Economy and General Discussion

Whether this is the sea change or not, it seems clear to me that all of this is way, way too late.  The inflation has done its work now. Prices have been distorted in bizarre ways all across the economy -- turning just about everybody into financial speculators and transfering countless billions of dollars from ordinary folks to the vultures in the banking industry and on Wall Street. The parallels with previous manias are there for all to see, but it seems relatively few have their eyes open to that insight.

It's too late now for responsible behavior to have a significantly beneficial impact on the outcome. Better sooner than later, for sure, but the damage has been done. If only the government, and the Fed, would now get out of the way and let relatively free markets sort out this mess. If our economy's price structure were allowed to reflect demand based on actual income, instead of rapidly rising debt and money creation, we would see people and economic resources reallocated to their best uses within a few years. It would be painful for many people, but it will be even worse with the Fed and the government attempting to manage the economy and control prices. And, of course, we should really say governments (plural), because we are likely to see a period with global or at least international dislocations that must be sorted out before the global economy is again ready for healthy growth.

Tom