Eminence Front

The drinks flow
People forget
That big wheel spins, the hair thins
People forget
--The Who

It appears a bailout deal is eminent. Note the rush to have an agreement in principle ahead of the Asian market open tonite. Those who believe bureaucrats operate independent of market influence are sadly mistaken.

Even sadder, of course, is the bureaucratic intervention itself. Some will claim that this event marks the day free markets died. But truly free markets have not been with us for quite some time. We've been distorting markets for years through various forms of regulation and meddling.
However distorted markets become, though, free market FORCES persist. Like any natural system seeking equilibrium, these forces have been building in direct opposition to the cumulative distortions.

To understand the nature of the market forces currently at work, we merely need to study the cumulative consequences of market meddling. Excesses brought about by years of inflationary distortion are what market forces want to correct. If unshackled, we know exactly what market forces would seek to do. They want to reduce asset prices, wipe out bad credit and debt, and encourage savings.

This, of course, is precisely the opposite of what bureaucrats want to see. So they craft even greater interventions in attempts to keep market forces at bay.

But market forces are patient and unrelenting. And the more interventionists meddle, the greater the potential energy built into the market's ultimate response.

It's natural law at work. The consequences of this potential energy turning kinetic seem increasingly ominous.

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