Red Pill, Blue Pill
by James Delingpole: Radio
Free Delingpole XVI: Buying Britain's Gold Back
The other day
m'learned colleague Ambrose Evans Pritchard wrote a
piece in praise of money-printing. What the world needs is more
Quantitative Easing, he argued, though this time deployed in "nuclear
I have no
doubt that this would bring about a full recovery very fast if
conducted with enough panache, but is it possible to marshal political
consent for such revolutionary action?
Party Congress, like Europe's bourgeousie, would rather wallow
in liquidation, Puritan cleansing, and mass default than tolerate
the possibility of a solution.
disagree more violently with this analysis. Nor, happily could most
of you. The most popular comment response approved by over
300 readers - countered:
economics is not the fiscal rocket-science you make it sound.
Capitalism itself is based on good old-fashioned honesty. The
money at the heart of it must be both an honest store-of-value
and an efficient medium of exchange. It ceases to be so when the
inherent deceits of fractional reserve banking allow trillions
of false credit to be pumped into the system, thus forcing up
prices (booms) which inevitably lead to over-valued commodities
next is that the banks, having privatised their gains in the good
times, simply socialise their losses onto the tax-payer. It's
a crime. Simple as that really.
words and seeing how many "likes" they got
did my heart good. "So I'm not alone, after all," I thought
to myself. "There are others out there who've taken the red
The red pill
for those who haven't seen The Matrix is the one which
shows you the world as it really is rather than cosy, fantasy confection
of the popular imagination. The
red pill is not for the fainthearted because it involves confronting
painful, ugly reality rather than living the dream.
Let me give
you an example of what taking the red pill entails. It's a report
from last year by the Boston Consulting Group showing that the
amount of household, corporate and government debt which needs to
be eliminated stands at $21 trillion. The cost of dealing with this
"debt overhang" will entail the loss (ie confiscation
by the government) of one third of the wealth of the asset-owning
classes. Some time in the next few months, weeks or years, we're
all going to be taking a 30 per cent hair cut.
fascinating report, this time about where
gold is headed. Conservatively it estimates its target price
at $2,300 an ounce.
mention such things, I'm always amused by the rage it generates
in some quarters from "experts" who passionately believe
that gold is overvalued, that it's a bubble that is about to burst.
Well fine. If that's what you think, don't go and buy
gold bullion. No one's forcing you to and what I say
makes no difference either way to the market price: you can't ramp
gold like you can share prices. I just happen to think you're making
a big mistake which you could easily avoid were you to acquaint
yourself with the most basic principles of Austrian economics.
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© 2012 Daily Telegraph