The Best Article to Read about GFM

Everywhere you turn, you see Madeline Albright. She's standing in the median. She's in your cup of coffee. She's seated at your dinner table. She's using your bathroom.

You change your behavior. You go places where she hasn't appeared yet. You begin to distrust your eyes. You ask your friends what they're doing to avoid her. You do it too.

Tuna Melters, the most important information you have every moment of every day is what you see. You are constantly making decisions based on what your eyes tell you. When horrifying phantom Madeline Albrights start showing up everywhere, you have no choice but to mind them. Your behavior becomes absurd.

The most important information in an economy is pricing. Prices give us instant information about the perceived values of anything that's up for trade. Prices govern the flow of capital, sending money into channels of greatest value.

Loose money screws up the pricing system. Since the early 90's, and much more acutely from 2001 - 2004, the Federal Reserve has flooded the economy. The pricing system, particularly the price of money as expressed in the interest rate, has been nonsense, and our behavior has become absurd.

There's a lot to ponder right now. What's going to happen next? What do I do with my money? How can I protect myself?

More important than all of this is: why did this happen and what steps should the citizens of the world take to prevent it from happening again?

Take a read.

"Nothing is more vital to capitalism than capital, the financial seed corn dedicated to next year's crop. Yet we, believers in free markets, allow the price of capital, i.e., the interest rate on loanable funds, to be fixed by a central committee in accordance with government objectives. We might as well resurrect Gosplan, the old Soviet State Planning Committee, and ask them to draw up the next five-year plan."

Here's the rest:

http://online.wsj.com/article/SB122273029076687929.html