Gyroscopic Investing

Allan Sloan at Fortune lays out the reasons for the "cascade of badness" after Lehman failed in 2008 in very simple, straightforward language.  I've never heard it explained this way before - it was always "Lehman failed, and then the world financial system melted down.  QED."  And it's all just waiting to happen again:

http://money.cnn.com/2013/08/29/news/ec ... ?iid=HP_LN

I wonder if this guy invests in the PP :-).  Incidentally, there is also a nice reminder about why we prefer to sock much of our cash in Treasury bills rather than savings accounts.

WiseOne wrote: Allan Sloan at Fortune lays out the reasons for the "cascade of badness" after Lehman failed in 2008 in very simple, straightforward language.  I've never heard it explained this way before - it was always "Lehman failed, and then the world financial system melted down.  QED."  And it's all just waiting to happen again:

http://money.cnn.com/2013/08/29/news/ec ... ?iid=HP_LN

I wonder if this guy invests in the PP :-).  Incidentally, there is also a nice reminder about why we prefer to sock much of our cash in Treasury bills rather than savings accounts.

There is no way to prevent the collapse after an inflationary boom. It can be delayed for some unknown amount of time, but the more it is delayed, the worse the resulting collapse will be.

In my opinion, this one is going to be catastrophic.

Libertarian666 wrote:

WiseOne wrote: Allan Sloan at Fortune lays out the reasons for the "cascade of badness" after Lehman failed in 2008 in very simple, straightforward language.  I've never heard it explained this way before - it was always "Lehman failed, and then the world financial system melted down.  QED."  And it's all just waiting to happen again:

http://money.cnn.com/2013/08/29/news/ec ... ?iid=HP_LN

I wonder if this guy invests in the PP :-).  Incidentally, there is also a nice reminder about why we prefer to sock much of our cash in Treasury bills rather than savings accounts.

There is no way to prevent the collapse after an inflationary boom. It can be delayed for some unknown amount of time, but the more it is delayed, the worse the resulting collapse will be.

In my opinion, this one is going to be catastrophic.

The economy can always grow, until it can't, but that's a real constraint, not a product of a fiat currency having no intrinsic value.  If the sun explodes, or our oil runs out, or whatever happens that makes real growth impossible, that's a constraint that would have manifested itself under a gold standard as well.... unless you're advocating far slower economic growth, which is potentially desireable in some ways, but let's be clear that this is what we're talking about, because I don't think most libertarian/Austrians try to advertise too loudly that they are advocating a very low-consumption, environmentally sustainable, slow-growth economy.

moda0306 wrote: because I don't think most libertarian/Austrians try to advertise too loudly that they are advocating a very low-consumption, environmentally sustainable, slow-growth economy.

This is something that Doodle would probably find highly palatable. So ironically perhaps he will come full circle! 

I won't argue that unlimited growth is definitely possible in our world without some huge leaps in technology, but, at worst all that happens is the economy plateaus and the currency loses some value.  Hyperinflation (where currency is worthless) doesn't logically follow a sustained economic GDP model.  It would just steadily lose value over time.

If you adjust for risk-free interest rate paid to bond holders, savers haven't really even suffered all that much.  They made out like bandits during the 1980-2000 stretch.