Friday, January 15, 2010

Ben's Helcopter Meets an Angry Mob of Lenders

I guess it shouldn't surprise anyone that Ben, an academic with no experience at all, didn't consider that his helicopter might meet a mob of angry lenders, not willing borrowers, as our economy collapses into a mega-depression.

Ben's childlike idea was that if you load up a helicopter with cash for sale, people will always trample themselves to buy it. How stupid. I guess Ben never considered that people might empty their bank accounts and mob the Treasury window to lend at 0% (a cool 100% return every time prices halve), instead of borrow into his uber-depression. Meanwhile, Ben waves from above, confused and disoriented.

The economy has collapsed. The next wave of fireworks has begun.


  1. Hi FDR,

    Treasuries at 0% or cash?

    I hesitate to buy 10 years for my kids education (although that was done for me by my parents), literally due to worries about a 'partial repayment'...don't you think they would partially default on domestic debts before defaulting on foreign debts?

    (Partial Default = not paying the interest due when the bond is redeemed)

    Basically, I see cash as safer for horizons longer than 3 years?

  2. During first fall Euro went up against Polish zloty(my country coin) Now Euro is falling against zloty. Do you believe I should sell my few savings I have in Euros and get zlotys?
    Your advice would be most welcome.

  3. "Treasuries at 0% or cash?"

    The tiny amount of interest paid on T's quantifies your additional risk. Not much. when T's go really negative yield, it'll be too late to stockpile either one.

  4. "Do you believe I should sell my few savings I have in Euros and get zlotys?"

    All major currencies are strengthening in unison. Central bank paper is burning in all corners of the Earth.

    As long as you convert assets to inflated paper and protect that inflated paper as prices plunge, you'll do great in any major currency.

    Personally, I think dollars will continue do the best, only because the existing dollar leverage was probably the worst.

    Remember, the US Dollar has been SURGING in value for almost two years, contrary to all the popular misinformation.


The USA's political-economc system is best described as:

On Nov 2, 2010, I plan to vote (FOR or AGAINST) my incumbent congressman

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