It’s Bubble Time!

by Chris Martenson

The delusion much of society wants to believe in is that we can get something for nothing. That is, to become rich, all we have to do is buy an asset, like a house, and simply wait. The wealth will magically arrive. No work performed, nothing new created, nothing done. Just buy, and wait.

It's Bubble Time! | BullionBuzzBut even a cursory examination of life reveals that wealth comes from hard work, usually coupled with taking risks. Somehow we’ve slipped into the delusion that our culture has figured out how to escape the old bonds of wealth creation.   

The Romans minted smaller and less pure coins, and it worked for a while. Then its empire collapsed. Zimbabwe (and now Venezuela) printed money, and it worked for a while. Then its citizens were left impoverished. Society’s dangerous conceit is in thinking that somehow we’ve managed to, this time, escape the hard rules of wealth creation.

But it’s easy to see how this cannot be true for the majority, because real wealth isn’t a paper gain on a house, or money in the bank, or a large stock portfolio. Real wealth consists of the things you consume: food, appliances, transportation, entertainment, clothes, energy, etc.

Those things have to come from somewhere: They have to be produced, stored, transported and sold. By themselves, your cash and your stock portfolio have no value. Those are merely claims on true wealth.

So how can everyone be exponentially increasing their claims on real wealth, without the underlying pie of real wealth itself, increasing at an equivalent rate? It’s not. And that’s the painful lesson that gets re-learned as each new generation gets duped and then dumped by an asset bubble.

Martenson’s advice is to sell your house if you live in Toronto, or in a similar real estate market. Reduce your exposure to stocks and bonds at these record highs, and develop a wealth protection strategy. Know what the bubble signs are and stand aside, tolerating your ‘smart’ friends and neighbours. Odds are high you’ll be proven the smart one when the current bubble bursts.

The key objective is to be positioned for physical and financial safety. Those who do will prosper greatly, and be able to offer much-needed support to others, when the coming reset arrives.

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