some thoughts:
it's the system, then the man, but the man has really run amok close to full extent allowed by the bad system, IMO ...
great leaders are chosen; they don't aspire to be great leaders -- another way of saying the same thing you said -- I think there is ample support in history for that proposition.
I agree the problem (debt bubble / imbalances) is a global one. I think there will be a bust -- someone not able to honor the other side of a large derivative contract or many of them before all is said and done. That doesn't necessarily mean a banking system collapse ...
My own view is that there is very little one can do to protect against an all-out banking collapse, except turning all your cash into real goods and you don't want to do that ...
Such things can't be prepared for -- but supposing many possible lesser disasters, I think there are things we can do. At some point reflation fails or pumping to meet the crisis du jour doesn't work ... In that event it will be good to have one's house in order financially: not being overleveraged, having savings greater than 2 - 3 years of living expenses, a plan to substantially reduce living expenses to their minimum should a source of income fail --
Where to put the savings?? that's the tough question. Certainly, I think the dollar would suffer a readjsutment with respect to other currencies in a minor financial disaster (I think the US has to be the epicenter for the next one). The extent of foreign participation in our bond and stock markets is why I think this.
I don't think oil is a 'store of value', although I wish I had the ability to hedge from 3 - 6 months of my own requirements there, likewise propane ( I can buy ahead, I guess). (Many think energy costs are breaking out into a new inflationary spike here ... I don't believe this. I think the tightness will correct itself in as little as one year. We may have a new higher base price -- what does that mean except the dollar has made a permanent drop w/ respect to these. But I don't expect some runaway inflationary bout or a world energy crisis as some believe.)
Re gold -- banksters seem to already have an elaborate system in place to reinforce the concept that gold is not money. Right now they can sell this only to Americans and Europeans, since Asians have already had an experience which was counter to that. I don't know what more banksters can do if government statisticians get overwhelmed and have to honestly report some "price inflation" which I think is likely near term.
Long rates are going up -- lowering short-term rates does so little to help the refinance situation lately -- a significant source of 'powder' for them as well.
Higher gold lease rates and lower short term risk free rates, I think, are going to start putting a crimp in their style as are the drawdown at CBs. Obviously, I am bullish on gold, but I could be wrong. If something really terrible happens -- the banksters can change the rules -- there's already rumbling along this line. Greenspan has already said he doesn't like the rules and would like to see an overhaul. Crises are always an opportunity for emergency rules -- I don't know that you can protect yourself from these either. OTOH to take no defensive action against the 'printing' just leaves you open to what amount to outright theft of purchasing power ...
Perhaps put some savings (what you would otherwise ordinarily hold in cash) into currencies of strong nations outide the US -- preferably more than one. Some perhaps in gold and another commodity ...
FWIW --I am invested in gold shares and still think there may be a bull in the metal without prolonged "runaway inflation."
I think the sytem is so thoroughly bad it will take a significant crisis before there is meaningful reform. I think markets can set interest rates leading to a more stable environment for business -- such a change doesn't have to be a "step-change" as in abolition of the Fed, but since I think a crisis will be necessary for the change to take place ... Abolition of the Fed will never happen, but a change of leadership or rather the appearance of leadership instead of "tail that is wagged," is a very real possibility.
The attention the GSEs are getting lately in congress is interesting. I am not sure what to make of it ... |
