CAN always drop back to an asset-backed dollar, like a gold dollar, or even bitcoin. However, flipping from inflationary issuance to sub-2% stable currency would make every debt much, much harder to pay. This again helps the CREDITORS, not the debtors, so for our sake, they need to flush the majority of the debt first, before restabilizing on sound money.

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