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November 02, 2010

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Your prognostications sound about right to me except I am heading for a bottle of Merlot *s*

I'm getting set to pop the cork on a bottle of champagne.

But really I am not all that optimistic as rebublicans and democrats are two sides of the same malignant coin, milking dry the tit of a system doomed to failure:

The fiat money system is at last meeting its nemesis, spiralling into a self-destructive vortex from which there is now no escape. Prospects for gold and silver never looked better. This ignominious end to a despicable monetary system was its guaranteed fate from the outset when President Nixon signed away the gold standard, because the principal flawed characteristics of the fiat money system are indiscipline and profligacy, which is of course what makes it so attractive to politicians of either party. However, now that they have taken indiscipline and profligacy very close to their ultimate extremes, payback time is arriving. Faced with the stark choice between global depression caused by the massive debt overhang, and accelerated monetary easing, we can rely on politicians and business leaders to choose the latter course as this will buy them more time. That means currency wars and more QE (Quantitative Easing) , not just in the US but worldwide, as other countries are not going to stand idly by and watch the US trash the dollar to wiggle out of honoring its debts and gain a competitive advantage - they are going to get in on the game and do some easing of their own, and in fact they already are. We'll get the depression the politicians are trying so strenuously to avoid anyway via bailouts, etc., not because of deflation, but instead as a result of hyperinflation caused by the expanding money supply whose growth will become exponential as the race to patch the gaping financial wounds by creating ever more money becomes more and more frenzied.

I think we are now in the endgame (2012?), and the countless millions who don't understand what is going on, and believe the talk in the mainstream (lamestream) media about recovery and that somehow we are going to return to "the good old days" are going to be financially wiped out and end up as bloated fly-ridden corpses floating down the river (How's that for imagery? I think I'll pat myself on the back for that one.)

Pause... to bask in the glory of my erudition. OK, OK. It really wasn't that good.

Anyway, the perfect storm is bearing down us. While the whole world will be affected by it, the worst effects by far will be experienced by the overstretched debt-wracked countries such as Britain and the US, which are parasitic service economies with little manufacturing capacity that nurture the mistaken belief that the rest of the world will continue sending us cheap goods produced by real labor in exchange for electronically created worthless credits and IOU's including junk such as US Treasuries.

Cheers. Whatever you're drinking.

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