grim but credible forecast?

[kevink]

I wish I could say that I don't find this assessment of U.S. debt and market machinations credible. The author certainly has an impressive background. Makes Nassim Teleb (Black Swan) look like Norman Vincent Peale. Thoughts?

Collapse At Hand |

 

[ziggy29]

My only thought is that between dependence on foreign oil and on foreign purchasers of debt, the republic is playing with fire and is allowing itself to be vulnerable to foes who could take us down without firing a shot. It may not come to that and obviously I hope it doesn't, but it is a reminder that being economically dependent on semi-hostile foreign governments is probably not a good idea.

 

[frayne]

What is one to do to protect his/her assets, investments, etc., buy gold, stock up on canned goods and ammunition ?

 

[eytonxav]

I like his last paragraph and recommendation to take those leveraged gangsters out of the game. Maybe time to write our representatives.

 

[devans0]

Heard the one about the boy who cried bear? I don't trust doomsayers or goldbugs for reality checks.

 

[brewer12345]

My only thought is that between dependence on foreign oil and on foreign purchasers of debt, the republic is playing with fire and is allowing itself to be vulnerable to foes who could take us down without firing a shot. It may not come to that and obviously I hope it doesn't, but it is a reminder that being economically dependent on semi-hostile foreign governments is probably not a good idea.

Have you been following domestic oil production trends? I would stop worrying about dependence on foreign oil.

 

[kevink]

What is one to do to protect his/her assets, investments, etc., buy gold, stock up on canned goods and ammunition ?

My thoughts exactly when I read the article. It does make you want to have a paid-for place to live and if possible a big chunk of your assets invested in something generating income that's outside the reaches of the markets, be that rental properties, a privately-held business, whatever.

 

[MichaelB]

Or maybe the guy is just a bit over the top and has a flair for the dramatic.

 

[EvrClrx311]

The best point he made, IMO:

"Everyone who purchases a Treasury bond is purchasing a depreciating asset."


Much of the rest is just the sky is falling mentality that has slowly crept into the minds of more and more Americans each year that the economy stalls.

Or maybe the guy is just a bit over the top and has a flair for the dramatic.

+1

 

[Midpack]

It's interesting how many "expert" books, articles, video segments there are about all things political, economic, investing that go to great lengths to describe how bad things are - only to end with a lame or no credible solution. Times are tough and a lot of institutions/people have done a lot of bad, immoral if not illegal things to bring us here (few if any of us are entirely without fault) and no one is doing much if anything about it, I think we all get that. I've read several 200-300 page books lately describing how we got into this mess, that ended with solutions that even the author gave long odds for whatever reason. The link is another example, the solution in the last paragraph is laughable.

Anyone can highlight problems, I'd rather hear credible solutions that we can debate on their merits. Those "expert" books, articles, video segments seem very few and far between...

 

[marko]

I dunno. I'm old enough to realize that if I had reacted to every 'the end/crash/wipeout is near, I'd have gone nuts.

Remember the 'Over Population' problem? We were supposed to be killing each other for food by 2000; then there was "Global Cooling", and lets not forget the gas shortage 30 years ago...we were all going to be riding bicycles and huddling in the dark.

Seems that the USA/world has some built in self-correcting aspect to it; never is as good or bad as the 'experts' predict.

 

[Midpack]

I dunno. I'm old enough to realize that if I had reacted to every 'the end/crash/wipeout is near, I'd have gone nuts.

Remember the 'Over Population' problem? We were supposed to be killing each other for food by 2000; then there was "Global Cooling", and lets not forget the gas shortage 30 years ago...we were all going to be riding bicycles and huddling in the dark.

Seems that the USA/world has some built in self-correcting aspect to it; never is as good or bad as the 'experts' predict.

Self-correcting like the Han & Tang Dynasties of China, the Roman Empire, the Mayans, the Ancient Egyptians, the Aztecs & Incas, Ancient Greece, the "American" Indians, the British Empire (colonies), the USSR for just a few examples?

 

[haha]

and lets not forget the gas shortage 30 years ago...we were all going to be riding bicycles and huddling in the dark.

Instead all we are doing is paying $4.30 /gal for our plentiful gas.

Ha

 

[ziggy29]

Have you been following domestic oil production trends? I would stop worrying about dependence on foreign oil.

But if we continue to treat a finite, nonrenewable resource as essentially limitless, production increases aside it's still not exactly a "warm fuzzy".

 

[marko]

Self-correcting like the Han & Tang Dynasties of China, the Roman Empire, the Mayans, the Ancient Egyptians, the Aztecs & Incas, Ancient Greece, the "American" Indians, the British Empire (colonies), the USSR for just a few examples?

Well, you're making my point: for millenia people have been saying that 'the end is near' but it never seems to materialize. (we can wait for 12/21/12 and see what happens).

The 'empires/cultures' you name have changed in context, but the Chinese, Italians (Romans), Greek and Russian PEOPLE are still with us, living, working (well, not the Greeks <grin>) and interacting in the world.

My personal view is that the USA (culturally) died several decades ago but through it's own inertia just hasn't fallen down yet...but we venture on today with our individual lives.

Therein is the 'self correcting' piece. It's never as bad/apocalyptic as 'they' say and somehow, even though things/names change, they keep running through tweeks and 'cultural shepard moons' rather than end of the world scenarios.

Again, (just an example) by now we were supposed to be riding bicycles and reading by candlelight because 'all the oil would be gone'....and suddenly we start finding new oil fields and new methodologies to access huge, previously untappable stockpiles.

 

[Midpack]

Well, you're making my point: for millenia people have been saying that 'the end is near' but it never seems to materialize. (we can wait for 12/21/12 and see what happens).

