December 06, 2010
– Comments (3)
Hugh Hendry's Latest
Hugh is an interesting guy, and a compelling speaker, and I honestly think he had something to do with the great deflationary scare of 2010... He is extremely charismatic.
But he is not remotely altruistic and does not remotely care about whats best for the world economies over the long term (IN MY VIEW). Rather, he's talking his book and he wants his book to be right and him to get richer and more famous...
I disagree strongly with some of Hendry's investment ideas, but always enjoy reading them.
Here's a macro perspective that fits my view better: Dan Arbess "Investing as the Foundation Shifts"
I particularly agree with his assessment of the Great Depression years.
BEN incorrectly assumes that the Great Depression resulted form horrible Fed decision making. How can anyone come to this conclusion without more evidence? I have argued this with people for more than a year. The stock market boom/bust cycle that preceded the Great Depression and trade wars that ensued between nations starting a few years later were larger causes, in my mind, of the crushing economic contraction. What if the Depression years were not an accident, but a "best case scenario" that America achieved while the rest of the world burned in HYPERINFLATION, depression and massive unemployment. We actually survived better than nearly every other country in the 1930s. Germany got Hitler, we did not for example. Because deflation and depression coincided with sound monetary policy, does that mean this policy caused the Great Depression? ... I have not found any concrete evidence to support BEN's insanity that he can do the Depression years, one better, by printing endless amounts of money and PONZI buying Treasuries? Causation vs. correlation argument all over again.
What if BEN is dead wrong? And he is actually CREATING a bigger mess, both economically and politically by boxing U.S. into a HYPERINFLATION corner? The risks of ever increasing money printing and bailout needs, does not outweigh the benefits of somewhat better economic growth, in my mind. Why not be honest with America, balance the budget, give U.S. a long period of certainty about policy and pricing, so we can dig ourselves out! When will the MADNESS end? Apparenly NEVER, since Congress and the President have decided to compromise and print increasing deficits in 2011 that are compeletly irrational and childish. Print more money and deficit spend because we can, not because we should. Soon the world's investors may actually force U.S. to stop spending, through skyrocketing interest rates like those in Europe presently.
The U.S. bond bubble is bursting at the seams today, because the rest of U.S. can add on our own, and are beginning to wake up to the fact that we are committing suicide for the economy with this "compromise" with no one, excluding the devil himself. I will compromise by giving out free money to YOUR constituents, if you bail and give some out to MINE? Demorats and Repooplicans! This just 4 weeks after an ground breaking election to send a message to Congress and actually CUT the deficit... NOW the idiots in Washington are going to double and triple the deficit rate the next few years. I am a little confused, as will be the foreign investors we NEED to fund $3 trillion in debt roll-overs and another $1.5-$2 trillion in new deficit spending in 2011.
GOD HELP U.S. No one else may be able to, at this stage of stupidity. December 7, 2010 may go down in history as one of greatest days of economic policy "stupidity", vs. the usual December remembrance day of "infamy" and mourning usually reserved for the bombing of Pearl Harbor.
I am pushing for Rubio and the Paul boyz to recant their Republican membership tomorrow and start an actual, viable third party (call it the Tea Party if you must) in Congress to stand up to the MADNESS. Maybe they can recruit a few Democrats and some Republicans to join them, to start a voting block to halt the bailout insanity and redistribution of wealth from poor to rich in early 2011. But then again, I am a dreamer!