Do you ever get the feeling that you are in some kind of weird dream, where
someone is holding a pillow over your face so that you can't breathe, and you
can dimly hear your children asking, "Is he dead yet, mom?" and I am thrashing
around and yelling out, "No, I'm not dead, you morons!" but nobody is paying
attention? Me, too!
And I get the same feeling watching the collapse of the economic system, as was
always confidently predicted by the Austrian Business Cycle Theory and proudly
on display at Mises.org, as my head is spinning, spinning, spinning around with
wild conspiracy theories to try, desperately, to explain how a country that has
so many colleges and universities, and which have
graduated so many self-important alumni, for so long, has allowed this to
happen!
And, as cold comfort as it is, it's not just us. Everybody, in every country,
is in the same boat, a nice little yacht made of promises and paper instead of
fiberglass and steel, now being tossed and battered by an angry sea of losses
and bankruptcy instead of water and waves, which, if you have ever made a paper
boat out of a sheet of paper and put it in the water, always results in
disaster when it gets soggy and ends up as a wet, useless, misshapen lump of
soggy paper, ending your dreams of building a paper boat big enough to hold you
so that you could just sail away to someplace where you could stay up as late
as you wanted, and you could eat cookies and cake for breakfast if you wanted,
anytime you like, and you didn't have to listen to anybody tell you that
Keynesian economics is not the piece of crap that it is, or that the Federal
Reserve is not the treacherous, traitorous, ruination-by-inflation piece of
crap that IT is.
Extending the metaphor (since I seem to be on somewhat of a roll), it is the
euro that is in the part of the paper boat that is sinking fastest, although
The Economist magazine is ever-optimistic, and says that "the euro's decline,
in contrast, should bolster exports for big manufacturers (particularly in
northern Europe) and luxury goods companies while boosting tourism across the
continent", which makes me wonder where in the hell people are getting the
money to go on a European vacation and buy luxury goods because there is nobody
around here in the United States like that.
In fact, this is a dismal fact that was brought up by Larry Kudlow, on CNBC,
where he asked some panel of morons for their explanations of where the money
for real recovery is going to come from, now that the figures show that M3
money supply is falling, incomes are falling, the equity-extraction ("Your
house is an ATM machine, ready to spew out money!") madness that swept the
country is completely gone, the collateralized mortgage market has disappeared
and it is, I summarize, bad (pause) news (pause) all (pause) around.
Nobody, of course, had an answer to where the money was going to come from,
meaning that everybody assumed that the money would come from, I assume, the
same magical fairy-land where everybody lives, we collectively assume, happily
ever after, and nobody ever has to live next door to somebody like me.
Unless, of course, the magic will be in the rising prices of gold, silver and
oil, which makes investing so pleasantly easy that you involuntarily find
yourself giggling aloud "Whee!"
Richard Daughty is general partner and COO for Smith Consultant Group,
serving the financial and medical communities, and the editor of The Mogambo
Guru economic newsletter - an avocational exercise to heap disrespect on those
who desperately deserve it.
(Republished with permission from
The Daily Reckoning. Copyright 2010, The Daily Reckoning.)
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