CLEARLY MASS LIQUIDATION IS THE NAME OF THE GAME NOW...
AND IT APPEARS THAT THE FED OR CONGRESS WILL NOT BE ABLE TO PREVENT THIS WITH RATE CUTS, LIQUIDITY OR STIMULUS PACKAGES...
SO DOWN EVERYTHING GOES...
THIS INCLUDES COMMODITIES LIKE OIL AND GOLD...WHICH "SHOULD BE" HIGHER BECAUSE OF THE MASSIVE MONEY ISSUANCE... AND INDEED, IN HUNGARY...THEY HAD TO RAISE RATES TO PROTECT THEIR CURRENCY...
AT SOME POINT THE CURRENCY DEBACLE WILL KICK IN AND COMMODITIES WILL RISE...AND PERHAPS RISE GREATLY...WHEN EVERYONE IS DONE "BUYING CASH"...
WHICH IS ESSENTIALLY WORTHLESS PAPER MONEY ....
THEN COMES THE MOVE TO HARD ASSETS...
SOME RESEARCH ON THE EXACT NATURE OF THE WIEMAR HYPERINFLATION SHOULD BE DONE NOW...TO SEE HOW THEIR HYPER-INFLATION GOT STARTED...OBVIOUS...THEY DIDN'T GET INTO THE "WHEEL-BORROWS" OF MONEY SCENARIO OVER NIGHT...
THERE WERE INTERMEDIATE PHASES TOO...AS IN THE CURRENT SITUATION...
AS LONG AS THERE IS A HEADLONG FLIGHT OUT OF ASSETS AND INTO CASH...THE ANOMALIES WILL CONTINUE...
THIS WOULD BE AN EXCELLENT TIME TO STUDY AT A MICRO LEVEL THE MECHANICS OF A POST KEYNESIAN MAJOR CRASH...
I AM SURE THAT THESE DAZE WILL BE STUDIED FOR CENTURIES TO COME BY ECONOMISTS AND OTHERS...
THE LESSON SO FAR IS THAT DURING THE HIGH POINT OF A PANIC...EVERYTHING IS LIQUIDATED...EVEN THINGS THAT SHOULD NOT BE...LIKE GOLD AND OIL...
THE TENSION IS BETWEEN THE DECLINE IN DEMAND...AND THE MASSIVE PRINTING OF MONEY.... IN SHORT...HYPER-DEFLATION AND HYPER-INFLATION...
MY HUNCH IS THAT AFTER THE HYPER-DEFLATION OF DE-LEVERAGING AND MASS LIQUIDATION IS OVER...
THEN AND ONLY THEN WILL THE INFLATIONARY ASPECTS KICK IN...AND PERHAPS A RUSH TO HARD ASSETS....
OF COURSE THE CENTRAL BANKS THINK THEY CAN "SOP UP" THE EXCESS LIQUIDITY WITH RATE HIKES... BUT HIKING RATES IN THE MIDDLE OF A DEPRESSION WILL BE INTERESTING TO SEE...
THE HISTORICAL EMPHASIS SHOULD BE ON GERMANY IN THE 1920'S...AND PERHAPS FRANCE IN THE 1720'S...
NO OTHER COLLAPSE IS SIMILAR...
PERHAPS WE ARE GOING TO GET "SOCIALISM" AS A RESULT OF THIS TOTAL COLLAPSE OF CAPITALISM IN THE END...
MARX WAS RIGHT!!
P.S. WHICH MARX? NOW THAT IS STILL TO BE DETERMINED!
