Investing with the Sorcerer's Apprentice

A survey on the motives for wealth building would be interesting. Some might have dynastic dreams, aggressive plans of purchases and control, but most motives would likely be defensive. Most people likely save money to protect themselves from the danger of economic instability that is created by the very people who proclaim they want to stabilize our lives.

So our crisis du jour is instigated by loose money originally aimed at stabilizing our community through broadened home ownership. The looser rules were watched over by various agencies to prevent abuse and to make sure all was stable. The economic leaders approved of the use of derivatives that emerged to hedge both sides of these purchases because these instruments broadened the economic base and stabilized the economy. When the regulatory system failed, debts went unpaid and the economy began to contract, the economy was flooded with money at low rates to stabilize the economy. The economic advisers were certainly not going to allow illiquidity to occur--as occurred in the Great Depression, the result of economic tightening initiated early in the Great Depression to stabilize the economy. The Powers-That-Be feel that looser money will stabilize the economy, as they did in the beginning of this cycle.

One must admire their confidence. They are like Xerxes whipping the waters of the Bosporus, angry and righteous, certain they are in control and dismissive of anyone who sees them as the sorcerer's apprentices.

Meanwhile the desperate citizens watch in awe, store food and buy guns and gold as they await the next self-inflicted crisis.