If you could lie to save the world, would you?

This may be the most profound question and thought process I have had about the financial problems of the world today. It was astonishing how clear things have just become knowing that this is how things work. It is rather peaceful knowing that we have absolutely no control over our financial world. The only question is whether to keep playing or dig in. Infinite number of metaphors that may be applied to this thought process. Even if you dig in, you must be exceptionally careful that you have REALLY dug in, not just engaged in “papering the downside”.

This might be a really good opening for your seminars. You said that fear sells and I agree but in this case, the truth would sell because it is terrifying. I’m curious what you think. Read below...



How far would you go to save the financial world if you were in charge?

Here is the solution to all of our worldwide financial problems...LIE.

Lie about your debt (Greece/Goldman).

Lie about how much money you print (England – they agreed to stop telling their citizens how much they are printing).

Lie about your bad loans (the whole damn banking crisis AND STILL lying – what do you think the off-balance sheet accounts and unconsolidated companies are for?

Lie about how much you REALLY owe (US - $100T worth of accrued but unexpensed liabilities Social Security, healthcare, etc).

Lie about who you lent it to (US – IMF – EU). The US has really lent to the EU through the IMF – almost the same as the payment through the European banks BACK to Goldman.

Lie about it being paid back (GM and CEO Whitacre and the $4.7B).


Who would know? Print too much, lend too much, write off trillions in bad loans...

If there is no proper accounting and no proper audit of central banks...who will know?

How will we know? What metric will tell us? We don’t report M3 anymore...too “expensive to do so”, according to the FED.

Governmental accounting has no balance sheet – it is essentially cash based.

What is really parked on the balance sheets of local, state and federal governments and financial institutions and companies and central banks?

Isn’t the capacity to borrow only constrained by the ability and desire to lie – especially if we do not have audits and safeguards in place?


Question:

If you were a central banker, how far would you go to “save your country or your Euro or the world?

The excuse that everyone who supported bailouts and stimulus is that we must do EVERYTHING we can to avert a collapse.

They did and it is getting worse with the $600B to $1T the EU is about to put up.

Does the end justify the means?

Does the world really want you to fix the problem or tell the truth?

Just where is the EU going to get $1T to “fix” the sovereign debt problem? IMF? It gets it primarily from the US and we are bankrupt!

We have praised Bernanke for the way he handled the crisis – we praised him for lying!

The ONLY reason for the gold standard was to PREVENT our leaders from lying!!!

We are taught not to lie but we seldom think why not lie. Usually, it is because of the consequences. What if there were no consequences because no one could prove you lied?

In our world, the best liar wins and we wonder why.


So how will you know when it is time to get out?

Bernard Beruke said “The secret to my wealth is always getting in too late and out too early.

Maybe smart money has already gotten out...

Maybe our financial and political leaders all lie...

But it’s for our own good...

Isn’t this really just like the fantasy of Merrill saying they knew the mortgage fiasco would end badly but that they would lay right up until the end and they couldn’t get out in time?

Is this your investment strategy – invest right up until the end and hope that you can get out in time?

My money says that this is exactly what virtually every investor thinks because you cannot ignore the fact that the world is bankrupt...and that our leaders lie.