Debt Crisis

Flawed Economic Policies

Things are getting interesting on the economic front: Obama is taking a hard line on taxing the “rich” while the GOP is railing against stimulus. Basically, both sides are suggesting policies that will make things much worse. Keynes proposed deficit spending in a downturn coupled with tax cuts. He did not propose tax increases nor did he propose deficit spending that lasts decades. These were self-interested tweaks made by our…

Patience As the Crisis Unfolds

All bears are not created equal. Some are deflationists, some are inflationists. Some predict the end of the world on any stock market correction, some are buyers on corrections. While I’ve warned that the future is very bleak, I’ve also always cautioned that you need to get the timing right. The big crisis is NOT here yet. Let Europe collapse first, then let’s start talking. I’m sure the panic surrounding…

The Stupidity of Raising Taxes in a Downturn

As I’ve said repeatedly, this crisis will make people’s head spin. The latest mind-boggling move is the rise in Treasuries following S&P’s downgrade. At first this is confusing, but remember this is a global crisis, and if global capital panics, only the Treasury market can handle all that capital. So crudely, Treasuries rise. The talking heads on TV misinterpret these moves as a reflection of global confidence in Treasuries, and…

Government Stupidity Now Moving Markets

Gold up $70, the Nasdaq down 4%, the VIX up 20%: these are the effects of government stupidity. Our leaders, most notably President Obama, had a golden opportunity to inspire confidence in Americans by coming together on a debt deal that made sense. Instead, politicians confirmed  they are bungling buffoons that have no clue. This is not a drop in confidence, this is a collapse in confidence. There’s a difference….

Be Patient With the Trends

Those of us who have seen the writing on the wall for the U.S. economy tend to wonder why the real crisis hasn’t arrived yet. Although I see the train wreck ahead, I caution you all to be patient. People don’t appreciate what it means to have the world’s reserve currency. People don’t realize how large our economy is relative to the rest of the world. When I wrote in…