"

Thanks.  I nearly drowned when I was shoved overboard by some vindictive psychopath, but somehow I managed to swim back on board S.S Titanic.  Ironic really, given what I see coming up ahead.  Perhaps I should have saved myself the trouble, and just stayed in the icy water.

Your comments are interesting and may well be correct, however they don't really address the point I was making, regarding the gross, almost embarrassingly obvious, errors in the ""academic geek created/mindless computer driven"" financial models currently used around the world.  The most similar ""theory"" to the one I've pustulated above comes out of  this piece from ""The Prophet"" Robert K. Landis, where he predictes a combined deflationary/stagflationary financial crisis.  Ludwig von Mises obviously had similar ideas, but no one has really done the ""hard"" financial modelling on this Austrian School theory, and tried to collect long-term historical data, tracking changes in debt levels over time and compared this to volatility levels (the frequency and severity of so-called ""black swan events"") in financial markets.  My hypothesis is that with increasing margin lending and debt levels, you will see bifurcating bell curve returns (i.e. extremely high returns or extremely negative returns, with few data points in the range of the long term mean during these periods of heavy net indebtedness).

Landis comes close, but still no (Cuban) cigar.  Anyway, his piece is very topical right now, and made for interesting bedtime reading, tucked away here as I am in my tiny little third class cabin, far far away from the ""mad money"" crowd.  "