Be Prepared

We all know what that shocking turn was which Jeffrey Tucker talks about in his article. We should, no, we must be prepared.

A Moscow sculpture of Baron Munchausen pulling himself out of a swamp by his own hair. Sculptor: Andrei Orlov. Photo: Andrew Barkatov.

In January 2021 I remortgaged my house, switching to fixed interest rates for three years. At that time, for over nine months, large parts of populations all over the world had been confined to their homes, whole industries had been brought to a standstill, and to support this money had been printed at an unprecedented rate. It was obvious to me what was coming: Inflation, and no ordinary level of inflation, then recession, not an ordinary one either.

The pseudoscientific “Modern monetary theory” had been wildly popular among economists and politicians alike. Without going into too much detail this theory states that monetarily independent countries can simply print as much money as they need and spend at will without consequences.

This theory of course makes no sense, and how it came to be so popular is a mystery to me. Listening to its proponents trying to argue for it is like listening to Baron Munchausen explain his own ingeniousness.

We are now seeing the consequences of the madness that took hold in early 2020. Attempts at blaming the inflation on the war in Ukraine are futile; the importance of Ukraine or Russia to the world economy is nowhere close to being such that the conflict and sanctions might explain but a fraction of this.

Many blame environmental policies, but we must keep in mind that for the most part the proposed switch to greener energy options is still just that; a proposed switch.

Lockdowns and “modern monetary theory” led us here, and attempting to solve the problem by even more doses of the same poison only makes the situation worse.

Jeffrey Tucker has now published an excellent account on Brownstone of how this situation came to be and what we may expect. Fittingly, it is titled A World on Fire. And he reminds us of another era, a single country, that went this way:

“The story of going from normal to double and triple prices, forecasting to go much higher, reminds me of books I’ve read about Weimar, how things were fine until suddenly they were not and life itself took a shocking turn.”

I consider myself lucky to have acted 20 months ago. The rates are now double what they were in January 2021 and on the rise. But now I ask myself if I should have opted for five-year fixed rates instead. For we all know what that shocking turn was which Jeffrey Tucker talks about in his article; we know what then happened. We should, no, we must be prepared.