The Armageddon Gang
Interesting article in Time magazine, The Armageddon Gang, looking at the uber Bearish crowd.
The piece starts out pretty skeptically, but eventually, acknowledges risks and issues usually ignored in family publications. Frequent BP guest Mike Panzner gets a lot of ink:
"There are those who fret that current troubles in real estate will lead to an economic slowdown, maybe a recession. Then there's Peter Schiff. "Our standard of living is going to decline," the Connecticut stockbroker confidently declares. "There's no way around it, and it has just started. . . "
Schiff owns Euro Pacific Capital, a smallish firm that specializes in moving clients' money into nondollar assets like foreign stocks and bonds. Over the past couple of years, he has become a regular, hectoring presence on cable-TV business shows--on CNBC they call him "Dr. Doom." Now he has a book out, ominously titled Crash Proof: How to Profit from the Coming Economic Collapse.
It isn't the only such cheery tome on shelves these days. In Financial Armageddon: Protecting Your Future from Four Impending Catastrophes, trader Michael Panzner warns of an economic meltdown that will lead to Zimbabwe-style hyperinflation and possible martial law . . .
We have heard such pronouncements of impending doom before, of course . . . When I bring this record up with Panzner, he has a ready retort. "History didn't begin in the postwar period," he says. "History didn't begin 20 years ago." Living memory includes the Great Depression, begun in 1929 and stopped only by global war; stocks didn't fully recover until 1954. The scary scenarios painted by Panzner and his ilk are not outside the realm of historical experience. What's more, they're all grounded in the incontrovertible truth that much of our economic growth of the past 25 years--and almost all the growth of the past five--has been funded by debt."
What makes Mike's book more interesting than the typical doom and gloom tome is his politics: The four impending catastrophes he discusses are pulled equally from the playbook of the Left (Massive debt, unregulated derivatives) as well as the Right (Unfunded Pensions, Social Security and Medicare entitlement programs).
Remind me to introduce Mike to Larry Kudlow next week -- despite the less than sunny views in the book (which is the antithesis of Larry's perspectives), the concern with government guarantees and entitlement programs are right up Kudlow's alley . . .
The Armageddon Gang
Time, Friday, Mar. 30, 2007
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1) If someone has late stage cancer, is it possible they will survive? Yes.. Would it be "uber-bearish" to say they're not gonna make it? No... It's just assessing "reality"
2) The whole bull/bear dichotomy rhetoric is greatly oversimplified...For example, we could realisticly have the Dow go to 30,000 NOMINALLY but have that gain wiped out in REAL TERMS by a devalued currency ...See Wiemar Germany where the market went through the roof but you needed piles of paper money to buy a loaf of bread...
On a side note, I've heard it said that one of the factors which contributed to the rampant anti-semitism in post WWI Germany was that as a result of their entrenched network of relationships internationally the German Jews had significant amounts of wealth in non-German investments which meant on a relative basis their wealth was preserved to a significantly greater degree than their German brethren hence the later reality where they faced animosity and ultimately wealth confiscation and genocide...
Thus, directing a portion of one's wealth to non-US assets would not seem to be a bad idea...After all if the world economy and US economy move along and we never have another currency meltdown or collapse of a great superpower(historically highly improbable) then those alternative non-US assets would still provide a nice return...
Posted by: SINGER | Mar 31, 2007 10:38:17 AM
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