By Gonzalo Lira:Right now, we’re in that weird in-between time of financial crises: The Global Financial Crisis of 2008 is behind us, while the next global crisis is not here yet—but it’s on its way.
We can feel how it’s on its way. Most everyone plugged into the macro-economic zeitgeist can tell you that bad juju is most definitely in the post—just that nobody yet knows (or is sure) what shape the next crisis will take.
Lots of people have been pointing to the various signs of the coming crisis: A U.S. Federal government deficit that’s over 12% of GDP, to be repeated in fiscal years 2012, ’13, ’14 and possibly ’15, if not surpassed; abnormal rises in commodity prices; European disintegration; a Federal Reserve that is printing money like there’s no tomorrow; the largest bond fund in the world—PIMCO—exiting Treasuries (that’s like Baskin & Robbins exiting chocolate); a complete inability of the political leadership class to do anything about the fiscal mess of the United States, at the Federal, State and local levels.
But though everybody points to the signs of the coming crisis, no one can yet make out its true shape. I’ve posited that it’ll be hyperinflationary, while other very clever people have claimed it’ll be deflationary.
However, these different interpretations about the coming crisis are interpretations of what’s coming up in the future.
As we sit here waiting for the next Apocalypse, let’s forget about tomorrow and instead consider the past. Let’s ask ourselves the obvious question:
What got us here?
What policies were implemented—decisions made—actions taken—which would set us on such a path to oblivion? Because that is our ultimate destination—oblivion. It’s coming to the American economy—and American society—as surely as if it had been FedExed last night. So if we’re going to hell, might as well figure out how we got there......read on
No comments:
Post a Comment