The Five ‘D’s of a Sick Monetary System
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Capital & Crisis editor Chris Mayer recently attended the inaugural meeting of the Society for Austrian Economic Thought. At the meeting Chris picked up on what Dr. Andre Homberg, the organizer of the event, laid it out as the five ‘D’s of a sick monetary system…
- Delusions - the notion that “the welfare state can provide everyone with a free lunch and a reliable pension and health care”
- Deficits and Debts - the accumulation of enormous fiscal imbalances, particularly in the public sector
- Dollars - the debasement of the dollar and reckless credit expansion
- Derivatives - Dr. Homberg pointed out that the notional value of derivatives topped $1,000 trillion, as per a recent IBS report. “This excessive leverage could implode anytime and make the U.S. subprime debacle look like a day at the beach,” he said.
The end result of all this?
According to Dr. Homberg: “The prices of everything that you must have will escalate at a speed that you will not believe. The prices of energy and fuel will continue to spiral higher. Food and water prices will accelerate upward and will result in a lower standard of living for yourself, your family and your loved ones.”
PS: This was taken from a recent issue of Capital & Crisis. To read more of Chris’s expert analysis, click here.
Source: The Inovator, the Imitator and the Idiot
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Tags: Chris Mayer, Us Inflation Rate, US recession, US stocksAbout the Author
Chris Mayer is the editor of Capital and Crisis and Mayer's Special Situations. His contrarian essays have appeared on a number of websites and publications including the Mises Institute, the Freeman, GoldEagle.com, LewRockwell.com, FiendBear.com, PrudentBear.com and Individual Investor Magazine.
The Daily Reckoning offers a "uniquely refreshing" perspective on the global economy, investing and the ability to live well in uncertain times. You will learn what you can expect from today's markets and how to prosper in the face of uncertainty.