Scary Debt Analysis

Thanks to my reading and teaching schedule, I’ve been unable to post much on current events the past couple of months. However, I simply must post a link to this interview with former White House budget director David Stockman.

Stockman paints a frightening picture of what is likely to be the endgame of the U.S. government’s “Ponzi economics” and “debt super-cycle.” When the yield curve (difference between short- and long-term interest rates) flattens out, something that appears to be beginning now thanks in part to the Fed’s “Operation Twist,” traders worldwide will begin to unwind their carry trades, and the credit markets will be in tremendous turmoil.

Stockman’s investment recommendation? Stay liquid and protect your capital at all costs. Yikes!

About Dr. J

I am Professor of Humanities at Faulkner University, where I chair the Department of Humanities and direct online M.A. and Ph.D. programs based on the Great Books of Western Civilization. I am also Associate Editor of the Journal of Faith and the Academy and a member of the faculty at Liberty Classroom.
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4 Responses to Scary Debt Analysis

  1. John Ward says:

    Dr. J:

    I was just going to send you the interview with David Stockman. I am pleased that you noted it. This is a very professional interview and voice from some one that knows what he is talking about. No talk show yelling and screaming, just question and answer. It is frightening but unfortunately truthful and accurate. I urge everyone to watch this interview.

  2. Cindi Dennis says:

    I’ve been reading stuff like that nearly everyday from all kinds of financial newsletters for the past 2 years.

    • Dr. J says:

      So have I, Cindi, and I have posted things like that on this site many times. What’s distinctive about Stockman’s statements is that he is an insider who is very difficult to write off as an alarmist or kook in “respectable” circles.

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