I like Karl Denninger a lot. He calls “bull” on a lot of stuff and explains why.
Having said that he is deeply pessimistic, beyond even other ‘perma-bulls’ like Peter Schiff and Noriel Roubini.
He could turn out to be right, but I suspect he is way too doom-and-gloomish.
I remember a discussion with my Dad (now deceased) about the Y2K projections. His comment was “it’s not going to be that bad”. (I was not sure myself, and I worked in the software industry. My company found some pretty bad bugs in our super-widely-deployed system software.)
My Dad’s take was “there are a ton of really smart people working to make sure it doesn’t happen, all over the place”.
He turned out to be right about that. I think a similar rule applies to the ‘total financial meltdown’ scenarios. It’s not in anyone’s best interest. Lots of people are working to prevent it. They may not be 100% effective, but even if they are 90% effective they will prevent the big blow out.
“I think a similar rule applies to the ‘total financial meltdown’ scenarios. It’s not in anyone’s best interest. Lots of people are working to prevent it. They may not be 100% effective, but even if they are 90% effective they will prevent the big blow out.”
Hardly the same thing...the horse has already died...making a new saddle won’t get you a ride...
I'm not so sure the smart people can counter this.
Your dad had a good perspective. What I think is different here is the number of bubbles yet to pop-—comm real estate, credit, mortgages II, while unemployment is grim for forseeable future.
As a consumer economy,I don’t see where demand is going to come from for all the “fripperies” we tend to buy. Plus, the deficit is a whole big bunch bigger than anyone likes to talk about.
Our GDP is about 14 trillion per year. Our deficit is at least that much BEFORE considering unfunded socsec and medicare, whoich could push the total to around 100 trillion.
Even if half that amount, 50trillion, there are outlays of about 4-5 years of 100%GDP. If we bite the bullet and pay off at 25%GDP in taxes, that equates to at least 16 years to 20 years of super high taxes.
For the first time in my 50+ years, I see gloom and doom coming in a big way.
parsy, who is normally fairly optimistic
FWIW, here is a link to taxes as a % of GDP. The 2 charts are at the bottom of the page. And,if the real outlays are in the 100 trillion range, its even worse.
parsy, the glum
Comparing this situation to Y2K is ludicrous.
I’m not even going to waste my time explaining why.
For crying out loud, you’ve got Wall Street Banksters TRYING to screw the public and SUCCEEDING. Trillions of dollars.
This is not a potential problem. It’s happening NOW.