tippet: is it the man, or the system?
I recall reading somewhere that it was only the least qualified to rule that should be elected to the post.
Wait... checking sources: that was in that four and a half part trilogy "The Hitch Hikers Guide to the Galaxy"... OK, so it's true.
AG is no deity, and I doubt he wants the mantle.
The system is deplorable, but it is molded in its shape by forces larger than itself - because no sane mind would create the situation in which we find ourselves. Even an insane mind would have a hard time contemplating it, let alone steering its existence.
So to abolish the system without addressing the forces just leaves nothing for them to push on. Which leads to random - or at least unpredictable - outcomes. I would rather see the system examine its structural weaknesses and attempt to take actions against the forces.
CB is on to something, as usual.
Which in the current case seems to be a massive overleveraging of the derivatives market. In a system of excess promises of future rewards there are four solutions:
(a) reneg totally on some
(b) partially reneg on all
(c) stall until the promise expires or the holders forget
(d) redefine the promises
I can not think of (e) that would not be a combination of above.
We do not know how to handle the collapse of the world banking system, which is what would happen if (a) gets out of hand here, or (b) shakes consumer confidence. It took days for the run on banks to develop before there email and CNN. I wonder how many minutes we'd have if one was triggered now? It takes me about 15 minutes to get to my branch... hmmm... I hope I have enough time.
But we have dealt with inflation many times before. So, the devil we know, or the devil we don't know. Seems pretty clear that the banksters (not just AG, the whole system) would prefer inflation to collapse. Sure, they'd have a bigger mess, but at least they think they know how to clean it up. Or (more self serving) they will exist to be there at the cleanup.
Thus we will see all efforts bent on (c) and (d) above and the banking system will do everything it can to preserve itself.
In truth, I hope it succeeds. Because I can not fathom how our techno-leveraged society will function during the anarchy if the banking system fails.
The questions then arise: (a) what is the appropriate defensive stance to take, and (b) what risks is accepting by adopting this stance?
I do not know the answers, but on (a) some musings:
In regional inflation, alternative currencies (e.g. gold)have been the best hedge, because a mans wealth can be transported by a man across the boundaries 16 oz x 100 lb x $250 is $400,000.
But what if the inflation this time is as global as the problem, and there are no boundaries? Further, if indeed we had a properly engineered inflation, would the engineers support or undermine the emergence of a fiat to their fiat currency?
I think oil instead of gold. Storage is a problem. So shares in storage facilities are a next best bet. Or in companies with oil reserves as a "liquid" asset.
Fixed cost producers of stuff: hydro-electric or nuclear generators for example.
Or engineering metals - not as coinage, but for engineering purposes. Pt far better than Au. Silver is no good.
Beef on the hoof... virus free. Wheat, harvested.
These are random musings, tossed open to the thread.
But I really don't think we should toss out the system. I think we should let it do its job, and figure out what that job is and position ourselves appropriately.
FWIW.
John |
