Posted By RichC on September 27, 2016
After watching David Stockman on Wall Street Week this past weekend, I was intrigued enough in his message of economic panic to pick up the Kindle version of his latest book. Although he is not new to the "Henny Penny" view that economically we can’t continue on the current path, hearing and reading his analysis rings the bell of worry (again) in my head. I’ve been on the "hesitant path" when it comes to a true recovery and what it means to our government, the Fed and the majority of Americans regarding our money and future. Pointing out problems isn’t new, but so far we’ve found innovative ways to avoid addressing what most of us see as the inevitable: the inability of governments to print and borrow more money without severely impacting the value everyone places on that piece of paper or digital number on our accounts.
Stockman begins by looking at the upcoming November 8th election and what he sees coming from politicians of both political parties. Since I’ve not finished the book yet, hear are a couple early quotes to give a flavor to the "laying out the problem."
I’ll be reading as fast as I can since the first debate will have already happened (Monday night) and I’m writing this on Sunday night for Tuesday AM.
Part two – WSJ comment:
On another tack, the Wall Street Journal posted one of it’s best "explainer" type full page graphics filled illustrations on September 23, 2016 which illustrated how soft worldwide economic growth really is. The "Bond Basics" starts the page pointing out that savers have had to chase growth (risk) in order to "reach for yields." In some countries (Japan, Germany and Switzerland) they have even gone negative. Who want to buy a bond or put money in the bank only to have it be worth less in a year than when you deposited it?
We continue to hear the fiscally minded discuss the ongoing shortfalls regarding tax revenue and spending, as well as the growing number of Americans who are depending on the government for everything from food and housing to their medications and healthcare. Both the costs and the number of people depending on Washington DC is rising, while the numbers paying in is smaller each year. Population growth is slowing and the number aging is growing.
The Road Ahead, as the final graphic illustrates, is a Warning Sign that our monetary policies may not be able to "jolt" the economy as governments and economist have done in the past. The landscape has changed and hurdles are enormous lending even more ammunition to those who see dark days ahead if something isn’t done to reset our economic path (Hm, I sound like the Climate Change environmentalists?)