I began publishing my monthly newsletter The Bob Livingston Letter™ (subscription required) in 1969. The following is an excerpt from the December 1998 issue in which I warned of the danger of the dot.com bubble. Just 18 months later, the bubble burst. By the way, we are reaching this same point once again thanks to QE.
Our economic system is simply a confidence game. Our credit-based monetary system requires confidence to remain in a positive mode. Confidence is a perception of reality no matter what reality actually is. When money is credit, it is 100% confidence. Inflation can turn on a dime into black hole deflation.
Deflation and depression destroy confidence and quality of life deteriorates before the washout process is complete.
My purpose here is to warn that a deflationary collapse lies dead ahead. Being aware that even the possibility exists and making some preparations is not the biggest mistake you can make. Panics and crashes never hurt those who over prepared or prepared too soon. But they ruin those oblivious to the times. Yes, what you don’t know can be fatal.