A booby-trapped world for investors?

I've subtitled this blog "Investment in a World Gone Mad." While that madness is by no means confined to the investing environment, it's what we have to contend with if we're to get through crises to the left of us, crises to the right of us, crises in front of us.

Paul Farrell has an interesting take on what we're up against. He's the only commentator at MarketWatch I read regularly. Well, usually. Mmmm, fairly often. He's a big picture man. Determinedly pessimistic -- unfortunately, I'm afraid his pessimism is well founded.

"Capitalism is committing suicide and destroying America too," Farrell says. He cites 10 "bubbles" he thinks we will soon be able to add to the dotcom bubble and the housing bubble. For instance:

2. Government Bubble isolates Washington from real America

When will this bubble explode? In a Time feature the “Bubble on the Potomac,” Andrew Ferguson warns, America’s massive debt has created “new affluence flooding the nation’s capital” making Washington society “a world apart from the country it governs,” adding that “this insularity has consequences for the rest of the country.”

The average American may be struggling, but government is “for sale,” in this center of the trillion-dollar government-contracting business, where the federal budget is sold off to the highest bidders. Lobbying is the city’s “biggest business,” with more than 20 lobbyists for every elected official, all publicly advertising the huge benefits they generate, often hundreds of times over an “investment” in their lobbying fees. 

[Link: MarketWatch]

This is bang on. I live in the Washington area and it's like the world of Louis XIV: a power center and world of courtiers. I suppose I am a beneficiary -- although unconnected with the government, I have a job, which I probably wouldn't if I lived somewhere else.

The Washington elite do inhabit their own bubble, where the issue is how the spoils are to be divided. In reality, the drill bit has long since failed to bring up pay dirt -- America is a dry well. Add tax on top of tax, and it's not enough if the tax base is declining. 

Doesn't matter to our Mandarins. They pray to two gods: Borrowing and Money Printing. As long as their gods don't fail them, their reign is secure.

But their gods are deceivers. Even if the U.S. is in the "least bad" shape of any major Western country and for the present seems like a safe harbor, sooner or later no one will lend to Madhouse, Inc. And printing more and more currency backed only by the promises of a government operating on the sailor-on-shore-leave principle will eventuate in a currency collapse.

Then the bubble will burst and no mistake. Washington's silky set will taste the bitterness of life in the rest of the nation they have sold out.

Keywords: [MarketWatch] [Paul Farrell] [Washington]

Ghost Money's author does not claim to know what he's talking about. He is not an investment advisor. This site is for entertainment, if it can even manage that.