Taxi Wars and the US Economy

London was lively. Restaurants, bars, museums…everything was hopping. In Hyde Park, a pair of sweaty Frenchmen completed a game of tennis. A group of people drank tea at a café. Women dressed head-to-toe in black, sat on the grass, enjoying the sun. An extended family had put out a blanket and a hookah pipe; picnicking in the park. A pair of tall Russians walked by.

It is easy to get around in London. You just go to the street corner and raise your arm. Generally, a taxi will stop soon.

Paris is another matter. If you want a cab, you have to find a taxi stand. Then, likely as not, there won’t be any taxis available.

And today, the taxis have gone on strike. Which is a nuisance to anyone who is going to the airport! Oh, and the trains say they are going to stop too, in sympathy with the taxi drivers. And just for good measure, the taxistas have threatened to block major roadways…notably, the road to the airport.

This is not the way to make friends and boost business. All over the city, people are considering their options… Walk? Get a motorcycle? Carpool? Your editor’s resourceful wife decided to open an account with Uber, an alternative taxi system. If we like it, the regular taxi drivers will have lost a customer.

Meanwhile, you remember our prediction for the US economy? First Tokyo, then Buenos Aires. That was our guess when the crisis of 08—09 began.

The idea was simple: the crisis would lead to economic stagnation à la Japan… which would eventually be resolved by government money-printing and inflation.

Held up against the facts, that prediction is an obvious forgery. It is correct in the broad outlines of the last six years. But the details are missing…including some very important ones.

Unlike Japan, the US stock market rallied. The bounce that we thought would be temporary and small turned out to be huge…and continues until today. Investors who took our advice successfully avoided one of the great bull markets of history. Will it last? Is it real? Who will have the last laugh? We don’t know. But for the moment, you will hear no satisfied giggling from this side of the trade.

On the other hand, the economy did track Japan and continues to do so.

Read the rest of this article at The Daily Reckoning