A Series of Unfortunate Events

Three must-see interviews with Kyle Bass. Bass tells us why the European economic union must default and will not survive, among other things.

The other two are on Business News Network, but cannot be embedded. You'll have to watch them on BNN.com, and you should do so.

Betting on a Collapse, Part 1

Betting on a Collapse, Part 2

The United States of America is in debt up to its neck. And it's looking like we'll have another round of 'quantitative easing' as the Fed pumps even more money into the economy in an attempt to 'stimulate' and get the motor running again.

Some say that we've got to suffer through a significant de-leveraging, deflating the economy to unwind the thirty-plus years of inflationary debt creation. Demographic trends may make this inevitable, as an aging, debt-ridden population down-sizes, selling off assets and tries to cash in on its illusory wealth.

Some are betting on inflation, because there's just no way they can see the Fed allowing any significant deflation to occur.

Between the two extremes: long-term stagnation. Slow or slightly negative economic growth, with falling real wages but no major changes in prices either way.

I expect continued inflation, because I just can't see any change in the desire to use inflation to extract us from the mess we're in. The temptation is too great. The problem is that it will take massive monetary inflation to stimulate growth, which is part of the problem we see now: the 'stimulus' isn't stimulating anything. No jobs are being 'created'. The economy is stalled. Home values continue to drop.

People aren't going deeper into debt, and without new jobs, higher personal income, new debt creation and consumption, our debt-based economy won't function.

Does anyone out there really expect that helicopter Ben and the Fed will do anything but flood the economy with new 'money' (debt) to try and prevent a deflationary crash?

Are there examples of modern central banks presiding over long-term deflationary corrections? Japan comes to mind.

I don't expect the Keynesian monetary policy advocates (the ones who brought us to our present predicament) to stand idly by while asset values drop. When their only tool is monetary easing, what do you expect them to do?

This narrative of a trip to the Soviet Union circa 1982 seems eerily prescient.

When we reached the Finnish-Soviet border, the train groaned to a halt and a half dozen Soviet military thugs clamored on board and began checking everyone's papers. Their modus operandi was almost comical as they threw open doors, slammed them shut, ordered us to "stand!" or "sit!" and vigorously searched our luggage, all the while eyeing us suspiciously as though the next suitcase they opened would contain arms and ammunition or, worse, a copy of The Russians.

Our security obsession seems to be leading us to a time when we can expect to have grim-faced security agents barking orders at us while we attempt to exercise our rights to unfettered travel.

There are more gems in the narrative, go read it and decide if we're slouching towards a similar fate.

Caught this the other night. The movie was funny enough to keep me watching. What really got me was the closing credits:

The credits open with a graphic description of a Ponzi scheme and other goodies from our recent financial meltdown. The cracks are growing...