There are some pretty smart people that are getting awfully scared about our economic situation.
Most of these folks did not become successful by being “kooks.”
All excerpts below come from a column written by Max Abelson.
Asked about the biggest risks to Liberty, his media conglomerate, Mr. Malone said his concern was this country’s survival. “We have a retreat that’s right on the Quebec border. We own 18 miles on the border, so we can cross. Anytime we want to, we can get away.”
His wife is more concerned: She’s already moved her personal cash to Australia and Canada. “She wants to have a place to go,” said Mr. Malone, No. 400 on this year’s Forbes list of the richest people in the world, “if things blow up here.”
Paul Krugman, who I consider a crackpot economist, is not too different in his outlook:
You read through The Times and worry that the country will sink into a third depression-Paul Krugman said a few weeks ago that it already has-unless the U.S. government does something serious. But then you think about where money for another stimulus would come from, and what will happen if trillion-dollar deficits get worse.
Abelson also quotes Robert Schiller who has been more right than most over the past decade:
“We have Ben Bernanke, who has figured it all out; but you and I know he’s just guessing,” said Mr. Shiller, the Yale professor. The first edition of his book Irrational Exuberance warned in 2000 about a stock market bubble, and the second edition in 2005 predicted the real estate collapse. “When you see something like the BP oil spill, you know we’re just plunging headlong into the future without knowing what we’re doing.”
Another quote comes from Stephen Roach, Morgan Stanley’s non-executive Asia chairman and the firm’s former chief economist:
TARP, zero interest rates, trillion-dollar budget deficits, you name it, we’ve thrown anything we can at the system. And that has been successful to a limited extent at stopping the bleeding, but it has not really allowed the patient to get up off the table and resume a normal life again.
Abelson then quotes Zerohedge editor, Tyler Durden:
“With trillions of dollars spent to prevent an all-out economic collapse we have only managed to buy under two years of time and the economy is once again starting to roll over.”
The hedge fund manager said he doesn’t even trust gold. “It’s worthless if the social fabric tears,” he said. “We’re going to have to do something different, before we get down to where it’s really bad.”
Subsistence farming here we come.