Stockman’s key assumption is contained in his hypothetical “if the bond drops by 2%”. I am not convinced that this will happen in the near future. The Fed and its allies have so many tools at their command, expanding every year, that it may be many years before a failed auction. Of course this is just lengthening the rope by which we will be hung and the pain will be that much greater for the delay. They are destroying the future. Meanwhile, and that could be a decade or so, we will all need to find productive things to do. As for investments, Stockman is right that everything is overpriced, with the exception of precious metals.
Yes...I've seen this 10 year time frame used before.
I find Stockman's comments most interesting because he seems to be placing a shorter (under two years) time until TSHTF.(as I read it)
Albeit, I agree with your 'kicking the can' down the road for years...with worse results but the conclusion the same.
I expected a failure of bond auctions by 2010. I didn’t take into account the fact that every other financial system(large enough to count) in the world is in worse shape than ours. Large investors have no where else to go, short of hiding money in mayonnaise jars.
The EU is fixing to collapse....China’s real assets are in US and Eu bonds. The former USSR is gaining, but still in terrible shape (energy is their only bright spot). Third world countries...well, they are third world countries and might seize assets tomorrow or default on debts.
As long as this continues, the Fed will be able to hold things together, and I don’t see world economics improving for years.