The Unfolding Catastrophe

I am increasingly pessimistic that the world will be able to avoid an economic catastrophe of the magnitude of the Great Depression. I see neither wisdom nor will on the part of both the political classes and electorates, i.e., us, to do what needs to be done.

What has motivated me to start writing this is Don Luskin's remarks on Larry Kudlow's show on May 10, 2010. He recommended to the individual investor to buy gold because people want a currency they can count on and neither the dollar, the euro, nor any other currency is maintaining credibility.

We have spent so many resources on the necessary tasks of preventing systemic catastrophe in a world we have less to stave off other financial crises. He says that we have established a Maginot line, and we need to hope that it holds. Maginot line - that pretty much says it all.

Gold is "a perfect response to a world that is printing its way back to prosperity."