Anatomy Of A Crisis: 2011
by Charles Hugh Smith
What’s behind the disturbance in the financial Force? QE, ZIRP, the dollar peg and inflation, to name a few factors.
There is a great disturbance in the world’s financial Force. Many sense it as a storm on the horizon, something not yet visible but telegraphed by a rising, swirling wind and a new electric scent in the air.
I don’t claim to have a complete narrative that accounts for all the points of friction wearing down the moving parts, nor do I claim a “solution.” But a few observations might help inform our awareness of the disturbance.
As many of you know, readers provide most of the intelligence on this site (“of two minds, yours and mine”). I am the student and skeptic who learns from you and tries to make sense of a few dynamics, and extend them to some sort of coherent end-state. We share the same project of encouraging critical thinking.
1. There is a rising loss of faith in the conventional (i.e. propaganda) account of the U.S. economy. Readers tell me their local coin store has no silver coinage left, as the public has been buying with a vengeance. This is significant. (Silver has long been called “the poor man’s gold.”)
In the conventional view, the “herd” always gets it wrong: the “retail” “small speculator” investing public buy stocks and real estate at the top just as the “smart money” is distributing/selling. This “dumb money” cycle is certainly evident in manias and bubbles.