The Time of the Vulture

The Time of the Vulture by Darryl Robert Schoon via Gold Seek

In times of expansion, it is to the hare the prizes go. Quick, risk taking, and bold, his qualities are exactly suited to the times. In periods of contraction, the tortoise is favored. Slow and conservative, quick only to retract his vulnerable head and neck, his is the wisest bet when the slow and sure is preferable to the quick and easy. 

Every so often, however, there comes a time when neither the hare nor the tortoise is the victor. This is when both the bear and the bull have been vanquished, when the pastures upon which the bull once grazed are long gone and the bear’s lair itself lies buried deep beneath the rubble of economic collapse. This is the time of the vulture. – DRS, 1991

Four months before Wall Street banks collapsed in September 2008, in Triage In Financial Markets (May 2008) I wrote:

It has been only nine months since credit markets unexpectedly froze in August 2007. The central bankers who were surprised by the summer 2007 credit contraction now hope the danger has passed. But they are about to be surprised again and soon.

Since then, central bankers have been furiously providing liquidity to banks, the intermediaries of credit, hoping to restore confidence in credit markets—but more liquidity will not restore confidence in debt any more than more money will satisfy the yearnings of the soul.

CAPITALISM’S MINSKY MOMENT

The late economist, Hyman Minksy, is a name increasingly heard in these increasingly problematic times. Minsky’s hypothesis was rather direct in its clarity, that as capital markets mature they became increasingly unstable, that over time investments become more speculative leading to heightened instability which culminates in market corrections whose severity is a function of previous excess.

Capital markets built on credit and debt need to continually expand in order to service previously created compounding levels of debt. When only England was on a credit-based system, as long as England’s empire expanded its increasing debts could be absorbed; but when England’s expansion slowed, so too did its economy. [and the ability to repay its debts]

The conundrum of the necessity of continual economic expansion is now being played out on a global scale. Now, the entire world is based on England’s debt-based central banking system; and, consequently, unless the world economy continues to expand, the commensurate expanding edifice of global debt will collapse.

When global credit markets imploded in August 2007, the contraction of the world economy began. Since then, despite the best efforts of central bankers, global growth has continued to slow; and, after the present contraction has finally run its course, the world will be a far different place than it is today.

In May 2008 we are at the cusp of the crisis. Those still in denial hope we are closer to its end than its beginning; but, if we are, that means the descent will be quick and brutal instead of protracted and painfully slow. Either way, the end will be the same.

The daisy chain of debt constructed by bankers has now connected all of us, the solvent and insolvent alike. Personal solvency will provide but little protection when countries, relatives, neighbors, banks, and employers and employees become insolvent. Gold and silver will be among the few lifeboats and faith will be invaluable.

            May 2008

In September 2008, capital markets collapsed as the cusp of the crisis gave way to the crisis itself; and, in 2020, the crisis has finally reached its resolution, delayed for twelve years by massive taxpayer bailouts, free credit and trillions of dollars borrowed and spent by bankers’ trying prevent the collapse of their lucrative franchise of living like parasites on the enterprise and labor of others by indebting them through their issuance of debt-based money.

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