Desperate Troubles Ahead-Black Swans and Bank Leverage
by Gary North
The black swan is the foo bird of modern Keynesianism. It is a threat only because of central bank fiat money and commercial bank leverage.
In a recent report, “China: What Rhymes with ‘Crash’?” I wrote this:
China is not an accident waiting to happen. It is a government-engineered disaster waiting to happen. It is not threatened by a black swan event. It is threatened by the Austrian theory of the business cycle.
We hear far too much these days about black swan events. Taleb’s book, timed well in 2007, has turned the phrase into a catch phrase. Here is a summary from Wikipedia.
The event is a surprise (to the observer).
The event has a major impact.
After the fact, the event is rationalized by hindsight, as if it had been expected.