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Author: jgc123 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 454837  
Subject: Re: Catastrophe theory, instability, risk Date: 10/10/2012 9:35 AM
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Wendy: "Stock investors are greedily following the trend to ever-higher valuations, reminiscent of the familiar bubbles of the past 15 years, as if the real economy was actually growing fast enough to justify the share price growth."

Yoda:

"a) Ben Bernanke has widely talked about the importance of positive feedback. Strong and rising equity markets mean more spending and job creation in their mind....

"c) There is near universal agreement that confidence plays a major part in economic growth.....

OK....

Let's pretend that our entire national economy has turned into a confidence scheme on a gigantic scale. Just like Bernie Madoff who started out with a legitimate investment company, started spending more than he was bringing in, paid for it by bringing in more and bigger customers, eventually bringing in billions and losing it, so go we as a nation.

We started out with taxes roughly covering expenses, started spending more than we we brought in and paying for it all with a series of bubbles all bursting one after the other (our version of more and bigger customers to dupe) followed by more and bigger customers in the form of Infinite QE.....

Bernie kept it going for decades.

How long can we?

Do I care whether it will produce massive deflation vs. worthless money if I come to the point that I do not trust the system either way? Is it not possible that both outcomes will force me, the collective consumer, to try to gather up assets like land or gardens or gold or silver or copper or ...?
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