Alf Field incidentally tells his life history.
Liquidity moves markets!Follow the money. Find the profits!
The distortions that have grown out of the 40 year period since 1971 have reached proportions that demand change. The problem is that the current generation does not understand that the root cause of the GFC is unsound money created at will by governments, combined with a banking system that has enabled the creation of an unsustainable mountain of debt. The modern generation is groping with the problem and gradually working towards understanding that the underlying cause of the crisis is monetary.
The modern generation will have to face some brutal truths as the world deals with the ongoing global financial crisis. The following are the brutal truths that apply to the USA and the world:
THE BRUTAL TRUTHS
The slate needs to be wiped clean and a new sound monetary system introduced.
That will require the elimination of all debt, deficits, unfunded social entitlements, the US Dollar as Reserve currency, and the big one, the $600 trillion of derivatives.
To eliminate these problems by default and deflation will cause a banking collapse and untold economic pain, leading to riots and political change.
Politicians are appointed for relatively short terms and opt for the easy solutions.
While politicians continue to have the ability to create new money at will, they will do so in order to prevent a melt down on their watch.
Consequently the odds point to governments wiping the slate clean by generating enough new money to eventually destroy their currencies.
The new international monetary system is likely to involve precious metals. It will have to be money that people trust and that governments cannot create at will.
This has happened many times before, dating back nearly 900 years to the first paper money introduced in China. History is full of attempts to use paper or fiat money, all of which ended in the destruction of that money. The last century saw virtually every South American country “wipe the slate clean” and begin again with a new money. Some did it several times. The Romans faced a similar financial crisis and resorted to reducing the silver content of the Denarius, eventually by about 95%, before people refused to accept the Roman coins.
There are two things that are different about the current episode. This is the first time in history that fiat or government issued currency has been in use in every country around the world at the same time. Secondly, we have an electronic money system which is very efficient. It enables new money to be created at a faster rate than ever before.
Every experiment with government issued fiat money has ended with the destruction of that money There is no reason to believe that it will be different this time. The world’s 40 year experiment with floating “I owe you nothing” fiat currencies is coming to an end.
I have come out of retirement for this one off, once only, speech to warn that the good ship “Life As We Know It” is sinking.