Markets About to Turn Nasty, Buy Barbed Wire: Advisor … Bond markets could get very nasty over the coming months, while stock investors could take a few months off and stop attempting to trade volatile swings in the markets, Anthony Fry, senior managing director at Evercore Partners, told CNBC Monday. "The current problems will be with us for 5 years or more and uncertainty is very high," Fry said. "Sentiment is extremely volatile as shown by the collapse of the Prudential's attempt to buy AIA. When the deal was thought up just a few months ago it was a very different world," Fry told CNBC on Monday. – CNBC
Dominant Social Theme: If the economic system collapses the four horsemen will ride and the sky will bleed.
Free-Market Analysis: Anthony Fry made headlines throughout the blog-o-sphere with his dramatic comments about buying barbed wire and guns as the West's economic environment continues to erode. The hysteria swirled about various electronic pages and the terror evinced by the more paranoid 'Netizens was almost palpable. We've seen this before of course, and commented on it as well. The dominant social theme is clear to us: "If the current economic system collapses millions and perhaps billions will die."
That's it in a nutshell. If Citicorp ever manages to go bust, if London's City takes real losses, if Germany and France's financial industries are struck by buckets of red ink, if China blows up, then the world as we know it will come to an end. And what comes after ain't going to be pretty. The idea we guess is that absent the strong and guiding hands of the Bilderbergers, the Trilateralists, the Council on Foreign Relations, etc., the world will surely go split into random, anarchic elements. Here's some more from the article:
Fry says the best we can hope for in the current environment is a soft landing, but sees little chance of this happening. "Look at the current situation. You have Greece, now you have Hungary and huge issues surrounding Spain and Portugal," he said. Fry believes many European banks have yet to fess up on losses and says governments across the world are between a rock and a hard place. "Governments need to cut spending and raise money and if they do not do so credibility will be killed by the bond market demanding higher rates," he said …
"If the nightmare scenario plays out as I suspect it may be that the debt situation gets worse. There is currently no exit strategy and the reaction to the crisis of policy makers remains a big worry." As a result, Fry is telling investors to play it safe and buy physical assets like land. "I don't want to scare anyone but I am considering investing in barbed wire and guns, things are not looking good and rates are heading higher," he said.
There it is. The quote that was replayed many times on the blogosphere yesterday: "I don't want to scare anyone but I am considering investing in barbed wire and guns." Over and over this fear-based promotion was reprised – on blog after blog. Like Oz, a master of the universe had spoken. Without the current system in place there will be only … anarchy! Without (fill in the name) Barack Obama, Hillary, Bill Clinton, Gordon Brown or Tony Blair, Angela Merkel, Nicolas Sarkozy, etc. to help support and supervise regulatory democracy there will be … chaos!
If not this, the current Western system, then nothing. A black hole. Despair … Diaspora … Desolation …
It is a meme in our opinion, one of the oldest and hoariest. We've seen it before on TV and in the movies. The nuclear weapons have fallen like rain, or they haven't. Either way the ground is parched, the children are stunted and gangs roam the earth. Mad Max flies high in a frail airplane with the bullies right behind. This is what happens when the banking system collapses. This is what takes place when Societe Generale is not properly bailed out.
Is it true? Will it take place if the coupons aren't snipped? If dividends subside will strong men drive SUV's into the dark night looking for victims to shoot in a red rage of despair? Will the dead rise and haunt the living with their entrails trailing and their mouths open looking for the flesh the way desperate financial advisors search for clients? Will monsters come out of the sea and trample entire nations in a desperate hunt for suitable financial algorithms? Will vast flying saucers settle over whole cities and in spiteful acts of retaliation explode major stock exchanges with energy beams?
No …we don't know exactly what would happen if the current financial system collapsed. We tend to think in the short run there would be considerable dislocation and in the long run people would do … OK. As they have before.
We're inclined to put our trust in "Misesian" human action. We think people are fairly resilient. We believe – absent the chaos and murderous violence of war or authoritarian declarations of martial law – that most of the middle class states of the West would manage to create new and freer societies in either longer or shorter time spans, and potentially without serial, genocidal panics. We're not sure there would necessarily be mass starvation, plagues or floods or terrible storms. Again, absent martial-law declarations by the powers-that-be (and resultant ramifications), we think economic systems might adjust fairly rapidly.
Human action is a wonderful thing. Human beings are tribal creatures and both apt and able to fend for themselves if someone else isn't doing it for them. In fact, for something like 50,000 years the world got along without the current system of regulatory democracy, viciously high graduated taxes and central banking. The world did without US$400 trillion in derivatives, 10,000 nuclear tipped warheads and a dysfunctional United Nations to manage it all.
As we've tried to explain in various feedback responses, the opposite of government is not anarchy – or not as it is commonly understood (social disorder or chaos). If a free society needs an organizing force it will find one – usually a spiritual/religious one. In the meantime, the endless insistence that only the current structure will suffice, that only the present banking structure will do, that only the international socio-political network presently in place will serve adequately – all of this has an element of rhetoric to it. It smacks of a promotion.
Yes … the hysteria is hyped – not only by the financial gurus themselves and their bought-and-paid-for politicians, but increasingly by the Internet itself. Even alternative news sites purvey endless alarmism and what seems, sometimes, to be deliberate despair. There is no alternative to the current system. And if it goes, you better be miles from civilization with a machine gun, plenty of bullets and acres of barbed wire.
We are not denying that a collapse of the modern financial structure would be either easy or comfortable. But we do have a sneaking suspicion that if the worst comes to pass, if the world's financial system were to "seize up" one day and refuse to restart, that most people would find a way forward, nonetheless. Most people would pick up and try as hard as possible to make ends meet. Many or most would extend a helping hand to neighbors. Many or most would survive and eventually, even thrive.
Of course there would be ramifications. Probably there wouldn't be as many TV stations. The idea of inevitable globalization and a one-world financial system would be seen as impractical. Governments would reduce in size and standing armies would be too expensive to afford. Wire-tapping programs and generally invasive domestic police forces would be pruned for lack of funds as well.
Sex, drugs and loud, popular music would be moderated because living would be more difficult and time would be at a premium. Public education might collapse along with the modern welfare state (which is collapsing in any case). Central banks would have imploded along with the financial system and gold and silver could circulate freely as money again.
We know it's probably wrong to float such an idea at a time when dystopia is almost universally popular. But we can't help thinking that maybe, just maybe, if the current system ended, that something would take its place.
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