Total Lunacy!

An essay by Egon von Greyerz of Matterhorn Asset Management perfectly captures the insanity of these times, most particularly the belief that printing press money will spare us from economic disaster.  Click here  for the complete essay, from which I have extracted the following:

“The US is haemorrhaging financially and economically. It has lent or committed almost $13 trillion in the last 18 months to prop up the financial system.  The estimated government deficit in the current year is almost $2 trillion or 50% of the budget. All the money committed so far has only achieved two things: Firstly it has created some short term hope which together with totally illusionary sightings of green shoots have generated a small stock market correction (which we forecast in our January Newsletter) and some belief that the crisis is ending. Secondly, all the funds printed so far to save the system have gone to Wall Street but has done nothing whatsoever for the real economy. Every single sector of the real economy is deteriorating whether it is production, unemployment, corporate profits, real estate, credit defaults, construction, federal deficits, local government and state deficits etc.

“And what is the government doing about it. They are doing the only thing they know which is to print more money. This is total lunacy! How can any intelligent person believe that printed pieces of paper can solve an economic catastrophe? If that were the case we could all go home and write out pieces of paper or use Monopoly money to spend in the shops or repay our debts.”