We see currencies, countries and institutions that
should have failed by now being supported by the unlimited printing of money.
Budgets and debt ceilings are passé. Crises come and go. Fiscal cliffs, debt
ceilings and the like come to the fore. Nothing is ever resolved, but deadlines
are moved and new plans for resolution are just around the corner.
While the central bankers might see themselves as
Blue Angel equivalents, the reality is that they are engaged in precision
balloon acrobatics. That image might trigger a smile, and even thought we know
that balloons cannot be flown with any precision, it still represents an
appropriate analogy. The balloons do rise, but chaotically. The hot air that
fills the balloons is the electronic printing press.
The precision monetary team is floating countries,
companies and markets. There are a few balloons such as the gold, silver and
oil markets that tag along, much to their dismay. Releasing hot air from those
balloons is considered a necessity to keep all eyes focused on the “right”
balloons. Gold and silver balloons tend to rise at a much faster rate under
these circumstances throughout history, so great effort must be made to tether
them as best is possible..
Nobody knows how high the central bank driven
balloons can go. The supply of hot air once appeared to be limitless. Perhaps
it is. At some altitude, however, a vessel under pressure will pop in the
absence of the counter force of atmospheric pressure. To the central bankers,
they are floating us skyward to a new reality. It is more likely that our fate
will be the black emptiness of outer space or a quick return to earth as the
balloons pop. Only time will tell..."
No comments:
Post a Comment