Safe to say, with oil cut in half, precious metals prices contained below $20, and both housing and equities booming on little to no real economic growth, we are at peak ignorance in terms of monetary understanding.
This cannot end well.
And yet for many who see the injustice, the inequality, or have dared witness the raping of justice on the way to this perception, the blame is too often misplaced. The sad reality is that those who are left to think about it come to the conclusion that the problem is capitalism - that more of the same should be implemented.
Once again, like monkeys rescuing the fish from drowning in the river, we proclaim, "If only we had gotten there sooner" each time the fish dies.
Or we could do more. Or we double down in our efforts to save the system. More printing is the solution because we haven't done enough.
Capitalism does not exist anywhere except, perhaps, for the farmer's market or on Craigslist. Of course, if they could intervene in those two areas, they could. And they are trying.
Worldwide, we have not seen anything close to true capitalism since the great panic of 1907 - when the first coordinated bailout was put together by none other than JP Morgan. And soon after, the precedent was set for rescuing the elite each time they got too close to the edge of solvency.
We've gone on since then to approach the event horizon of fiat in terms of Moral Hazard, and too big too fail. The only solution is a solemn acceptance, one that will not come easily for the neither the unwashed nor the pampered.
But more than likely we will cling frantically for that which we never really had; from the phantom wealth created and destroyed in one bubble after the next - to the self righteous, false prosperity that came with it.
Real wealth is denial of:
- The sinister tax that is inflation.
- The shameful misallocation of capital.
- The gulf between justice for the elite and justice for all.
- The propaganda that has led to a class of champagne socialists.
The anger will come with the next crash. The bargaining will follow with more empty promises and demands for subsidies and handouts.
This new layer of spending on top of what it is already 'un-fundable' will tip the scales toward monetary collapse - the theme we have been documenting for years.
Depression will be deep and long lasting, with civil unrest and total loss of institutional confidence. Finally, acceptance will come from a grass roots swell of basic commerce starting over again, barter, and local currencies.
For now, the level of spiritual ignorance in this country and abroad is run amok. The challenge is to get people to want to question their current normalcy and evolve from there, because that involves pain and grief - literally.
It's out of our control. What can we do about it? What does that question really ask?
It comes from helplessness. A choice to be ignorant. A choice to hide
And the worst kind of fear: hope.
It all comes back to preparing for the worst, and letting the best take care of itself. Easy to say - hard to implement.
This issue also reminds me of the questions I receive almost every day about the confiscation of precious metals: What if they confiscate it? What if they come take it away from me, or make it illegal, or arrest me for owning it?
What they are really asking is about freedom and autonomy. And that is already gone. All of these policies, from inflation to price controls. They have captured us already.
The real question should be: What happens when I make it to the other side of this debacle?
For courageous precious metals investors who have skipped denial, anger leads to battening down of the hatches. Bargaining is preparing for a temporary barter economy. Depression is the rebuilding; and acceptance is the realization and peace of mind that comes from re-leveraging the seed corn.
Therefore, we accumulate on dips as usual and nurture the only part of a portfolio that is real and independent of liability and free of risk.
For four thousand years these metals have been money. A few generations of Keynesians will not change that.
