This is not like any period before: 1929-33, 1969-74, or anything. There is more pure debt out there than ever imaginable. There are millions of people who have houses on mortgages, cars on leases, loans for college tuition, maxed-out credit cards, and stocks carried on margin. Maybe not all the above at once, but many. Or, in addition, home equity loans in excess of the value of the real estate.
My concern at the moment is to make sure that I do not get charged for anyone else's extravagances.
But I think I may, in the sense that the only way to reduce all this debt to manageable size is a great deal of inflation.
Last time we had a big inflationary episode I acquired a kookie book from the 1920s with the title, "If Inflation Comes." The essential message there was that the one thing that survives inflation best is personal integrity. Next is good health. After that, a house owned without debt. As for investments, carefully picked natural resources stocks seemed best--but nothing was certain.
Best I can tell, natural gas --though subject to fluctuations from temporary oversupply-- is such a useful substance for so many human purposes that it is unlikely to lose a great deal of value. |
