Niall Ferguson Argues That Empires Can Collapse Very Suddenly

[FIREd]

So am I - I'm thinking of averaging out of my stock mutual funds next week and bond mutual funds the following week - I'd like to get the dividends if it looks reasonable to do so. The bond mutual funds are Corp High Yield funds and Pimco Emerging Markets Bonds - both have been good to me.

May I ask where you will park the cash?

 

[dex]

I don't understand Ferguson's definition of 'collapse'. That we won't be the cops of the world? Suits me. If other nations develop strong economies and lift their citizens from privation, not a problem even if our consumption decreases.

What does concern me is civil disorder resulting from the failure to employ many of our citizens. That kind of collapse worries me. Krugman is focused on that immediate risk.

My guess is his example of what happened to the UK.

The difference or unknown factor it the world interdependence we have now versus what the world was like from the mid 1940s - 1960ish

 

[haha]

Yes, I've read his writings and agree - they lack the depth of Ferguson's presentations.

I don't see how Paul Krugman is Fergusons's nemesis. Ferguson talks about historical characteristics of nations and the implications. Krugman is more about a current problem and how to get beyond it.

They take pot shots at one another.

 

[REWahoo]

They take pot shots at one another.

Just like here on E-R.org...

 

[dex]

May I ask where you will park the cash?

Money market funds - my main concern is capital preservation. If my thinking is correct, the stock market could go down until Dec. I would then average into High Yield Corp Bonds and possibly a little into the Pimco Emerging Market Bond fund.

My thought is that we are in a secular bear trend since 2000. If my memory serves me secular bears have lasted between 13 - 18 years. Some people are talking about a bottom between '13 - 16.

 

[FIREd]

My thought is that we are in a secular bear trend since 2000. If my memory serves me secular bears have lasted between 13 - 18 years. Some people are talking about a bottom between '13 - 16.

My thoughts exactly.

Thanks for the answers.

 

[Independent]

I didn't want to invest 44 minutes in a video, so I looked for a transcript somewhere. Instead, I found this talk by Ferguson http://www.piie.com/publications/papers/niarchos-ferguson-2010.pdf

Which includes:

Milton Friedman famously says, and we have at least one of his pupils in the room,
that inflation was always and everywhere a monetary phenomenon. I want to suggest
to you that public debt crises are always and everywhere a political phenomenon.
They’re consequences of political weakness. Excessive expenditure and insufficient

taxation, failures to make decisions about unsustainable fiscal policies are political; they are not the results of profound economic processes.​

That strikes me as true. I remember the stagflation of the 1970's and a book by Lester Thurow which said we know how to solve our problems, we just don't have the political will. Then, along came Paul Volcker and RR who seem to have had the will, and the stagflation came to an end.

I'd like to believe that we'll find an elected person who's willing to say "tax more, spend less" but I haven't seen that person yet.

My personal financial plans include occaisional self-reminders that I can live pretty economically and still live as well as my parents.

 

[Gearhead Jim]

The "Doom & Gloom" crowd seems to be missing a couple of points:

The U.S. and its economy are still the major economic/military force in the world. That will change some day, and we certainly can see problems ahead. But right now, most other countries seem poised to go down the toilet sooner than us. And yet, they mostly haven't.

Even when a country undergoes an economic crisis, many people manage to live reasonably well and enjoy life. We are so much above subsistance living that most of us have a big cushion before dropping down to the level that most of the earth has been living at for centuries.

 

[Gotadimple]

I apparently can't resist continuing to ask - "what's the point?"

Audrey

To sell his latest book. To garner speaking engagements. To be interviewed by major news shows. To be seen a trusted source of information.

What was the point for Roubini? The same.

Not to take away from the abilities of either Ferguson or Roubini. They do believe what they are espousing. It is intellectually challenging to follow the arguments. It does not provide any of us with protection for events that may/may not happen -- but it does provide the all of us with 'context.'

And context helps me cope with the stresses when they happen.

-- Rita

 

[dex]

I didn't want to invest 44 minutes in a video, so I looked for a transcript somewhere. Instead, I found this talk by Ferguson http://www.piie.com/publications/papers/niarchos-ferguson-2010.pdf

Which includes:

That strikes me as true. I remember the stagflation of the 1970's and a book by Lester Thurow which said we know how to solve our problems, we just don't have the political will. Then, along came Paul Volcker and RR who seem to have had the will, and the stagflation came to an end.

I'd like to believe that we'll find an elected person who's willing to say "tax more, spend less" but I haven't seen that person yet.

My personal financial plans include occaisional self-reminders that I can live pretty economically and still live as well as my parents.

Thanks for posting that link. He talks more about the future in it.

 

[walkinwood]

I would really like it if there was a speaker who offer an opposing view to Ferguson's using the same techniques - history, economics, politics, human nature. But that type of opposing view has not been presented. Usually, what we get is something like 'People in the 60s said we would all starve because of over population but science solved that problem. We will be OK in the future.' I don't know how to classify that type of retort but it doesn't work for me.

My issue is with the past performance of predictions in general. A vast majority of them do not come true. So, for me, looking for an opposing point of view is moot - that may not come true either.

My guess is his example of what happened to the UK.

So what did happen to the UK? It lost its "empire", but the UK is still one of the richest countries in the world, has a strong social safety net and is a heck of a nice place to live in. Was the result so bad? imho, I don't think so.

It's kind of funny, because I live along a dangerous border. It's not dangerous here, but things are perilous not far away. I could see things "blowing up suddenly" along the TX border. That possibility seems a lot more immediate and probable to me than US civilization collapsing soon. Yet I live with it. Audrey

There is a name for this bias that we have as humans, but I can't think of it right now. We worry less about risks that have a higher probability of happening (dying by oneself in a car accident) than those that have greater impact, but a far lesser probability of happening. (dying in an airplane crash along with 300 others)

Thanks for posting that link. He talks more about the future in it.

Thanks. Personally, I don't like Niall's speaking style, but enjoy reading his articles. I have to get to The History of Money one of these days.

 

[Brat]

I have to get to The History of Money one of these days.

It's likely to be a long book, a very ancient Egyptian coin was found in Israel recently.