 | | The Daily Reckoning | Thursday, July 26, 2012 |
- Society may be crumbling, but “ain’t we got fun”?
- Addressing the “bubble question” regarding US and Canadian farmland...
- Plus, Bill Bonner on optimists, pessimists and the end of civilization...
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What to Expect in 2013...
Between 2004-2007, Bill Bonner and Addison Wiggin did their best to alert their loyal readers to the dangers of the housing bubble well before the mainstream said anything about it.
Well, today, they see something even worse looming just over the horizon.
It’s not often our Reckoner-in-Chief agrees to appear on-screen, but this was just too important.
Click here (or the image below) to see what they’re talking about now...
|  | | | | How Ben Bernanke Can Prevent the End of Civilization | | |  | | Bill Bonner |
Checking in today from the Agora Financial Investment Symposium in Vancouver, Canada...
Ain’t we got fun?
Ev’ry morning, ev’ry evening
Ain’t we got fun?
Not much money, Oh, but honey
Ain’t we got fun?
The rent’s unpaid dear
We haven’t a bus
But smiles were made dear
For people like us
In the winter in the Summer
Don’t we have fun
Times are bum and getting bummer
Still we have fun
There’s nothing surer
The rich get rich and the poor get children
In the meantime, in between time
Ain’t we got fun?
— Whiting, Kahn, Egan...1921
The Dow up 58 yesterday...nothing important there.
Gold up $31. Hmmm...what does the gold market see? More QE?
Last week, it was the IMF. It urged the Europeans to increase their money-printing efforts to avoid deflation. This week, the Financial Times tells Ben Bernanke to get off his cushy derriere and take bold, decisive action in the fight against the Great Correction.
Sebastian Mallaby, writing in the FT, says Bernanke is acting like a wimp. He needs to come up with some new weapons, new strategies, and new tactics. C’mon Ben, “show some real audacity.”
Ben Bernanke, hero of ’08, will not want to see himself stripped of his medals. He will not sit on his hands and watch as the US follows Japan down that long, lonely road towards stagnation. He will not want his resume blemished by a splotch of failure just when he faced his greatest challenge.
No, dear reader, he will ‘do something!’ — no matter how dimwitted it may be.
And here’s a BBC sage reminding Ben Bernanke what the greatest economist of the 20th would have done. “What would Keynes do?” he asks.
Of course, the answer is obvious to anyone who ever thought much about Keynes. He would have done just the wrong thing!
But that’s not the way John Gray sees it:
...The influential Cambridge economist has figured prominently in the anxious debates that have gone on since the crash of 2007-2008. For most of those invoking his name, he was a kind of social engineer, who urged using the power of government to lift the economy out of the devastating depression of the 30s. That is how Keynes’s disciples view him today. The fashionable cult of austerity, they warn, has forgotten Keynes’s most important insight — slashing government spending when credit is scarce only plunges the economy into deeper recession. |
Even Richard Duncan urges the Fed to action. Duncan is unusual, though. He sees the problem clearly...which is to say, he sees it like we do. Here, CNBC reports on an interview:
“When we broke the link between money and gold, this removed all constraints on credit creation. This explosion of credit created the world we live in, but it now seems that credit cannot expand any further because the private sector is incapable of repaying the debt it has already, and if credit begins to contract, there’s a very real danger that we will collapse into a new Great Depression,” he [Duncan] argued.
“If this credit bubble pops, the depression could be so severe that I don’t think our civilization could survive it.”
Duncan argues that governments in the developed world should borrow “massive” amounts of money at the current low interest rates to invest in new technologies like renewable energy and genetic engineering. |
What could he be thinking? Of course the money would be wasted. That’s what government does. It borrows money from people who have proven they know how to make money and gives it to people who have proven only that they know how to take it.
One will offer to build a bridge to nowhere. Another will propose to assassinate a foreigner. Millions will put out their hands for retirement/health/unemployment and other forms of assistance.
And what will happen to the money? It will be gone...with only more debt...like “dead soldiers” left on the table after a party...to show for it.
Still, Duncan thinks that even if the money goes down a rathole, it still might make sense:
“Even if this is wasted, at least we could enjoy this civilization for another ten years before it collapses,” he said. |
That’s what separates a real pessimist from us optimists. It would be nice to see what Mr. Market would do. Left to do his work, he’d surely separate many of the rich from their money...he’d blow the doors of the banks...and flatten hundreds of corporations. He’d put a swift end to this Great Correction...and then we could get back to work.
But he wouldn’t wipe out our whole civilization! You have to be a genuine pessimist...to believe the correction will be fatal to our civilization.
Who knows? Maybe Richard Duncan is right. We’re all going to die anyway. In the meantime, and in between time, ain’t we got fun!
Regards,
Bill Bonner
for The Daily Reckoning
[Ed. Note: Bill’s annual speech at the Agora Financial Investment Symposium is always one of the highlights of the week. And his presentation this year — on the theme of “The Declining Marginal Utility of Stuff” — will likely prove no different. It’s truly something every loyal DR reader should witness. So, if you were unable to make it to the symposium this year but would still like to check it out, we invite you to click hereand pick up a copy for yourself. And this year we’ve included, for the first time ever, HD video of the entire event. So click here now to secure yours today. But hurry... The price shoots up at least 33% as soon as the event is over.]
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That’s the pressing theme of the ongoing Agora Financial Investment Symposium. If you couldn’t join us in beautiful Vancouver, here’s the next best thing...
Like years past, we’re recording the entire line-up of presentations, lively debates, heated discussions... and financial ideas to help guide your wealth. But this year we’re going a step further...
For the first time in the 13-year history of the Symposium, you will also be able to SEE all of the presentations, in stunning HD Video!
So even if you weren’t able to join us at this year’s event, you don’t have to miss out on a single piece of analysis or recommendation.
See this short report for details (don’t worry, this isn’t a long video sales letter.) But hurry, once the conference ends, the price of the recordings rockets up 33%.
Claim all the ideas at the lowest possible price, right here.
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| | The Daily Reckoning Presents | | Is Farmland in Bubble? | | | When the mainstream media starts touting “dirt” as the new “black gold”, does that mean farmland is in a bubble? In today’s “video essay”, Capital Account’s Lauren Lyster poses that very question to Brad Farquhar, manager Co-Founder of Assiniboia Capital — the largest farmland fund in Canada. Take a look below...
Editor’s Note: The production team over at RT will actually be here in Vancouver all week covering this year’s Symposium. Each day on Capital Account, Lauren Lyster will interview a different presenter from the event. To check out these interviews live, just go to the RT site, click the red “Live” button at the top of the page, then click “RT America On Air”.
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Here at The Daily Reckoning, we value your questions and comments. If you would like to send us a few thoughts of your own, please address them to your managing editor at joel@dailyreckoning.com
| | | | | Only 62 People Know Exactly Why These Four Companies Could Change the World |
Now you’re #63 “on the inside” — and you’re on the verge of raking in lasting wealth.
This could go down in history as he story of our era.
Click here for all the details.
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