To be out of debt is to pass up opportunity to be short fiat on its inexorable path to its inherent value of zero ... and true enough, it is also to be free of the open-ended risk of shorting, that of being faced with sudden margin calls/payments you can't make in time, where you're right on the call, but you're right a little too soon, or right a little too late, or both
I like being short the loonie against real things, land, timber, metals, oil, and the like, and have been continuously since the late sixties to some degree or other, with three exceptions, twice for a bit over a year each after selling properties and before buying others, and in '96 for about a day and a half, after closing on a property, buying canadian chartered banks, and by the end of the second day dipping heavily into margin to leverage more banks ... in for a penny, in for a pound, is the philosophy, and when you run out of your own always-limited funds, you use OPM ... works well, until the day it doesn't work
It didn't work so well in '80-'81, interest rates went sky-high and suddenly there was no work around, no money available anywhere, timber i had expected to sell '81-'82 or so crashed to about half the gross value at the mill ... had a piece sold, but the deal fell through, buyer couldn't get the financing, plus i got stiffed on some contract work, didn't get paid till years later .... kee-runch, liabilities caught up to and exceeded assets real quick ... had a good rich interesting life working things out of this hole through the eighties, don't feel any need to repeat it though, lol
It took a Volcker to cut off money supply like that, it took a Carter to appoint him, and that was only done after inflation had run to figures far above those of today ... i doubt that there exists anywhere the political capital to do this now, it seems the powers-that-be think they've got things smoothed out and are able to manage the business cycle, it's a crock of course, we'll get eventually another brief period of deflation when 'the savers' [of fiat - can you really call that 'saving'?] have a short winning run, but not soon imho ... got to keep an eye on the infla/defla balance for sure, very critical question
Things That Cannot Last, And Therefore Won't:
1. periods of inflation/credit bubbles
2. periods of deflation/credit bubble pops
3. periods of fiat currencies being perceived as reasonable storehouses of value
4. oil
5. metals reserves of majors
6. cheap metals [see no. 5]
7. ultimately, either our species or its rate of growth |
