It is well worth your time to read the English translation at the above link because it contains so many truths that so few really understand. Let me recap a few, but please do read the article if you want to know the full story:
- The US and every other government of the world is bankrupt. They have avoided admitting it by papering over their losses. The two main deceptions are failure to mark toxic assets to fair market value on the books (they account for worthless assets as if they were worth full face value), and printing money from thin air. Mish assumes they will be able to slowly come clean over a period of perhaps 10 years. I am not so sure that people will agree to suffer that long.
- The papering over has caused stocks and junk bonds to rise to unnatural valuations. You really can't trust the numbers anymore because everyone is allowed to legally lie about their balance sheets. The stock market is trading as if Bernanke is actually creating new value with his policies when in fact he is creating the illusion that real losses did not happen and do not still exist even though the losses are very real.
- Mish expects the European Union to shrink. The weaker players cannot keep up the charade of solvency and thus are nothing but a drag on those who havent been exposed as frauds yet. Mish fails to point out that when the weaker ones leave it means they will never repay their Euro denominated loans. It also means that Germany and France will not be able to export as many goods to them because the credit of those kicked out or who leave the EU will be ruined. In other words, Germany and France have fake, credit juiced economies just like everyone else which will be exposed if the EU begins to shed members.
- The Chinese economy is a massive debt based Ponzi scheme with stupidly excessive manufacturing capacity and stupidly excessive construction of cities to nowhere (cities for 1 million + people that stand empty because the locals cannot afford to move there, all built on credit..). When China crashes it will take down Australia which is a commodity exporter. Mish doesn't mention it but Canada, as a commodity exporting nation, is in the same boat as Australia. All of them have huge real estate bubbles that are worse than what the US' was/is per capita.
- Don't trust governments or central banks. The list of lies they have told is sky high and some of them were real whoppers. They are in such dire straits that they are now making laws up as they go along (or acting in violation of existing laws) to handle whatever the problem de jour is. None of it is well thought through because they are in crisis mode trying to save their crony capitalism system. It is causing unintended consequences which is resulting in reduced trust of government and associated civil unrest.
- The root cause of ALL these problems is fiat currency and fractional reserve banking which are the dynamic duo of a dishonest money supply. The money elite game this system in order to enrich themselves faaaaar beyond what they could have achieved by working for it like the rest of us. This is why they will do anything that we are stupid enough to allow them to do in order to save it. We would all be much better off going to an honest money supply which would include an audited gold standard and the elimination of fractional reserve banking. Between fiat currency and fractional reserve lending, the latter is by far the bigger culprit. It leads to credit booms and busts that cost people stability in their lives. It leads people to give up hope and to engage in civil unrest. It happens right under our noses because so few people understand the con game that is being played on us. Everyone wants to treat the symptoms with more regulations while the root cause is never addressed.
