How was the 16th century English navy able to resist invasion and domination by Spain, an empire with at least ten times the money and resources? Navies are vastly expensive to maintain at the ready, even today.

The answer was by consistent long-term investment in logistics and support structure: yards, dry-docks (an English innovation), victualling, communication etc. A desperately poor Elizabethan England was the first European power to develop (by necessity) these systems and reached the point where her fleet could be mobilised within 3 weeks. It couldn't stay out long, but it didn't have to. Spain, despite its wealth, required a 3-month bubble of disorganised chaos to leave port - if it was lucky.

To survive the English naval structure had to maintain its "fundamentals" whereas the Spanish could float along pretty much alright (or so it seemed for they were in fact in serious hock) on the back of the easy rape of gold and silver from the New World. In other words, the English stuck to the bauche - old French for job - whilst the Spanish by comparison débauched. History has generally shown sticking to the fundamentals to be a sounder (though less short-term fun) method. The sun never sets etc etc.

As I struggle to return from my own holiday débauche my jaw is even slacker than usual watching the quantity of monies at work for no useful "fundamental" purpose. There is a gold and silver rape of sorts going on in the sucking of equity out of the markets; punters are trading on rumour; some analysts have become M&A hawkers of the snake-oil variety; over-estimation of the "E" side of PE is frequently at the piss-take level; and many sales forecasts have taken on a progression divorced from capacity or history. To cite but a few signs.

Is it really a feat of intellectually virtuosity to argue that general financial distress will follow current general excesses? Were Kitchin, Kondratieff, Juglar, Kuznets and Minsky (amongst others) all entirely wrong about the existence of business/economic cycles? Is it different this time? Has cheap Asian production definitively throttled price pressure to the extent Central Banks are able to débauche currencies without consequence? Would a 2007 soft landing truly mean an all clear rather than simply be noise on the way to a fuller unwinding?

Perhaps, and interest rates are still historically and ridiculously low. But without doubt the distress-tipping rate point has trended lower also on the coat tails of excessive leverage, speculative interest and marginal deals.

Easier money remains the friend capable of building us a sound fundamental existence. Yet persistently easy money will eventually leave us feeling particularly rough, ragged and débauched - as the port tart the morning after the fleet sails knows.

Of course, this is all wrong right now - bordello buyouts are in full-swing - so enjoy the euphoria and overtrade while the going is good.

And Happy New Year to you too.

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