Crying Wolf

…be very afraid.

It is East Europe that is blowing up right now. Erik Berglof, EBRD’s chief economist, told me the region may need €400bn in help to cover loans and prop up the credit system.

The sums needed are beyond the limits of the IMF, which has already bailed out Hungary, Ukraine, Latvia, Belarus, Iceland, and Pakistan – and Turkey next – and is fast exhausting its own $200bn (€155bn) reserve. We are nearing the point where the IMF may have to print money for the world, using arcane powers to issue Special Drawing Rights.

Mr. Evans-Pritchard has been right an awful lot of the time recently. If he’s right this time… we’ve got problems. If you feel like staring into the middle distance with an empty feeling in the pit of your stomach for a few minutes…

Last week it was Reinhardt. I didn’t really understand what to expect, but despite the Dow Jones having it’s worst week in three months, there wasn’t really a catastrophic collapse in the markets, Synthetic CDO didn’t default, and the dollar didn’t collapse. Therefore i can only conclude that his prediction was incorrect, or i (and many others) didn’t really understand it.

Reinhardt, for what it’s worth, is claiming victory (based on the fall in the Dow) which is either a great piece of revisionist history, or one of the virtues of giving (public) predictions that are so vague as to be useless. Perhaps he’s the real deal, but he’s making it very difficult to take him seriously…

Events are moving rapidly now. It used to take several months for the effects of bailouts / interventions to fade away. Now national governments are just stumbling (like a japanese finance minister on a bender) from one disaster to the next. How much of this stress can the systems withstand? The rules (accounting and otherwise) have been bent to such an extent that it’s hard to know what is real anymore.

Recently i’ve been thinking that i’ve mistimed my run. By this point it would be better to be partially self-sufficient, or at least owning some land. Money in the bank isn’t much good if it’s being debased by the likes of the IMF / World Bank. Terrible feeling that the rules are going to change radically and unpredictably in the near future…

Can you tell that i’m struggling to maintain a sunny disposition?

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3 thoughts on “Crying Wolf

  1. Pingback: Crying Wolf « It’ll All End In Tears | arcadegreats.com

  2. suddenly my total lack of savings or pension plan doesn’t seem like such a f&*k up after all, Its not like it will be worth the paper its printed on anyway.
    Now where do I sign up for that organic agriculture course and can any one get me a gun to protect my little patch from marauding hungry people??

  3. pension plans have always seemed fucked up to me. just as soon as not paying into one became an option, that’s exactly what i did 🙂 my guess has always been that private pension funds will be robbed out by bond holders, and government ones would never be enough to live on when i came down to it.

    we went out to yamanashi and checked out the whole 自然農 scene. i think it’s survivable on japanese soil (volcanic, and therefore very fertile…) just need to get out of tokyo and get some land…

Wise words...

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