April 14, 2016

July 8, 2012

Be Certain About This:
One of the few things that we do know – for certain – about the future is that actions have consequences. In the world studied by the physical sciences of inanimate matter, it is possible to predict the future with certainty. That is because the entities being studied ARE inanimate. They have no power to initiate an action so they have no power to vary their reaction to a force which is applied to them. In the field of the study of HUMAN action, the situation is fundamentally different. No “stimulus” will ever produce the same response on entities which have the power of thought and the power of choice.

What the study of HUMAN action can tell us with certainty is that a given action will produce a given consequence. The timing of that consequence and its severity cannot be determined. All that can be known is if that a government has the exclusive power to determine what is used as money and if it uses that power to produce ever increasing quantities of it out of thin air, the days of its functioning as money are numbered. It has been well said that: “There have always been only two kinds of paper money in the world. Those which are already worthless and those which are going to be.”

The fascinating part of our present situation is that almost everyone who has ever taken the faintest interest in the history of economies and money knows this to be a fact. The tragic part is that most of them still maintain that the fact that there is no historical instance in which a manipulated money did NOT collapse does not mean that the same fate awaits the manipulated money of the present. The reaction of the market is still more tragic. They are running for “safety” to the most manipulated monetary paper of all – the sovereign debt of governments.

©2012 – The Privateer market letter