Tuesday, November 29, 2011

Painful readjustments

Detlev Schlicchter of Paper Money Collapse blog is telling us that the bubble in government bonds is finally bursting. It is a myth, he says, that the government can always pay. That is a statement that has no basis in fact.

The fate of myths, we are then informed, is that they sooner or later clash with reality. Then they are exposed as myths, which requires a painful giving-up of beloved certainties, a readjustment of paradigms and an abrupt change in behaviour.

I think we knew all that, but it is equally evident that our masters don't. We hope, therefore, that their adjustment to reality is as painful as possible. That should start with the preposterous Osborne today, who is going to try (and fail) to convince us that he knows what he is talking about.