No one really knows when and how the financial system will crash. But I suspect it will be soon. If you look around you, you will see a lot of signs that those on top are preparing for a crash. The most interesting indicator, in my opinion, is their behavior. Everyone is stealing. They are getting everything they can while they can. The law has become a sad joke. Everywhere on the globe, the laws only punishes people from my social class and below. Our main problem was that we did not steal in sums large enough to escape justice or we don't think up devious enough ways to steal. We have been too busy trying to feed ourselves to come up with fresh new variations of pyramid schemes and scams. Slowly but surely due to the amnesty given to the tyrant criminals at the top, bad behavior has been working it's way down the class structure. Who can blame us? When everyone else is a dishonest criminal, and you act in good faith, you end up the poorest of all. There are a few glaring problems with the democratization of fraud and theft. One is that when no one respects the law, there is chaos; and it is very hard to do business in a chaotic environment. No one trusts anyone. There is no objective source of information. Economic growth becomes very stunted. No one knows the real value of assets anymore. And I think at some point, the house of cards falls....the only question is when.
Will the stock market crash today, tomorrow , next year? I don't know, and I don't care. In all statistical probability neither should you. We will have to be more concerned with the markets for real goods and labor that everyday people deal with. Unfortunately, the price of goods has fallen prey to the manipulation of people who trade in commodities, or in financial newspeak made to accomodate the idea of equities indexes and other hyperfinancial products that never should have been commodities, futures/options. And the price of labor...what a mess. At this point some people are effectively paying to work. In South Africa I was shocked to see bars crowd at 6 pm. The deal about happy hour is still on there thanks to a bizarre confluence of disparate interests from those of black trade unionists to wealthy whites annoyed that they have to work at all. In the past if you were an office worker in the USA, you got happy hour too. After eight hours of mind numbing, soul killing boredom, you got an hour of fun for you before you headed home to manage your family. American employers ate all of that...not only is there no happy hour, there will be no managing your family either. Note how many prominent employers are adding egg freezing to their benefits in a misguided manipulation of their female employees. But it isn't only the office ladies who lost the hope of family. There are many other silent deals that have been cancelled. In the past female doctors were allowed to take home abandoned babies. Trying that today will land you in jail. What has emerged in place of the old silent deals about work is a culture of serfs and lords. Employers are downright abusive because there are so many unemployed people desperate for a job that they will make you do anything they dream up just to hang on to yours. If you won't take a 2% pay cut while management gives themselves bonuses, someone else will. Next time it will be a 5% cut, and a 5% increase in your hours. But how far can this go before people start fighting back? We may find out. A political upheaval is as likely as a financial one. People who think a working class intifada is an impossibility in the US would do well to go to a totally economically depressed area; and note the levels of violence. The only real question is whether a political upheaval or financial upheaval will come first. And the rich know it. So no one should be surprised if the art markets and antiquities markets are doing well. The rich are busy burying as many precious real goods and bars of gold as they can, and waiting to see what will happen. In doing so they will invariably distort a few markets. I write this not as investment advice, but as a warning. Normal people now understand they have no hope of getting ahead, or even getting by, by working for other people. I only hope they will not clamor onto the sinking ship of financial product ownership in an attempt to reach salvation...because it looks like that boat sooner or later may be going down too. Copper is down. Which tells you people are not putting buildings up. Not here, and not in China. If investors flee to bonds you can expect dismal returns that won't beat inflation. Ah well...Soon we may all be trying to figure out how to grow some food out of that would have been built on land anyways...
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