I was recently chastised, and rightly so, by regular reader Donal Lang for my not very civil response to a reader's commentary.
I wrote to Donal:
"Donal,
After further reflection and a good night's sleep, I have decided to delete my offending commentary (while NOT deleting the comment that ignited my ire).
Nothing worse than hypocrisy... and while I complain about the lack of civility in political discourse nearly every post, you rightly pointed out my own lack of civility.
You point out that I am out of bounds in finding fault with this vegan for, well, being vegan... Not the case at all. Vegans that extend the view of the sanctity of life to animals in addition to mankind deserve our respect. Somehow, and I want to say this kindly and with great civility, I do not feel that way about vegans that wish to extend that view to animals but not to unborn children.
Of course, that does not mean I get a pass on the hypocrisy thing... and I hope I have done a better job in keeping with my own principals."
Let us all continue to strive to be more civil in our tone in discussions on this Blog - especially me!
---------------------------------------------
Moving right along...
My bet is, Hoenig will be silenced (not like the James Bond way, but silenced none the less). If not, it is very likely that another well credentialed member of the financial establishment joins him, and then another and another... it would not take much to inspire a significant loss of confidence.
The Mad Scientist and I were speaking this morning (you can read his blog, the link is on the right), and he pointed out that the only support the US$ and the Treasury market were getting was coming from the PIGS - Portugal, Italy, Ireland, Greece, and Spain - if they go first, that likely buys the U.S. 9 to 18 months... or until California gets its bailout.
Because folks, the California bailout is coming. And that, to my mind is the beginning of the "middle of the end" (the beginning of the end came and went, depending on how you measure it, with the tech market blowup in 2000 or housing market blow up in 2006.
How this plays out is anybody's guess... but I gotta think that the world wide reaction to the last super power and world reserve currency going Ka BOOM is going to be tough to respond to.
Think about it. The U.S. spends $383 BILLION per year on interest on the debt. The debt is growing, and interest rates, at least on the short end of the curve, have no where to go but up. Too, the Treasury has front loaded the auctions on the short end, and will HAVE to move up the curve (issuing paper of greater duration) - where the borrowing costs are at least 100 to 200 basis points (1% to 2%) higher. Still with me? Good. That means with a U.S. estimated national debt of 14.5 TRILLION in 2010 that the interest costs on the national debt will likely rise to $525 billion next year - or nearly 4% of GDP (this is the only ratio that matters, the absolute number is irrelevant) - and rising exponentially (and we all know what that means).
Sooooo.....
Don't worry, be happy. There is nothing to be done on a macro basis about this given the political realities in the U.S. Get your own house in order, cause we are getting close to crunch time.
Libertariananimal (at) gmail