Posted To Mish Shedlock’s Blog 05/27/2017

You’re absolutely right that an unregulated currency is inevitably inflationary, but unfortunately Gold is not the answer to such regulation. Why? Because the deeper insight into the economic system is that it now inherently creates a higher rate of flow of total costs than it does a rate of flow of individual incomes with which to liquidate such costs….and so leaving the economy entirely alone as libertarians and Austrians would like to do…will merely inflict more and more pain and still inevitably result in economic collapse…exactly like all forms of Keynesianism etc. liberal economic theories will result in because they don’t actually see or deal with the real problem either which is the ratio above. Throw in the fact that AI is a (just beginning) disruptively diminishing force on aggregate individual incomes and the only actual and sane solution is a new monetary and financial paradigm of Gifting intelligently and rationally integrated into profit making systems.

You’re a very astute observer of trends and a knowledgeable theorist Mish. But I think you’re smart enough to even perceive a new paradigm. You’re recognition of the trends in auto ownership and its economic effects tells me this. Paradigm changes are hard to perceive because the nature of an old paradigm is that it is always habitual and hence goes almost entirely unexamined. Hence any new paradigm is always “absurd” and laughed off….right up to the time that it becomes the new absolute truth. Just consult history for confirmation of that.

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