ANYTHING REAL

 

The markets continue to melt up.  Therefor the economy must be on the mend, right?

WRONG,

The markets continue to melt up because:

A) The United States still has the world's reserve currency.  Global Loans and Commodities are mostly settled in US dollars.

B) The Federal Reserve Bank of the United States is still the Buyer of Last Resort of everything that is traded in the US Economic Markets.  Any and every type of Loan, Credit Obligation, Common Stock, Preferred Stock, Option, Future etc is backstopped by the Federal Reserve Bank and the US Treasury with dollars they can manufacture out of thin air because the US dollar is the Global Reserve Currency.

However, the Game is in the ending stage because:

A) Deglobalization is infaltionary for Labor and Commodity Inputs.  So these two things will continue to rise as the Fed prints money as long as the Deglobalization Trend continues.  Which is for the foreseeable future.

B) China, Russia, India, the Opec Nations and much of South America and Africa are tired of paying for the privilege of using increasingly weaponized US dollars that are exporting terrible inflation. Soon these countries Organized by China, will come out with a competing reserve currency. 

And when these two trends make the sea of US dollar Liquidity a burden rather than a benefit, the massive Econmic Edifice built out of Paper will crumble and only REAL THINGS will retain value.

Crumble How?  Well, at some point soon, one of the many recurring liquidity crises will be met with trillions of dollars of bailout money - and those paper obligations will still not function.  Because the paper edifice is now so large that ten or twenty of thirty trillion will not be enough.  And when that Bailout figure is just too high - Confidence will not be restored.

And after all a Confidence Game can not work without Conifdence.

And then Real Things will be the only things with value

I like Historically interesting Gold Coins and Gold Medals

But anything real: Real Estate, Rare books, Sports memorabilia, Historical documents, Classic Cars, Wrist Watches (!) Rare wines and Brandies and Scotches, Instruments, Rock Memorabilia, Toys, Entertainment Memorabilia, Fine Art.  not so Fine Art.  And all sorts of weird stuff like Hair Lockets, Coke Bottles, Antique Medical Devices, Torture instruments, Rodent Traps... 

Real Things.  People collect them.  

They will save you when the Paper Edifice collapses.