"'Sell the S&P 500!' I recommended this on November 5, 2007. I actually recommended selling it short. Morgan Stanley [MS] did not know what hit it in 2008. ... I wonder what it must be like for a [MS] portfolio manager to call his clients, who have lost half the value of their recommended stock market portfolios since Ocotber 2007, and who followed his advice to buy more stocks all they way down--dollar cost averaging--to tell them that the company now recommends thay they sell the S&P 500. ... The G-20 meeting begins this week in England. Here, political leaders from 20 major nations meet to share ideas on how to solve an international financial crisis that their central banks created, following the lead of Alan Greenspan's FED. They never saw it coming. Not any of them--not the central bankers, not the politicians, not the regulators. They were all caught flat-footed. ... These press releases are designed to assure the investing public that they, the creators of this crisis, know what went wrong--they don't--and that by discussing the causes of the crisis, which they don't understand, they will be able to come up with a joint solution that does not involve either (1) mass inflation or (2) a worldwide depression that lasts for years. ... These people don't know what to do. If they did, there would be two or three well-defined, fully documented proposals out there, each with national co-sponsors. All of them would have major flaws. They would be mutually exclusive. Economists of various schools of opinion would be mobilizing behind one or another program. ... They refuse to adopt the only system that ever brought unity to governments and central banks:" an international gold coin standard. The politicians and central banks could not control the movements of gold out of inflating nations and into non-inflating nations, 1815-1914. ... They are trapped by the dollar standard. They have told their voters that their nations can get rich by exporting to the United States", Gary North, 1 April 2009 at: http://www.lewrockwell.com/north/north700.html.
I agree with North. How interesting. The Napoleonic Wars ended in 1815 and World War I began in 1914. Coincidence? I don't think so. Paper money facilitates war. MS says sell. I say buy, all except for financials.
4 comments:
IA... I'm interested in learning more about how "paper money" facilitates war...
It makes sense to me intuitively but I'd be curious to read some writings on the issue...
War is expensive.
No, more expensive than that.
And that doesn't count unseen costs of things which don't get discovered or producted due to the war.
Without printing money it's visibly too expensive and it will have major active opposition.
Of course, printing money has it's own
costs beyond the costs of the war (which are only hidden, not avoided).
Anon... thanks... exactly... inflation and war are twin sisters...
Anonymous:
The best explanation I have read about the connection between paper money and war is by Howard Katz. See my 5 October 2007 post: http://skepticaltexascpa.blogspot.com/2007/10/old-voice-still-speaks.html.
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