The 'empires/cultures' you name have changed in context, but the Chinese, Italians (Romans), Greek and Russian PEOPLE are still with us, living, working (well, not the Greeks <grin>) and interacting in the world.

My personal view is that the USA (culturally) died several decades ago but through it's own inertia just hasn't fallen down yet...but we venture on today with our individual lives.

Therein is the 'self correcting' piece. It's never as bad/apocalyptic as 'they' say and somehow, even though things/names change, they keep running through tweeks and 'cultural shepard moons' rather than end of the world scenarios.

Again, (just an example) by now we were supposed to be riding bicycles and reading by candlelight because 'all the oil would be gone'....and suddenly we start finding new oil fields and new methodologies to access huge, previously untappable stockpiles.

In the context of this thread, 'grim but credible forecast' which implies what we'll experience in our lifetimes, I'm not sure the ancients would agree with self correcting in their lifetimes. It was indeed "as bad/apocalyptic" as it could be for them, in their (our) lifetimes...

 

[marko]

In the context of this thread, 'grim but credible forecast' which implies what we'll experience in our lifetimes, I'm not sure the ancients would agree with self correcting in their lifetimes. It was indeed "as bad/apocalyptic" as it could be for them, in their (our) lifetimes...

I believe one has two choices: 1) deal with it/figure it out/adjust to it or 2)shoot one's self in the head out of desperation.

As Gibson observed: "The future is already here. It's just unevenly distributed."

Some people are already living in what this entire country will become in 30 years; some will die before that happens; some will avoid it altogether.

Personally, I only have to worry about the next 25 years and I just can't forsee a change so dramatic and so unprecedented (unless you want to play the Mayan Calendar game) that I'm going to lose sleep over it.

 

[marko]

Maybe I'm just thinking too broadly and abstractly.

 

[Free To Canoe]

Instead all we are doing is paying $4.30 /gal for our plentiful gas.

Ha

Still the second cheapest liquid.

 

[Hamlet]

It's starting to look like the energy stuff is all going to turn out ok (aside from the global warming repercussions).

We've got enough oil and natural gas to make it through the next few decades, and its starting to look like the renewable sources will be cost effective soon.

The cost of solar power cells have been dropping rapidly. Their pricing curve vs time is starting to look a little like Moore's Law. It looks to me like it is going to be cheaper to generate power with solar cells in the Southwest that with most conventional sources within a decade.

When I was in engineering school in the early 90s, solar power seemed like a bad joke to me. Now it is on the verge of being the most cost effective choice in well-suited environments.

But if we continue to treat a finite, nonrenewable resource as essentially limitless, production increases aside it's still not exactly a "warm fuzzy".

 

[ziggy29]

Still the second cheapest liquid.

At its current price locally, gasoline is pretty much interchangeable with milk -- except that I wouldn't drink gas or put milk in my fuel tank...

 

[Free To Canoe]

I wish I could say that I don't find this assessment of U.S. debt and market machinations credible. The author certainly has an impressive background. Makes Nassim Teleb (Black Swan) look like Norman Vincent Peale. Thoughts?

Collapse At Hand |

Working for Reagan and being on the wrong side of the Laffer curve are not impressive credentials in my opinion.

Before the sky falls completely let's look at what was said.

" A rise in interest rates, which must come sooner or later, will collapse the price of the bonds and inflict capital losses on bond holders, both domestic and foreign."

The rise in interest rates will only come when more prosperous times cause the return of inflation. A gradual increase increase in interest rates will cause bonds to decrease, not collapse. Flair for the dramatic.

"The question is: when is sooner or later? The purpose of this article is to examine that question."

When is sooner or later? Precious minutes of my life were wasted wading through all of his doomy drivel about the various financial crises with which we are familiar. How are they connected to each other? How do they answer the "sooner or later" question? They aren't and they don't.

Freshman English F for you.

 

[Free To Canoe]

At its current price locally, gasoline is pretty much interchangeable with milk -- except that I wouldn't drink gas or put milk in my fuel tank...

I was thinking of crude. Bet you wouldn't put a straw in that one either.

 

[Brett_Cameron]

Charles Dickens said of the United States that if its citizens were to be believed America ‘always is depressed, and always is stagnated, and always is at an alarming crisis, and never was otherwise.’

Nothing to see here folks, move along.

 

[kevink]

Working for Reagan and being on the wrong side of the Laffer curve are not impressive credentials in my opinion.

Before the sky falls completely let's look at what was said.

" A rise in interest rates, which must come sooner or later, will collapse the price of the bonds and inflict capital losses on bond holders, both domestic and foreign."

The rise in interest rates will only come when more prosperous times cause the return of inflation. A gradual increase increase in interest rates will cause bonds to decrease, not collapse. Flair for the dramatic.

"The question is: when is sooner or later? The purpose of this article is to examine that question."

When is sooner or later? Precious minutes of my life were wasted wading through all of his doomy drivel about the various financial crises with which we are familiar. How are they connected to each other? How do they answer the "sooner or later" question? They aren't and they don't.

Freshman English F for you.

Yeah I tend to agree with you after reading more about this guy's background and also finding out that he's been doing the same sky-is-falling dance for decades. He has some impressive credentials but his steadfast advocacy of supply-side economics alone ought to raise some red flags.

Since I'm invested in the Permanent Portfolio which has half of its assets in Treasuries and a quarter in gold I shared the article with one of the leading proponents of that approach. His comments on the Roberts article may be of interest to some:

http://crawlingroad.com/blog/2012/06/06/paul-craig-roberts-on-the-manipulation-of-the-treasury-rates-and-gold/