Peter Coyne

[This article originally appeared in The Daily Reckoning on July 11, 2013]

“You guys seem to have forgotten how the economy nearly collapsed,” writes one indignant reader. “What kind of freedom do the tens of millions of Americans living in abject poverty have? When the government of the people tries to ameliorate the suffering and level the playing field, ‘they’ start whining about how the government is taking away their wealth.”

Ha. Ha. Ha!

After forecasting a demographic meltup, here, a housing collapse, here, a debt crisis, here, we clearly failed to notice that the economy nearly collapsed.

How did we miss it?

As to the rest… allow us to further confuse you with an allegory:

“Long ago, in early August of 2007, a trillion-pound Yeti named Sun Po Tai descended on Lower Manhattan. The monster, hungry, began eating all the pigeons between East 14th Street and Battery Park. Perhaps you’ve read the news accounts…

“Two investigators were summoned by Mayor Bloomberg to assess the crisis: one a Nobel laureate from Princeton, the other a lowly scribe for The Daily Reckoning.

“The professor arrived early and saw the pigeon population was dwindling… soon the Yeti would eat something a bit more… human. It would be devastating.

“So in an effort to ‘ameliorate the suffering,’ or at least the potential suffering, of the good people of Wall Street, the professor filed a recommendation with the mayor… and followed up with a barrage of newspaper columns suggesting that the government hold a $152 billion bond drive to purchase more pigeons for the Yeti to eat.

“‘Maybe he’ll leave once he’s had his fill,’ the professor reasoned, quite reasonably.

“The people rallied, the bonds were sold — some were bought by willing partners overseas — the pigeons were bought and the Yeti ate them one by one until they too were all gone.

“But Sun Po Tai didn’t leave…in fact, he now weighed 2 trillion pounds.

“The professor stuck to his guns. He filed a new recommendation and wrote more Op-Eds and encouraged the purchase of even more pigeons: ‘$85 billion worth per month… that ought to do it. The central bank could even buy them up. Whatever it takes to get this the monster to leave.’

“Some people thought, Hmmn… the Yeti doubled in weight pretty quickly… are we just feeding the beast? But the professor wrote for a prestigious column in the city’s paper… and he had a Nobel Prize pendant around his neck. ‘He must know what’s going on behind the scenes,’ they reasoned. So they shrugged and went along…

“Around that time, the lowly Daily Reckoning scribe finally showed up. He got a look at the pigeon carcasses in Battery Park. Saw the footprints Sun Po Tai had left in the playground near Ground Zero, where his kids used to play. Not knowing what else to do, he stepped into an Irish pub called Mick’s for a glass of pinot grigio.

“The only seat available happened to be next to a bespectacled fellow who resembled the old cartoon character Mr. Magoo. The strange man had his nose in a pint and was mumbling something about Kondratiev waves and the True Money Supply

“‘Drat!’ the scribe heard him say. ‘Savings represent the future!’

“‘What’s troubling you, mister?’ our friend the scribe asked, concerned about his fellow man, as always.

“‘It’s all a big mistake,’ Magoo grumbled back. ‘One we can’t escape.’

“‘What is… the Yeti?’ the scribe asked. Then he wondered aloud, ‘Has anyone found out where it came from in the first place?’

“‘Yeah,’ Magoo replied, brandishing a name badge from the Department of Health and Human Services. ‘An experiment gone awry… a government bionics program designed to manage the risk the pigeons posed to public health. Little buggers crap all over the place.’

“‘Hmnn…’ The scribe took a sip of his wine. ‘But aren’t we now printing money…to buy debt…to buy more pigeons?’

“‘Exactly,’ Magoo grumbled, taking a sip of his beer. ‘We would have been better off just leaving them alone…’ His voice trailed off.

“‘Hmmmn…’ The scribe left the city.”

We’ll give you a few moments to savor the irony.

Regards,

Peter Coyne
for The Daily Reckoning

P.S. The severity of our current financial crisis is only made more dangerous by the unfortunate leaders who are trying to fix it. But that’s why we write the Daily Reckoning. To help you make sense of it all, and hopefully offer you a solution or two. Readers of the Daily Reckoning email edition — where this piece originally appeared — have regular opportunities at real ways to protect and grow their wealth, every day. Sign up for the DR email for free, right here, and start receiving those offers for yourself.

Peter Coyne

Peter Coyne is the managing editor of the Daily Reckoning and Jim Rickards' Strategic Intelligence. He received his degree in economics and political science from Loyola University Maryland where he studied under the Austrian economist, Tom DiLorenzo. Before joining Agora Financial, Peter worked in Congress for Dr. Ron Paul until he retired in 2012.

  • Anon

    When
    they have no more money to feed the pigeons the Yeti will starve and then the
    few people who kept pigeons locked up in their apartments will let them out and
    the pigeons will again multiply.

Recent Articles

Got Tech Stocks? Sell These Flops Now…

Greg Guenthner

The latest victim of the crude rout is none other than the stalwart tech stocks. These are the go-to trades that have held up all year long. I'm talking about stocks like Google, Yahoo! and Microsoft. Like I said before, these aren't no-name stocks you're seeing drop more than 10% from their highs last month.


Three Time Bombs in Your 401(k) and How to Disarm Them Now

Dave Gonigam

By the time you do… Kaboom! It’s too late. They’ve already blown up your retirement. There are three time bombs the mutual fund industry has planted within your 401(k). By the time you’re done with this article, you’ll know how to identify them. And, more importantly, how to disarm them. Dave Gonigam has the scoop...


A Strong Dollar’s Not All That Bad

James Rickards

On the eve of the FOMC’s meeting announcement, our CIA financial strategist suggests, “To beggar thy neighbor or not… that is the question.” Read on to find out why having a strong dollar is good for you, but not so good for the Fed...


The Great Unraveling of the Commodities Super Cycle

Greg Guenthner

There's an entire parade of metals and energy plays running off the side of Commodity Mountain like a herd of lemmings. Gold cracked $1,200 after a $30 drop. Silver cratered more than 5% on the day. Copper fell another 2% Natural gas is down. Heating oil is down. Oh, and our main culprit, oil, coughed up another 4%. And that's just yesterday's losses...


Same Currency War, New Battle Phase

James Rickards

The current global currency war started in 2010. Our own Jim Rickards published his book, Currency Wars, soon after that. One of the points that he made in the book is that the world is not always in a currency war. But when we are, they can last for a very long time. They can last for 5, 10, or 15 years, sometimes longer. Read on to learn the latest battle phase of the current currency war...