This is a snapshot of my "Lehman Bros." archive, which I pulled out of the files, just to image this. We hope EverGrande does not cause this ugly level contagion, and our view is that it will not. Lehman was linked to everybody, and they were hard-core liars. Their balance-sheet seriously misrepresented the financial condition of the Lehman Brothers enterprise.
Dec. 16, 2021 - Maybe Next Year? - The USA Federal Reserve has decided not to raise it's short-term interest rate, and has kicked the can down the road to middle of next year. Rates are to be kept at essentially zero, and a runaway
inflation and asset-bubble will be both sustained and inflated further. This is madness, but it is being reflected in the unwise policy choices of most western-world governments. In Canada, the Central Bank has been given explicit instructions
to focus on job-creation and reduce it's traditional "prevent inflation" role. This is profoundly unwise.
By next year, the inflation-process will be firmly implanted in the public's economic mindset, and we risk an ugly repeat of the economic
collapse-events that characterized the negative-growth, high-inflation 1970's, a time in which it took 20%+ interest rates (in 1980), to damp-down the runaway inflation which had rapidly developed.
Our governments are run by liars and fools, and we
shall face an ugly reckoning because of this, within the next two years, our research suggests.
Nov. 25, 2021 - Bubble Up - We are in the Mother of All Bubbles, I suspect. There are few simiiar conditions in history - one has
to look at the Spanish inflation that resulted from the shiploads of looted gold that the New World excercises in plundering offered the Spanish monarchs, or the Weimar Germany inflation of the 1920 to 1923 period. Accurate data on both time
periods is difficult to acquire. To say we are worried about this, would be an understatement.
This will go down in history, as the time of no sleeping, I suspect. It is almost certain that this Covid virus was lab-created, and it's
release, an ugly accident, involving mice which roamed between the Wuhan labs and the live-animal market.
We got our influenza vaccine shots a few days ago, and I was fine for days after - but I visited a Mall, and the Apple Store, and I have
caught something. I am seriously ill, dizzy and breathing difficulty. (The Apple Store is a crowded place - full of kids from all around the world. Kinda like a biological ground-zero..)
2, 2021 - Money That's (Almost) Worthless - The inflation rate in Venezuela, year-on-year, has been 1,743% this year. The economy is run by "South American Socialist Idiots", a curious species of human fools, derived from Spanish
Catholic monsters, who invaded the place around 500 years ago. The place represents a perfect economic laboratory. It demonstrates what happens when you put complete idiots and criminally violent socio-pathic nutjobs in charge of a nation.
You get economic shit.
The Venezuela "government" (can you really call it that?), has "addressed" it's inflation problem, by dropping six zeros from their currency - called the "Bolivar". So, if you had 1 million "Bolivars"
last week - (oh! you were a *millionaire*!) - today, you have: One.
I think the Reuter's reporters have trouble writing this story, without giggling. Venezuela is a perfect textbook case of what *not* to do. Perfect "South American Socialist Idiots". SImply perfect. Listen to them babble
in their strange Spanish. The only thing they make for export, is bad TV shows and oil. I heard they even nationalized the Kellogs Corn Flake factory. Oh, that should help! Your breakfast cereal is now made by Government workers.
It's like a perfect model of perfect economic failure. Really, quite an interesting economic experiment. This level of inflation is *not* the result of US mandated economic sanctions. Their failure is the result of *Socialism*,
one of the great political frauds of the 20th century, as Communism was of the 19th century. Political fraudsters are always inventing some typical gangster scam to steal wealth and fill their own pockets. But better use Bitcoin or
Gold, Maduro-boys, (or US dollarubles), since your own currency is being "marked down" at a pretty fierce rate.
Meanwhile, "official" inflation in the US is running close to 4% (But anyone who goes shopping knows that the prices are sure rising
faster than 4% annually...)
So, things are starting to get pretty bubbly - but there are also real shortages and prices rising just to allocate scarce stuff. We are finding it curiously difficult to get some specific, high-quality things we want to acquire.
There are acres and acres of stores filled with shit and crap and cheap plastic junk garbage. But try to find a quality product that you used to use, and want either more of, or another copy of, and you find often that it is simply not available.
This is curious. But that also induces price-rises.
So, we see moderate to serious inflation in the future, since it is accelerating now.
Sept. 20, 2021 - Evergrande China. Sad and bad. It would
be best, if they do not default. But since "fee-simple" land ownership is not really possible in China, then it looks like everybody has a problem. There is maybe no real market for their "real-estate" assets, because maybe these do not even
Since it appears that Xi wants to maintain the "North Korea" land-tenure model in China, then Evergrande maybe has no assets at all. This is a problem. The whole Company may be just an air-bag. But it is their problem,
not ours. You only have a problem, if you are holding Chinese paper - you think. But maybe your bank or your pension fund, holds this paper. Eweh.. Yuck...
Reuters has a good summary of this particular shit-show:
Personal and corporate integrity - the ability to
trust the guy you do business with - this is the key to success or failure in the commercial world.
There are these places in the world, where the people just do not get this concept. It is just not something inside their little heads. You
can have lawyers write a million lines verbage into contracts, but it all comes down to trust. You loan some guy money (by buying his paper), and you have to know that you will be paid back. If the bastard defaults on you, it is
mostly his problem. You will lose money - but he loses his whole soul. He forfeits a life of honour. He loses his spiritual manhood - his very life-force itself. He becomes just another biting insect on, or cancer-cell in, the
great body of the world.
He who does not pay back what he owes, is a worthless and ugly error-condition, in the machinery of reality, like a radio-active leak in a school, or a dead-rat in the baby-food.
Is Evergrande the 2020's equivalent of
Lehman Bros.? We don't think so. Lehman had that whole "clever New York guy" thing going - they had this myriad of multiple entities under the "Lehman" name - all different little orgs, - and they figured they could bankrupt some, and keep
others. It's a crooked-prick trick, that lots of sad/bad boys try.
You cannot invent racial pictures to characterize these folks, else you will just be make more errors. It all comes down to how you respond to the misfortune
of a reversal. The Jews would get unfairly treated, because they loaned money, and expected to be paid back, and folks would try to cheat them, and invent reasons why they did not have to honour their contracts. It's not that Lehman were
Jews, it's that they were bent assholes. And those come in every culture and race.
The stench of dishonestly and the dishonour, attaches to the defaulter. It smears the family or company name with shit, if you try to do stuff like this,
and use the bankruptcy laws to avoid paying your bills.
No-one will want do business with a shit-stained defaulter.
You should not default. You should pay what you owe.
When you are running a business, you must
ensure you maintain both financial and moral integrity. It is such a simple concept - but like "common sense", it gets brushed aside by a curiously large number of rather low-quality people.
We really hope the Evergrande collapse does not
damage the global economy.
Right now - every financial regulator, should require every public company, to indicate if and to what amount, they are exposed to this sad Chinese shit-show.