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The Truth Will Out – Eventually

There is a brewing controversy about an article by revered economic commentator Ambrose Evans Pritchard that mysteriously disappeared form the Telegraph’s website,but  not before it was picked up by the ever vigilant blog denizens. TMFSinchiruna’s blog in the The Motley Fool gives the best summary and links in his post ‘ The Genie is Out of the Bottle’.

We in Smart Taxes do not claim any particular insight and leave it entirely to readers to make their own judgement. Here is an excerpt to pique your interest.

“Just as we are whipped up into a rally-fed frenzy of fantasy green shoots, along he came with an article last week which included a lengthy series of shocking quotations attributed to a certain private-sector participant in the TARP program. Evans-Pritchard quoted the individual as calling the program a “sham”, forecasting a “catastrophic increase in the number of LBO’s (leveraged buyouts) going into default”. and suggesting that “the only way out is to debase the currency, but that is going to lead to some very high inflation three years down the road”. I read the story on the Telegraph website, but by the time I went to write about it, the link no longer produced the article …  it had been pulled…..

…Well, one might think that potentially fueling an international uproar of speculation about what might or might not have been said at the Qatar Global Investment Forum would have some business editors laying low for a couple of days… but not Ambrose Evans-Pritchard. He came out today with another article blasting the U.S. fiscal response to the present crisis, building off of a BBC report that cited the chief finance spokesman for Japan’s opposition party saying that it would invest only in yen-denominated U.S. bonds rather than accepting the risk of dollar devaluation. The article also boldly claims that China “suspects that Washington is engineering a stealth default on America’s debt by the trickery of quantitative easing”.

Interesting. Not that we didn’t suspect though – it is a logical solution to unsustainable debt.

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One Response

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  1. Adrian Wrigley says

    The best way to understand what is happening is to study financial history. One gem I found is this
    about the hyperinflation in France. There is a nice analysis of who the winners and losers are. Once the government really starts taking the p***, the only winners are the speculators and the insiders. This is where we’re at.

    I’d love to have a decent job, working in my field, earning a good wage and saving for my future. With people like Geithner around, this just doesn’t make sense. It’s more fun and much more lucrative being a speculator!

    Here in Britain, we’ve seen inflation (M4) averaging 12% per annum (1997-2007). Speculators had a field day collecting this money first through tech stocks, then via house price inflation. After this, we had a commodities bubble (oil to $150/bbl). Then the bond bubble. Now the bailout bubble. The credit policies have given rich pickings to astute speculators. But where next?

    Clearly things are accelerating. The stock bubble took 20 years. The commodity bubble only 1 year. My hunch is that any real income producing asset (eg farmland), commodity or precious metals (Silver, Platinum group) will do OK. Any paper, notes, promises or other counterparty claims are in serious danger. Beware the “Bank Holiday”!

    So yes, skilled speculators and insiders will be the main winners. We’ve seen it before. It’s deliberate and calculated. It’s an absolute disgrace. And the cover-up in mainstream media is pretty transparent.