Tulipmania

We are living through the modern version of tulipmania. For those unfamiliar with this early economic bubble, Wikipedia offers this observation:

At the peak of tulip mania, in March 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled craftsman. It is generally considered the first recorded speculative bubble (or economic bubble),^[3]although some researchers have noted that the Kipper- und Wipperzeit episode in 1619–22, a Europe-wide chain of debasement of the metal content of coins to fund warfare, featured mania-like similarities to a bubble.^[4] The term “tulip mania” is now often used metaphorically to refer to any large economic bubble (when asset prices deviate from intrinsic values).^[5]

Our Case of Tulipmania

Tulipmania in our case has nothing to do with bulbs. Nor is it limited to financial market valuations. What the government has done has distorted stocks, bonds and non-financial assets. The economic scam that is being perpetuated is not limited to the US. Nor is it solvable in any way, regardless of what government does.

The problems arise as a result of decades of government meddling. Increasing that meddling in order to keep the bubble going solves nothing but the purchase of time for the scoundrels who created the problem. Only continued meddling can perpetuate the fraud — but only for a while.

The condition of the US economy is much worse than the political class wants you to believe.

Gordon T. Long provides his take on financial and economic matters:

None of this should be surprising. A welfare state always leads to economic collapse. Promises always exceed resources. Altering income distribution is not done in a vacuum. The production of income and wealth is not independent of its allocation. As the benefits of not working increase, the producers shift from producing to free-riding. That further worsens a government’s ability to honor unpayable obligations.

All Asset Prices and Allocations Become Distorted

As matters get worse, government (and the Federal Reserve) step up their interventions in an attempt to hide reality. None of this works, at least economically. It may work temporarily to delay the rebellion of the those raped by the policies. Zerohedge states:

… while we have explained countless times why central-planning always fails in the end, we will give the podium to Fred Hickey, aka the High-Tech Strategist, who gives a very poetic summary of what the Fed’s endgame will look like:

The Fed hasn’t made the world a better place with its interventions. It has created moral hazard, encouraged the formation of asset bubbles that eventually pop (leaving economic messes), widened the wealth inequality gap to record levels, discouraged savings and investment, severely penalized retirees on fixed incomes, encouraged spending, funded massive government deficit spending by monetizing the debts, lengthened the recession and likely reduced the number of jobs that would have been created if the economy had been allowed to take its normal course. Eventually the Fed’s policy interventions will also have created debilitating, widespread consumer inflation, the “cruelest tax” against the poor and middle classes.

And the final nail in the failed Keynesian school of economic thought’s coffin, will come when a hundred million current and future retirees wake up one day, realize that the welfare state dream is over, and suddenly realize they have nothing left to lose.

It is only then that the 1% will be truly in peril, as one after another revolution in the history of the world has shown all too clearly.

This economy and the thugs we refer to as government have deliberately engineered this massive Ponzi Scheme in an attempt to perpetuate the most massive plunder and wealth transfer in the history of the world. When the feces hits the fan, Ferguson, Mo. will seem trivial in comparison.