The Bull 'n Bear on Default, Deflation and Tetris
Watching this short video from the FT's James Mckintosh, A U.S. Default is No Longer Unthinkable, it really hit me how shambolic and dysfunctional our political leadership is. The sort of brinkmanship that could push us to the edge/ into technical default really isn't useful, to put it mildly. Given the amount of hidden risk and uncertainty in the financial system, who knows what effects an unprecedented event of this sort could trigger? It could well accelerate our creditors' efforts to diversify out of the dollar, for example, thus diminishing its role as the world's reserve currency. While that process is inevitable, and even desirable, over the long term, this surely isn't the way to go about it. That's just a relatively benign effect I can think of -- one can easily imagine siutations that are much more alarming.
Are we on the berink of the double-dip recession that never materialized last summer? I'm increasingly willing to believe that. I find it astonishing that some people are constantly going on about the perils of inflation. That's clearly a medium-term risk -- worth thinking about, certainly, but not the most pressing risk on the table. According to this article, the long-term historical record analyzed by Jim Reid -- one of the few analysts worth listening to -- suggests that, weak as the recovery has been, the economic cycle is actually peaking. Whether or not the historical record applies to the current circumstances is a matter for debate, but it is a guidepost.
Enough of the doom-and-gloom, here is something less weighty and more fun. Take a look at the play of this Tetris Grandmaster. Not that it is necessarily the best use of one's time, but it is a display of the human mind/ body achieving a level of performance that is so far beyond the average that is barely possible to comprehend it. Talk about muscle memory! Hat tip to Felix Salmon for the link.
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