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In my college, CFA, and Wall Street days, I never heard of “NIRP,” or negative interest rate policy.  The reason – of course – was that it not only had NEVER occurred, but didn’t appear possible.  The greatest analytical tool is logic, and logic says normal, un-coerced investors would NEVER pay an entity to hold their money – particularly entities on the verge of BANKRUPTCY, amidst an environment of regular client THEFTS, as at Madoff Securities, MF Global, and PFG Best.  Not to mention, collusion to STEAL client funds, a la LIE-BOR, MUNI BID-RIGGING, and countless other scandals.

I had also not heard the term “BLACK SWAN” – certainly, not in the context of financial investments.  Sure, unexpected events occurred, but “unexpected” during the 1982-2000 stock market principally pertained to economic data, earnings reports, and the occasional “market dislocation.”  In fact, the only real “black swans” I can recall were the 1987 crash (a 23% decline, which bottomed the market that day), Greenspan’s 1996 “Irrational Exuberance” comments (a whopping 2% decline, recouped in two days), and the 1998 Long-Term Credit Management debacle (a 17% Dow decline over one month, recouped a month later).  There are always “unexpected” events, but for the most part, nations and governments were peaceful and financially healthy.

Fortunately for supposed”geniuses” like Warren Buffett – whose investment careers were fortuitously timed – the 1982-2000 bull coincided with the early stages of the GLOBAL FIAT CURRENCY STANDARD.  Thus, the world’s citizens, corporations, municipalities, and nations could have their cake and eat it, too – by increasing DEBT without negative ramifications. The break-up of the Soviet Union turbo-charged global growth, and “all sins were pardoned” by the largely freely-traded markets.

However, when the century turned, credit cards were nearly maxxed out – finished off by the debt EXPLOSION following repeal of the Glass-Steagall Act in 1999.  From that point on, increased DEBT had ramifications; bankruptcy for individuals, falling stock prices for corporations, and surging bond yields for nations.  Let alone, massive inflation of currencies, affecting the ENTIRE GLOBAL POPULATION.

Fast forward to 2012, and the law of DIMINISHING RETURNS guarantees each dollar of DEBT will not only prevent growth, but destroy it.  With so many entities overleveraged, it’s time for the WORLD to “pay the piper.”  EVERYONE and EVERYTHING is going bankrupt, so what used to be considered a “sixth sigma event” – i.e., a “BLACK SWAN” – is considered the “new normal.”  Thus, when something truly shocking occurs, it is BIG, POWERFUL, and CATASTROPHIC.  And care of the GLOBAL fiat currency system, the ONLY “panacea” is MORE DEBT, usually via MONEY PRINTING.  Thus, the “BLACK SWANS” get larger and more deadly, with NO REMEDY other than to crash the entire system, which I assure you MUST happen.

Amazing how a 12-year bear market affects PERCEPTION, and how tragic it is that what was once “bridgeable” is now terminal.  I guarantee the “BLACK SWANS” continue to grow in intensity and destructive power, until one large enough – think Hurricane Katrina – inevitably ends ALL hope of economic and financial salvation.

Trust me, it’s coming – and right soon!


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