I return!

I'm back from my wanderings with longer arms and a nasty cold. I am a little bit out of touch but I am pleased to see that the immediacy of the crisis has reduced just a little. I'm not sure that there is anything very useful being put forward right now, other than 'Son of Bretton Woods', which is inevitable. Another news item is worthy of comment ---

- WASHINGTON (AP) -- With defaults on credit card debt spiraling amid a global financial downturn, banks already reeling from the mortgage crisis are losing billions more from unpaid credit card bills.
Big banks have formed an unusual alliance with consumer advocates to urge the government to allow huge portions of credit card debt to be forgiven, a turnabout from recent years when the banking industry lobbied strenuously to make it harder for consumers to erase their credit card debts in bankruptcy.


This is a quite outrageous suggestion in that it forces those who are not in debt to repay the debts of those who are in debt! Quite apart from being outrageous, it is the opening gambit to start the whole spending merry-go-round off again. I don't see how it can happen as governments are only the source of fiat currency, not wealth. If they issue more fiat currency to repay these debts and in the process generate new debt, then the currency will be devalued - it is inflationary. There continues to be debate among economists whether we are headed to a long period of deflation, as in Japan, or hyper-stagflation along the lines of Wiemar. The latter would destroy the paper wealth of most private individuals. My own view continues to be that as soon as the present flood of USD is freed up and flows into the financial system, we will see inflation race away out of control.

Gold seems to have found a floor and it looks as though these levels are a good buying opportunity. I would urge gold buyers to buy and take delivery of their own physical. Don't use ETFs, buying clubs and pools or even so-called allocated gold. At this time, you need to be able to have it in your own hands.

In writing a blog and other comments I wonder to what extent I could be open to defamation action. Suppose I say "Bloggs Bank seems to be representing itself as something that it is not and some of its investment schemes look dodgy". I am likely to get a stern threat of legal action. Suppose I say "Bloggs Bank does not overly impress me and I suggest that you meet the Directors before investing your money in them" seems safe, I suppose, but does it convey what was intended? It's all very difficult but there are quite rightly means of redress available when a party has had its reputation harmed due to unfounded allegations. As another example, suppose you observe that a car has no road licence disc, there is no certainty that the tax is unpaid; the disc could have been stolen, for example, and a duplicate awaited. Would it be fair to suggest that there might be safety issues given that IF the car has no disc, it MIGHT not have passed its annual test (which is a requirement before a new disc is issued). But this would only be an inference even if you could actually see safety issues on the vehicle, such as poor lights, tyres, wiper blades unless you are deemed by the law to be sufficiently expert. All very complicated; best not to judge anyone, I suppose?