Posted on 07/26/2010 7:47:13 AM PDT by TigerLikesRooster
Ferguson: Overwhelming US Crisis Looms
Monday, July 26, 2010 09:41 AM
By: Julie Crawshaw
Economic historian Niall Ferguson says Keynesian economists are stuck in the 1930s, completely unaware that a US debt crisis could come quite suddenly.
All it takes is one piece of bad news a credit rating downgrade, for example to trigger a sell-off, Ferguson writes in the Financial Times.
And it is not just inflation that bond investors fear. Foreign holders of US debt and they account for 47 percent of federal debt in public hands worry about some kind of future default.
Yet some economists seem not to have noticed that the big academic winners of this crisis have been the proponents of behavioral finance, in which the ups and downs of human psychology are the key, says Ferguson.
As evidence, he points to a recent poll showed that 45 percent of Americans think it likely that their government will be unable to meet its financial commitments within 10 years.
(Excerpt) Read more at moneynews.com ...
P!
I'm very pessimistic about how things are going. But the utter lack of any consensus agreement on virtually any economic topic is very worrisome. It's like we're groping in the dark without a clue. That just can't end well.
The utter lack of agreement among experts is ... we don’t know what will happen. We have never been at this insane point where debt and spending is staggering.
No wonder you're confused. These headlines are on the same business page:
Whoa, Barton Biggs Is An Uber Bull Again After Disowning Stocks A Month Ago
Keynesian economists = Democrat economists = Names? I’d wish said author had names some names;
Transcript of Pelosi, House Democratic Leaders, and Economists Press Conference Following Economic Forum 10/21/2009
http://www.speaker.gov/newsroom/pressreleases?id=1414
Speaker Pelosi. “...We just had a very instructive meeting with some leading economists about the number one subject on the minds of the American people: jobs. Jobs, jobs, jobs, and jobs.
...I was very pleased that for the entire session of nearly four hours ...I am pleased that we had the benefit of the thinking of Dr. Mark Zandi, Dr. Alan Blinder, Bob Kuttner, Heather Boushey, Bill Hambrecht, and Allen Sinai.”
IF Moody's, Fitch or the S&P dowengrade the US Treasury bonds from AAA it will be because someone is PLANNING and managing the crash of the dollar.
>> It’s like we’re groping in the dark without a clue.
I’m taking the Occam’s Razor approach that that simple explanation is the best fit answer to the question of why the “experts” can’t reach a consensus.
Collectively, we DON’T have a clue.
We’re just gonna have to see how it all shakes out.
Did Blinder say this in the meeting as well?
an absolutely horrendous long-term fiscal outlook
Transcript of Pelosi, House Democratic Leaders, and Economists Press Conference Following Economic Forum 10/21/2009
http://www.speaker.gov/newsroom/pressreleases?id=1414
Former Federal Reserve Vice Chairman Alan Blinder
So for that reason, despite the fact that were looking at an absolutely horrendous long-term fiscal outlook,
...I, like Mark, and I think most of us around the table, believe that at least a modest, now this is where people will disagree, but at least a modest increase in the deficit is targeted very strongly on job creation. Not a scatter shot, but targeted very strongly on job creation would be appropriate.
^
“a modest increase in the deficit is targeted very strongly on job creation.
[Democrats and their economist talked about tax cuts for the rich]
“Not a scatter shot, but targeted very strongly on job creation would be appropriate.”
[Social engineering tax credits aren’t broad enough]
In the past, the market just crashed and deflation ensued. Now they think they learned the lesson and believe they found a way to solve it: pump in astronomical amount of money to resuscitate the crashing market.
So what may become a deflation(or depression) could now turn into huge inflation. Or we could have really malignant stagflation. Nobody has tried so far to neutralize mega debt implosion with astronomical infusion of money in the past. At least not on this scale.
That bothers me too. Either they really don’t know what’s going on . . . or there IS some answer out there and many people are subconsciously avoiding it because it’s too terrible to contemplate.
Chicken Little alert!
BULLCRAP. The author makes it seem as if this is some sort of nefarious plot by The Man to keep the poor down.
Economics has become part and parcel to politics. If you support the side in charge, things are looking up. If not, things are getting worse. Simple as that.
I got an Example that kinda of covers double talk too:
Former Federal Reserve Vice Chairman Alan Blinder
#1
Transcript of Pelosi, House Democratic Leaders, and Economists Press Conference Following Economic Forum 10/21/2009
http://www.speaker.gov/newsroom/pressreleases?id=1414
So for that reason, despite the fact that were looking at an absolutely horrendous long-term fiscal outlook,
or
#2
Wall St. Journal : The Case for Optimism on the Economy 12/16/2009 | Alan Blinder
http://www.freerepublic.com/focus/news/2408814/posts?page=24
Let me offer instead, in deliberately one-sided fashion, the case for optimism.
The WSJ is a seperate case, IMHO. They’re all about getting people to buy into the stock market.
I don’t know exactly how the inflation versus deflation scenario will play out but those who talk of recovery are simply refusing to see what is happening. There IS NO RECOVERY and there WILL BE NO RECOVERY so long as people who have no real world experience are running things. Think of it this way, IDIOCRACY is a documentary.
http://www.youtube.com/watch?v=2fq2ga4HkGY
It was the same author/economist, Blinder, I was pointing out
"Former Treasury Secretary Paul O'Neill was told "deficits don't matter" when he warned of a looming fiscal crisis.
O'Neill, fired in a shakeup of Bush's economic team in December 2002, raised objections to a new round of tax cuts and said the president balked at his more aggressive plan to combat corporate crime after a string of accounting scandals because of opposition from "the corporate crowd," a key constituency.
O'Neill said he tried to warn Vice President Dick Cheney that growing budget deficits-expected to top $500 billion this fiscal year alone-posed a threat to the economy. Cheney cut him off. "You know, Paul, Reagan proved deficits don't matter," he said, according to excerpts. Cheney continued: "We won the midterms (congressional elections). This is our due." A month later, Cheney told the Treasury secretary he was fired."
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.