End of the World Update, Part Infinity

In case you’re not feeling gloomy enough, then check out these two not-entirely-unrelated stories from Zero Hedge:

Argentina orders a two-month supermarket price freeze. Because the velocity of money always responds to government dictates.

The Argentinians who suffered through the Peron collapse – at least the ones who understand the how & why of it – are preparing for the inevitable:

What consumers will certainly do is scramble into local stores to take advantage of artificially-controlled prices knowing very well they have two short months to stock up on perishable goods at today’s prices, before the country’s inflation comes soaring back, only this time many of the local stores will not be around as their profit margins implode and as owners, especially of foreign-based chains, make the prudent decision to get out of Dodge while the getting’s good and before the next steps, including such measures as nationalization, in the escalation into a full out hyperinflationary collapse…

Meanwhile, back here in the good old USA, if this guy’s right then get ready for a wild ride in the stock market:

I have written before about the grotesque – in my view – and persistent misallocation of capital (in financial markets) being caused by the mispricing of capital/money by central banks; by their ongoing “promises? to misbehave – seemingly forever – such that anyone with good common sense will eventually be battered and beaten into submission and be forced into the misallocation game; and by the – again, in my view – irresponsible behaviour of fiscal policymakers too. Collectively, we have a huge global game of kicking the can down the road driven by excessive and wasteful government largesse, funded by explosive growth in central bank balance sheets.

Put simply, the Fed’s Everlasting Gobstopper money-printing operation is pretty much the only thing propping up equities. They’re flooding the world with cheap money, creating an investment bubble that will eventually pop just like the housing bubble.

Lord help us but the Commie thug Khrushchev may have been right after all: Capitalists would sell us the rope we’d hang ourselves with.

I say that as a proud gun-totin’ free-marketeer, but would note that there is a distinction between a free market and whatever it is we’ve been experiencing for the past several years.

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