There will be an economic collapse any day now. Valuations are at the highest level we have seen in years, decades and yes, even centuries. Central Banks are oblivious to the self-destruction they are creating. Eventually taming the animal spirits of the economic market will end in a disaster – hyperinflation. Our beloved currency – the dollar – will falter under the weight of hyperinflation. Everything you have ever saved, all the hard work you have put in at your pitiful 9-5 and all of the investments you have made will be washed away in an instant through the devaluation of the dollar.
The US – strong from a glimpse – but weak from investigative lens, will crumple from the massive debt loads it has taken on. The entire structure the US is built upon is balanced on a pile of debt. Yes, as long as the bicycler continues to peddle, we will be ok. However, once the cycler gets tired, the bike will sway back and forth – eventually falling under its own demise. This analogy fits perfectly with the burgeoning deficit the once great US of A has. The leverage the US has taken on is unsustainable. Effectively, the US is a car speeding down the highway with no breaks – fine if nothing jumps out at it, but a bloody disaster once something gets in the way.
Remember the “Too Big to Fail” companies of the dark times during Great Recession? Soon there will be “Too Big to Fail” countries – starting with the United States. Central Banks are destroying this once great country. Monetary and Fiscal policies are out of control. If you thought the Great Recession was a dark time – just wait – wait until an economic powerhouse collapses under the weight of the over-levered banking system.
We are at the peak of the greatest financial mania that we have ever seen in our lifetimes. Before you know it, the NASDAQ, the DOW Jones and the S&P 500 will be down 75%. Cash in the bank use to mean something. It used to have value. And more importantly, it use to hold its value. Soon it won’t mean jack. The intrinsic value of cash will be worth what it’s truly worth – zip, zero, nothing.
Some of the biggest, most astute investors I know are pulling millions, even billions out of the banking system at once. They don’t trust the value of the US Dollar. Hell, why should they? Why would anyone keep their wealth tied up into a dilution – inflation bearing vehicle? Furthermore, currencies create zero cash flows. If the value of a dollar loses more purchasing power every day, it’s completely asinine to keep it in a deposit account. Furthermore, when the economic system collapses – well how do I put this – good fucking luck getting your money out of a bank account. Oh do I hear the FDIC will save me in the background? Yeah right. The FDIC is a government created consortium funded by hard working tax payer dollars. When the system collapses, the FDIC will not be there to save your precious cash – not like you will need it due to the hyperinflation that is around the corner.
We need to return to the days of truly efficient markets. Efficient markets are a necessity. The current model the economic system is running on is flawed. We need to deleverage the system at every level of modern society. Then and only then, will the fundamental, entrepreneurial spirit, of the free markets return.