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We Live In An Era Of Dangerous Imbalances

And history shows they correct painfully
Friday, February 13, 2015, 8:19 PM

The intervention by the world's central banks has resulted in today's bizarro financial markets, where "bad news is good" because it may lead to more (sorry, moar) thin-air stimulus to goose asset prices even higher.

The result is a world addicted to debt and the phony stimulus now essential to sustaining it. In the process, a tremendous wealth gap has been created, one still expanding at an exponential rate.

History is very clear what happens with dangerous imbalances like this. They correct painfully. Through class warfare. Through currency crises. Through wealth destruction.

Is that really the path we want? Because we're for sure headed for it.

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8 Comments

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2888
The shifting Overton window

America! laugh  >>> Amerika indecision >>>  'Murika surprise >>> 'Murka crying

Freedom! laugh >>> Freedom indecision >>> Free*<snap!>*dom surprise >>> Free (stuff) & Dumb (people) crying

Michael_Rudmin's picture
Michael_Rudmin
Status: Platinum Member (Offline)
Joined: Jun 25 2014
Posts: 922
Time2help, don't go there

Just a point:  that there is no point in pounding your head against a wall, and it looks to me like that's what you're doing. 

America is what it is, and the world isn't much better:  we are where we are.  Although there are places that might be much better to live in, during disaster time, nonetheless it is usually better to live where you know the socio-political terrain, and then improve your own piece of terrain as well as you can.

That means, go heavy on the human charity, heavy on the food- and warmth- charity, medium light on the financial charity to individuals, light on the diatribes.  Make friends, not enemies.  Be with a few groups of like-minded people, but not ones that require heavy payments.  And remember:  in your charity, more inclusive is better.  Assume good of those you see, even in light of evidence of bad. 

Understand that technology is NOT ALWAYS YOUR FRIEND.  Learn to do things by yourself; learn what foods you can eat from the wild, ahead of time, and how to eat them (some things are edible if prepared properly -- tapioca, for example -- and deadly if not). 

 

 

ckessel's picture
ckessel
Status: Martenson Brigade Member (Offline)
Joined: Nov 12 2008
Posts: 486
Nice job Adam. Thank you at

Nice job Adam. Thank you at Peak Prosperity for continuing to 'bang your head against the wall'. It is voices like yours that continue to carry a very important message to the citizenry and I appreciate your efforts.

Coop

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2888
Re: Don't go there
Michael_Rudmin wrote:

Just a point:  that there is no point in pounding your head against a wall, and it looks to me like that's what you're doing. 

America is what it is, and the world isn't much better:  we are where we are.  Although there are places that might be much better to live in, during disaster time, nonetheless it is usually better to live where you know the socio-political terrain, and then improve your own piece of terrain as well as you can.

I hear you Michael, duly noted.  What really gets to me is the willful blindness I see in so many day-to-day, Arthur has wrote about that some.  A good number are waking up, but in others...you can see the physical reflection of the cognitive dissonance on their faces when talking to them. And yet they still bury their heads further in the sand. Guess I still hold onto the belief that as a country and a people we can do so much better. Now hold that thought up against what is currently happening in the world, and imagine the cognitive dissonance that generates.

AKGrannyWGrit's picture
AKGrannyWGrit
Status: Gold Member (Offline)
Joined: Feb 6 2011
Posts: 498
Have Some Grit

I have a daughter that is a wonderful mother, wife and full time business owner. She doesn't "get it" because she can't take on one more thing to worry about. Solution, I prepare for her, the grandkids an try not to add additional stress by pushing what I see on her or the family.  Really, not everyone "needs" to see what we see.  My kids trust me and when the time comes will ask for guidance.  So stop wanting for everyone to get it and start doing what needs to be done for those you love and be prepared to help them through the tough times.

AK GrannyWGrit

Yoxa's picture
Yoxa
Status: Gold Member (Offline)
Joined: Dec 21 2011
Posts: 306
Stop wanting for everyone to get it.

Granny, I like that way of thinking. An ounce of practical preparation is worth a pound of talk, or something like that.

We too are making prep decisions with our extended family in mind, not just ourselves.

saveandprotectmoney's picture
saveandprotectmoney
Status: Member (Offline)
Joined: Nov 16 2014
Posts: 1
Pounding my head against the wall.

Folks never want to hear the bad news, but when it comes to events like the Great Recession of 2008, they are asking for bailouts since they can no longer make the payments on the over inflated homes they bought.  Moreover, the middle class retirees are not understanding why they are no longer making 8% from their savings account well into their golden years. Their returns on investments are well below and are forced to stay employed in the workforce. Why, because they were never prepared and doing their homework and watching videos on imbalances

It's a zero sum game, money never vanishes but somehow meanders over into the hands of the rich and this is why the gap is widening between the middle class and the rich: The rich sit up at night reading and understanding the imbalances and they are the first to sell out of the markets reaping huge profits while the middle class haven't got a clue of what's going on.

I am middle class and my portfolio was reduced by 40% in 2008. Luckily I wasn't planing on retirement, I didn't sell and thankfully my portfolio has since recovered and I've made more. However that was 6 years ago, which puts me a little closer to retirement age (still ten years out),  and therefore I need to pay a little more attention on the imbalances, educating myself and making the necessary adjustments accordingly. Thank you Peakprosperity.

 

 

 

 

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2888
Re: Have some grit

Alright. When Granny tells you to man up, maybe it's time to take a step back and gather some perspective.

Thanks AKGranny.

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