There’s nothing wrong with falling out of a plane. It’s hitting the ground that kills you. In other words, it’s the pace of change that matters more than the event itself, or any prior history.
Europe is facing an extraordinary energy shock. I cannot find a historical parallel outside of a war.
Interest rates are spiking rapidly, especially mortgage interest rates. Bond prices are cratering globally, and Japanese government bonds are exploding higher in yield forcing the Bank of Japan (BoJ) to respond with legendary never-before-seen rates of currency printing. The Yen is falling dramatically against the dollar.
All of these gyrations are individually troubling, but as a collection of indicators are saying, “Houston, we have a problem.”
What we don’t know is what happens next as 40 years of increasingly ill-advised and ever-larger monetary interventions by central banks come to a crashing halt.
Honestly, there’s nothing they can do. Too many of our current predicaments are structural in nature and therefore almost completely resistant to anything the central banks might do. Raise rates, lower rates, print more, don’t print more…none of that matters to a global energy landscape that is in structural short supply.
Once you understand the energy situation, a lot of the rest is easier to grasp. Net energy is everything.
The conclusion to all of this is that it’s time to become as resilient as possible. Tend those gardens, get to know your neighbors better, and safeguard your wealth as much as possible.
from Peak Prosperity https://ift.tt/Jv4EF2a
