I love running. I run around 250 km a month. While running, I have time to think. Some days ago, I decided to choose a new path, the Thames lane on the Northern part. It was drizzling, which I love. And then, suddenly, as if the rain cleared my mind, I realised why the Governments were so confident about increasing the money supply: none of then has the intention of paying their debts with a fair valuation.
Fair valuation, that's the key point. Of course if I owe you 100 USD, I can print a paper that says "worth 100 USD", but when you bought my debt I could purchase many more things with that money than what I will be able to do, later on. And all countries are involved, even Switzerland, Norway, Canada, or Australia. All of them. So there is no solution for a conservative investor. If we are right, no debt should be bought.
Now, we understand why the stock market will go up, gold will go up, after a little bit of cleaning in certain places real estate will go up... Sometimes we don't realise that when we purchase something money goes into the denominator of a ratio, so when money goes down, the price will go up. As we could see on the chart, the Dow Jones has been going up steadily and the falls we see are minor ones.
This scenario could start in 3 or 4 years, after they clear the political issues, so amazingly perhaps we will see deflation first and then... a no-paying-debt world.
Fair valuation, that's the key point. Of course if I owe you 100 USD, I can print a paper that says "worth 100 USD", but when you bought my debt I could purchase many more things with that money than what I will be able to do, later on. And all countries are involved, even Switzerland, Norway, Canada, or Australia. All of them. So there is no solution for a conservative investor. If we are right, no debt should be bought.
This scenario could start in 3 or 4 years, after they clear the political issues, so amazingly perhaps we will see deflation first and then... a no-paying-debt world.
