Complacency!… Complacency!

All I can see now in a risk-savvy over-laden straw-that-didn’t yet-break-the-Camel’s-back resilient global economy is just that. A yearning for ever higher higher returns, regardless of stupid and corrupt avocations of extinct terms such as “risk” and “loss”.

It reminds me of the stories investors later told about the Stock Market Rally of 1929. Then as now investors hungry for returns took chances, however risky, to make another dollar. Did they think it would never end? Oh sure they didn’t. They knew good and well what a market panic (1907) or a Depression (1920) looked like. But greed won over fear and every last man was standing outside waving his hands excitedly, laden with margin certificates to buy even more lots of shares on the notorious exchange. They knew it would end but they were going to hang on until it did. (Talk about clogging exits).

Today, the problem is much worse and has spread to almost every sector under the sun. The precious metals have been the only asset that have not seen all-time highs and has nonetheless rallied over the past few years together with everything. Everything that is other than a sentiment for risk.

Do people even know what a “Depression” means anymore? Does any layman set aside a substantial amount of his income in case of harder times? Does any “investor” even have the slightest perception of risk when investing in once tabooed emerging markets such as Russia and Malaysia? The belief in wealth and greed for more has finally gained precedence over economic realities. All promises are now believed to be true.

One thing becomes perfectly clear: “Buy tangible things. Sell paper.”



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