Unscrewing the Economy

Monday was a disappointment. Tuesday too.

After last week, we were hoping for more. A hard rain…a cleansing wash…a flood that would flush the trash out of this market.

We’re ready for the next chapters in the story – chapters 7 and 11…!

Hey, wait…you’re probably thinking – “How heartless can this man be?”

Well, we can be a whole lot more heartless. Just give us some widows and orphans to evict! Give us some malingering employees to fire! Show us a man who is down…we’ll give him a kick!

But…shucks…you know we’re kidding. We are such a softie; we can’t fire or evict anyone. And kick a man when he is down? We wouldn’t think of it…unless he is a world improver.

Yes, dear reader…can’t anyone rid of these pesky meddlers?

The reason we want a collapse on Wall Street is that it’s the only way for the economy to get back on its feet.

Birds gotta fly. Fish gotta swim. And a Great Correction has to correct.

It has to clean up the mistakes. It has to sweep out the debris. It has to un-screw up the economy.

Who screwed it up? The fixers…the world improvers…the meddlers…the democrats and republicans…

Now, stocks have to fall. Banks need to go out of business. Companies need to go broke…and households need to default…

Asset prices need to go down. Unemployment needs to go up.

The pieces have to fall…or you can never pick them up.

If the feds would just leave well enough alone Mr. Market would have handled the whole thing. And we’d be out of this Great Correction by now. He would have knocked down almost all of Wall Street. He would have put dozens of our leading companies into Chapter 11…blown up trillions of dollars in derivatives…and forced thousands of bankers, brokers, businessmen and hedge fund managers into early retirement.

That problem of unequal distribution of wealth…the rich getting richer, and all? He would have taken care of it!

And he would have done it all in a few short weeks in late 2008. By now, we’d have full employment again. And people building real wealth.

In other words, if the feds had not poured trillions of dollars down so many rat-holes…good money after bad…the whole thing would be over by now. We’d have a growing economy. We’d have real businesses producing real stuff…and paying real wages to real workers.

But the feds are on the job. And the job they’re on is to protect their voters…and their campaign donors…from Mr. Market.

Of course, all they can do is delay the fix. They can make the problem worse. They can make the losses bigger. But they can’t fix anything.

Fixing requires pain. And the feds try to avoid pain at all costs….especially when they are the ones who will feel it.

So, they borrow and spend…and then print and spend…until the whole thing blows up.


Bill Bonner,
for Markets and Money

From the Archives…

When Capital Comes A Knocking
2012-06-01 – Greg Canavan

When the Pain From Spain Moves Across the Plain
2012-05-31 – Greg Canavan

Greek Game Theory: Default, Devaluation, Austerity, Deliverance?
2012-05-30 – Nick Hubble

Desperate Stock Market Traders Waiting To Be Made Whole
2012-05-29 – Murray Dawes

Greek Elections: The Fear of Uncertainty
2012-04-28 – Dan Denning

Bill Bonner

Bill Bonner

Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail Markets and Money.
Bill Bonner

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