Despite all the confident clatter of politics and politician saying that they will cure all by doing things do not seem to be getting a lot better and we are all uncertain. Change is all about us yet most of us cannot see it, let alone understand or explain it.
The Cobden Centre has had a run of articles, some long and complex attempting to analyse what is going on and why, but all have questions behind them, but with one common theme. That is that the financial and economic world is a more dangerous place.
This particular article by Keith Weiner is short to the point of being terse. He seeks to explain simply what he understands as being one of the critical features in the world at the moment. Quite simply falling yields and rising asset prices don't go together and mean long term trouble.
If you want some longer takes on other related issues in the last few days there are one or two there which may be worth the time. One way or another the future is becoming more opaque and that in itself is a prime cause of difficulty and danger.
It's as if investing has been supplanted by extracting. Those on the inside extract, the rest of us are left with peanuts.ReplyDelete
Weiner is right. And the problem lies - as usual - with the Leviathan State and its endless unfulfillable promises. It must have cash, ever more cash, all the time and always, to pay its clients and the millions of useless pen-pushers we now "employ".ReplyDelete
For a while the cash could be borrowed; now it cannot, so they start to confiscate peoples' capital and spend that. It's done stealthily at first (by inflation and zirp, as Weiner says), but increasingly it's more open and direct - what does anyone think a "Mansion Tax" is supposed to be, other than a way to convert capital into revenue and spend it?
The system is indeed broken, and doomed; but it will take all of us down with it when it finally fails.