What We Learned over Dinner from a Swiss Central Banker
Dear Diary,
Today… what we learned over dinner from a surprisingly smart central banker.
But first, to the markets…
The Dow shot up 121 Dow points yesterday, recovering most of Tuesday’s slide.
In a series of business meetings Tuesday and Wednesday, we explained why nobody but us is rooting for a depression.
Yes, there’s no point in hiding it. We would like to see a depression. Short, swift, and decisive – a quick and sharp end to the biggest credit expansion in all of history.
As secretary of the Treasury Andrew Mellon said after the 1929 stock market crash:
Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.
Credit Cannot Increase Forever
“It’s unbelievable,” said colleague Merryn Somerset Webb. Merryn is the editor ofMoneyWeek magazine in London.
“London property prices just keep going up and up. It’s so expensive our writers can’t afford to live here anymore. I’m thinking of moving the business to Edinburgh.”
You can’t build a solid economy on the jelly of unaffordable housing, unpayable debts, and unsustainable asset prices. But that’s what we’ve got.
The only way to get down to something more reliable… more real… and healthier… is to wash away the financial glop and goo that has accumulated during the last 30 years.
…click on the above link to read the rest of the article…
