Warum gibt es etwas und nicht nichts? (Why is there something rather than nothing?) - Leibniz

Friday, April 18, 2008

Denninger calls for a borrower's strike

It lifts your heart a little to read someone who still believes in his country and is unafraid to express moral indignation. Here Karl Denninger advocates getting a home safe for your hard-earned - something the Japanese went into in a big way when their deflation hit.

Speaking of Japan, the Nikkei shows that the stockmarket can disappoint for long periods:


matt said...

I recently tried to convince all of my friends to stop borrowing money from the banks. I gave a cogent explanation of how the system works. They understand, but the response I got from all of them is that because assets have inflated so far beyond their grasp, they have no choice but to borrow.

Of course they have a choice. What they really mean is that they have no choice if they want to live the MTV life.

The real problem is sociological - Americans grow up brainwashed by the media that there is a certain way to live. Unfortunately, that "way to live" is impractical, frivolous, and beyond their means. More importantly, it broadly harms society, especially those of us who believe in earning and saving for what we buy.

dearieme said...

But how should I time my change of investment strategy from tinned food, loo rolls and light bulbs, to cash-in-hand? Probably I'll do it when the pound stops falling versus the Euro.

dearieme said...

P.S. we were shopping in Aldi recently and noticed that they had home safes for sale. How prescient.

Semaj Mahgih said...

Explain a little more how the Japs went about that, Sackerson. It may be the way.


Thank you all. Matt, I agree: liberty has a price, and this isn't a particularly steep one.

DM: bit of everything, I suppose. Remember the Boy Scout motto.

James: as prices began to shrink, the Japanese realised that if you don't spend your yen, it'll buy you more later. The government got so deperate is started issuing vouchers, and even that didn't work. And there was so little trust in the banks, which were intimately implicated in business and property, that holding cash at home became the thing to do.

Nick Drew said...

Denninger. Wow


Hi Nick. Makes good reading, doesn't he? Fractional reserve banking in reverse - keep £10,000 in cash, deflate the system by £1 million or so.