The current situation is basically global deleveraging....credit destruction. No intervention can stop it...intervention will just make the market mechanism of price discovery more prolonged and painful. Politically, leaders can’t be seen to sit there and do nothing...but there is nothing they can do to stop this. People have been predicting this for a long time. The same people have told us what the politicians and central banks would and what would happen when they did it. So far...everything has been spot on. The politicians and central bankers are behaving EXACTLY as Marc Faber said they would in his 2001 book “Tomorrows Gold...Asia’s age of Discovery”. Go and read it....you’d think he wrote it yesterday. Others like Peter Schiff, George Soros, Jim Rogers and Ron Paul have told us exactly the same thing...and been laughed at...there is really only one way for all this to work itself out...and it isn’t pretty.
The state buying banks in the UK is not capitalism. More accurately, it's called a corporatocracy. There is another, better known name for a corporatocracy....but it's too emotionally loaded. Political leaders now have their hands on the basic levers of industry...the retail financial system...all nice and legal. George Soros has openly been fighting this move....which he saw coming a long time ago and which he recognised from his youth in Hungary, through his open society foundation. Peter Schiff has been making a killing investing for this day. They have been laughing at him for years on CNBC. They aren’t laughing now. Ron Paul is fighting the move to a corporate state from congress with little effect. Jim Rogers, the billionaire co-founder of the Quantum fund, moved his young family to Asia so that he could enjoy greater civil liberties and economic freedom when all this is over. He has likened his move to a move to London in 1807 or a move to America in 1907. Its Asia’s turn for a century of economic domination, he thinks. Where does that leave us?
Basically, we will have to start making things again...and we will be competing directly with Asians for investment, wages and jobs. Out debt fuelled service economy is dead. It's now time to get back to work.
An Affiliate of Santander, Alliance & Leicester, FXGM, HSBC, ICICI, Lloyds TSB International, Natwest, One Account, Post Office, The Royal Bank of Scotland, Tesco
