Financial Bubbles | timiacono.com

Debt: The Descent into Madness

I think Grant Williams is right when he says that more books will be written about the last ten years and the next ten years than any other period in modern history and, importantly, writers are not likely to look kindly upon the current crop of central bankers.

With the gold price now closing in on $1,400 an ounce (and perhaps set to go much higher), look for more from Mr. Williams and others who have endured a difficult few years due to a struggling market for precious metals and related investments.

Ron Paul: The End (of the EU) is Near

The CNBC click-bait headline for their Ron Paul interview surely had some readers thinking they needed to check to see if they were stocked up on bullion and bullets, but, the former Congressman from Texas was just talking about the European Union.

Familiar themes here – rampant central bank money creation, serial financial bubbles, widespread malinvestment, goverment overreach, too much debt – that will someday gain wider acceptance as the cause, not the cure, for many of the world’s ills.

Jim Rogers on Brexit

As might be expected, 73-year old billionaire investor Jim Rogers isn’t hopeful about what the Brexit vote portends for the global economy and financial markets.

It’s hard to believe that this will be “worse than any bear market you’ve seen in your lifetime”, particularly after the little episode of eight or nine years ago, but you never know.

The Rubes Are On to the Rig

David Stockman details The End Game Of Bubble Finance – Political Revolt:

By the eve of the great financial crisis, the GOP was actually controlled by the racketeers of the Beltway and the Wall Street gamblers, not the red state voters who had elected it.

In fact, Goldman’s Sach’s plenipotentiary to Washington, Hank Paulson, was in complete command of the elected side of government. At the same time, the Bush White House had populated the central banking branch of the state with proponents of monetary activism, who were more than ready to authorize “heroic” measures to reflate the bubble.

Needless to say, the leader of the pack, Ben Bernanke, had been groomed for the role of chief bailster by none other than Milton Freidman. The latter, in turn, had led Nixon astray at Camp David 37 year earlier when he persuaded Tricky Dick to default on the dollar’s link to gold, thereby opening the door to fiat money, massive credit expansion and the modern era of Bubble Finance.

There is a straight line of linkage from that great historical inflection point to Friday’s Brexit uprising. Namely, Nixon’s abandonment of the Bretton Woods gold exchange standard, as deficient as it had been, was also a profoundly political act.

It resulted in the abdication of economic and financial policy to an unelected elite and their eventual capture by Wall Street and the forces of speculation and financialization unleashed by unanchored central bank money and credit.

Nixon’s destruction of Bretton Woods was the enabling event. It turned central bankers and financial officialdom loose to operate a dictatorship of bailouts, bubbles and financialization of economic life. And to spread this baleful regime to Europe, Japan and the rest of the world, too.

One of the big things being missed in all the Brexit blather is that, as with Trump in the U.S., voters are not so much voting FOR Brexit as they are voting AGAINST the status quo.

People don’t really understand what’s gone wrong (and are increasingly distrustful of policy makers who claim they do understand) – but they know that something has definitely gone wrong and see no reason to continue down the same path.

The Ascendancy of Populism

Handelsblatt’s Gabor Steingart had some thoughts about how they’re handling the British exit from the European Union in Brussels where, apparently, they still don’t seem to get the whole “lower- and middle-class angst under the thumb of the ruling elite” thing.

To wit:

We shouldn’t bash the outraged electorate who brought this upon us – they are like passengers in an aircraft locked in a tailspin, panicking as the pilot slumps in the cockpit. No, they shouldn’t be allowed to take over the controls, but the pilot needs to wake up.

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