Are we all wealthier because the Dow is at ~ 15,000? Should Katee Sackhoff be the next Fed Chairman?
Listening to our friends in the financial media, one is tempted to think that skillful investors are somehow able to dodge the flaming asteroids of inflation as they fall to earth. See the last few minutes of the latest David Twohy film “Riddick” starring Vin Diesel for the visuals.
The idea of an object falling from space as a metaphor for inflation may surprise some readers of Zero Hedge, but our friend Marc Faber likes to remind us there are many ways to lose money -- or really wealth -- from inflation. Chief among them are asset bubbles instigated by the monetary emissions of reckless central bankers who pretend, at least, to believe that they can solve problems like unemployment by merely debasing our beloved fiat currency.
The whole notion of value and wealth in a fiat monetary system is relative, especially following a major catastrophe such as the Second World War. The history of the US of course paints the WWII period as a victory for democracy, but the fact is that the disruption and dislocation caused by that conflict and the subsequent surge in population we loving refer to as the baby boom is still being felt. My friend and mentor Alex Pollock, Resident Scholar at American Enterprise Institute, puts it nicely in a draft essay entitled appropriately “Wealth” and Illusion ...