Dear Diary,
Today, I’m going to tell you about the end of the world.
Not the end of the world exactly. But the end of the fiat money system President Nixon gave birth to in 1971… when he cut the dollar loose from gold.
And it may feel like the end of the world, because of the social chaos it will provoke.
What follows is taken from a speech I gave at Doug Casey’s La Estancia de Cafayate…
Drowning in Credit
I’ve been predicting the end of the world – at least the end of the post-1971 monetary world – for a long time.
I hope I’m wrong about it. But sooner or later, I’ll be right.
In the meantime, I’m like a surgeon who has just botched an operation. He sees the patient stiff on the table and wonders if he should go back to the textbooks. Maybe the anklebone is not connected to the shin bone after all.
But the textbooks are hopeless. They’re written by modern economists. And they believe an economy is mechanistic, not humanistic.
These folks have fixes for every problem and wrenches in both hands. They also run our central banks. And they think they know what is going on… and what they’re going to do about it.
So they give you “forward guidance.†But it is worthless. Worse than worthless, it suggests knowledge and foresight – neither of which the authorities possess.
Do you remember the Fed giving us “forward guidance†before the crisis of 2008?
I don’t.
Neither Ben Bernanke nor Janet Yellen had any idea what was happening. They couldn’t give any forward guidance about that crisis and can’t give any about the next one.
They just react to events. They neither see them coming nor control them. And they have only one major reaction – even more credit.
But you can’t solve a debt problem with more debt. That’s what the Fed is offering. And that is what the European Central Bank and the Bank of Japan are offering too.
