Several years ago, I happened to be sitting next to a high school defensive line/football coach during a Cowboys game. Well into the 2nd quarter, on a non-crucial play, with everything looking to me like it had looked throughout the game, the coach said "Number 89 is about to get an interception".
Sure enough, #89 read the quarterback's mind, and placed himself in the exact spot to come down with the football. I looked at the coach with a new level of respect, and asked him if he'd like to go to Las Vegas with me sometime.
The guy laughed it off, and said it was just a hunch. The QB was getting predictable, he was signalling his intentions with his play-calling and body language, #89 was showing signs of picking up the patterns, and on and on.
On a similar subject, I've read about baseball journalists who will sometimes get a hunch, stand up in the pressbox, and say "Home run, left field bleachers !!" when the pitcher is still in his windup. A lot of the time, the batter launches one into the left field bleachers. The writers just have hunches.
Ok, enough of the throat-clearing.....
Here's my hunch.
The U.S. is 15 trillion in debt.
The yearly deficit is around a trillion and a half.
Our "leaders" are extending the spending spree by two week intervals, rather than face the cuts.
China is going to figure out really soon that Washington has no adults in the room, and that we aren't going to pay off our debts with anything resembling real dollars.
Combine that with some turmoil in the Middle East and a supply chain disruption in Japan, both of which are going to echo throughout the manufacturing and shipping sectors of the economy. That's gonna hurt.
I think we're going to have another major slowdown, this time accompanied by mega-inflation. With reduced tax revenue, the only legal way that Uncle Sam will be able to meet pension, Social Security, Medicare, Medicaid and subsidy obligations is to print money.
Most of us know this is going to eventually happen, right? So I'll call it.
Major economic meltdown by September 1, 2011. You heard it here first.
Y'all have a good Monday !!!!
Sure enough, #89 read the quarterback's mind, and placed himself in the exact spot to come down with the football. I looked at the coach with a new level of respect, and asked him if he'd like to go to Las Vegas with me sometime.
The guy laughed it off, and said it was just a hunch. The QB was getting predictable, he was signalling his intentions with his play-calling and body language, #89 was showing signs of picking up the patterns, and on and on.
On a similar subject, I've read about baseball journalists who will sometimes get a hunch, stand up in the pressbox, and say "Home run, left field bleachers !!" when the pitcher is still in his windup. A lot of the time, the batter launches one into the left field bleachers. The writers just have hunches.
Ok, enough of the throat-clearing.....
Here's my hunch.
The U.S. is 15 trillion in debt.
The yearly deficit is around a trillion and a half.
Our "leaders" are extending the spending spree by two week intervals, rather than face the cuts.
China is going to figure out really soon that Washington has no adults in the room, and that we aren't going to pay off our debts with anything resembling real dollars.
Combine that with some turmoil in the Middle East and a supply chain disruption in Japan, both of which are going to echo throughout the manufacturing and shipping sectors of the economy. That's gonna hurt.
I think we're going to have another major slowdown, this time accompanied by mega-inflation. With reduced tax revenue, the only legal way that Uncle Sam will be able to meet pension, Social Security, Medicare, Medicaid and subsidy obligations is to print money.
Most of us know this is going to eventually happen, right? So I'll call it.
Major economic meltdown by September 1, 2011. You heard it here first.
Y'all have a good Monday !!!!
2 comments:
Rather unfortunate time to use the term "meltdown."
Yes, I expect some form of slowdown or double-dip. All of the strength has been artificially propped up.
There is clearly more strength in the economy than last year, but there is considerable weakness in many key sectors.
Construction is down for the count. We won't see pre-recession levels for a decade.
Manufacturing is picking up a little, but I have no expectation of sustainability.
Business services, mostly temporary employment, is doing very well. Usually these translate into permanent jobs, but not necessarily now.
Retail is doing better, but gadgets never pulled an economy out of recession.
Education and health, always a winner, is humming along.
The 600 lbs gorilla in the room is China. Their economy is superheating and they can't control it. They've raised their required reserve ratio for banks, chopped off lending, imposed price controls. The economy is slipping through their centrally-planned fingers.
They will have to make a choice between maintaining growth and fighting inflation. Either way, they're going to have to surrender some of their control over export promotion.
This will cause our longer term treasury yields to climb, increasing our financing costs (debt and deficit).
Fiscal austerity is in order or we will be facing an incredible debt burden. We won't actually default, but we may technically default through inflation. If we slam on the brakes too hard, we're in for quite a stir. We can and should gradually unwind both our monetary easing and our excessive spending, but we have to start now.
We can afford and should have a small temporary tax increase over a broad base. Unfortunately, there's nothing as permanent as a temporary tax increase. It's too bad we can't chain the steering wheel on that one.
I could have us out of halfway out of debt in 8 years, easily. There's so much waste in government that could go into real production. Wages, though, would have to come down for many people.
God help us if we enter another stagflation environment. Obama will be Carter II (if he isn't already).
Nick,
As usual, thanks for the insight. When I grow up, I want to go to school where you did.
I think J. Carter was Hope 1.0 We're seeing the 2nd incarnation.
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