Give Collapse a Chance
by Bill Bonner
A big sell-off yesterday. The Dow down 283 points. The 10-year T-note yields only 1.87%. And the price of gold barely budged.
In our opinion all three should be going down. Because the world is edging towards a global depression…
…with the US consumer unable to spend…
…the Chinese economy slowing down…
…and Europe preparing for defaults…
Assets should be going down. Except for US Treasury debt…which should be going up. That’s what happens in a depression.
All of which is making our “solution” to the financial pile up of ’08-’09 look better and better all the time. You’ll recall that we promised to tell you how you could fix the problem in our last exciting installment. This must have left you on the edge of your chair. It sure left us on the edge of our chair; we had to think of a solution overnight!
But it is really very simple: give collapse a chance.
Remember how desperate officialdom was to “prevent a catastrophic collapse?” Both in Europe and America. The European banks bailed out their speculators. Then the governments bailed out their banks. Then, they bailed out the countries that had bailed out their banks.
In America, the government bailed out the banks…the insurance companies…the automakers… About the only industry that wasn’t bailed out was the financial publishing industry. Guess we didn’t send them enough campaign contributions…
Then, the Europeans and the Americans bailed out each other.
And they’re still bailing. The US is running a budget deficit so large that we’ve lost track of it…was it $1.5 trillion? $1.8 trillion?
And the Europeans are preparing another big bailout for Greece…Italy…and who knows who else.
And every bailout makes the world poorer. Because it’s clearly bad money after good. Greece does not suddenly become a good credit risk just because you lend it more money. And Americans won’t be made richer because the feds offer them more debt at an even cheaper rate!