Why Do Smart People Make Dumb Decisions?

Why Do Smart People Make Dumb Decisions?

One of the most successful basketball players of all time was Wilt Chamberlain [60’s/70’s]. However he was a terrible free throw shooter, preferring like many, to put the ball above his head to throw. However, when he did underhand shots, his success rate increased from 38% to 61%. But because he regarded these as “sissy” shots, he abandoned underhand shots, sacrificing many points.

In a similar vein, there is no means of avoiding a final collapse of a boom brought about by credit expansion via ongoing Quantitative Easing ie printing money out of nothing. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved.

To ‘voluntarily abandon further credit expansion’ means letting natural market forces bring down stock, bond and real estate prices from their current bubble highs — thereby vaporizing a lot of paper wealth. It means widespread layoffs as inefficient companies that have been kept alive by nearly free access to nearly unlimited credit have to start actually generating profits if they can. It means living below our means today, so that we can sustainably live within them tomorrow.

Instead, they simply double down on the policies that got us into this mess in the first place, claiming that their efforts to date just haven’t been big enough yet to succeed. And they do this with the full support of our politicians, who want to avoid any unpopular austerity measures because they care much more about getting re-elected than the hard work of actually addressing our nation’s structural problems. So interest rates go even lower, asset bubbles grow even higher, the wealth gap extends even wider, and the risks of a “total catastrophe of the currency system” become even more extreme.

We will continue to see more wrong choices being made for the wrong reasons until the entire systems fails.

Zero Hedge

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