Munger is an old washed up guy. Apparently desperate for attention hence the penning of this perhaps final manifesto. I wouldn't put much creedence to the "parable" or anything this guy says about the future. Best, TINS
They could terminate all operations in Iraq and Afghanistan and then drastically cut defense spending. That would save a chunk of coin.
I disagree with you. I do agree that governments will continue to kick things like pensions and medicare to the next president. However, yes, things can get bad, but I don't think anarchy and chaos will result. Think about it this way: If people would have told you that 10 years ago that oil would be > $75, unemployment would be 10% and underemployment would be at 20%, the US deficit would be in the trillions, and the debt was spiraling out of control, wouldn't you think that anarchy would result? Wouldn't you think that the stock market would have tanked? Granted, it is down 25% since its 2007 highs, however, most of the recovery from SPX 666 to 1150 in 2009 has been while unemployment has been increasing, debt increasing, and commodities increasing. The point is that the market has an incredible capacity to forgive, mainly because it wants to forgive. No one wants a US doomsday scenario, thus they will keep giving the US more and more rope to hang itself with. At some point, yes, it could very well snap back and all of a sudden chaos will erupt, but it's more like mutual assured destruction if that occurs. It doesn't seem likely right now, despite how dire things are. Even though I don't think catastrophe is likely, that being said, I do have a small stash of physical gold, just in case of a doomsday scenario. I have a link necklace made of solid 24k gold so I figure I could break off links and use that to get myself out of the US and into a country like Canada or somewhere in Europe where things might not be so bad.
The problem is that lawyers and actors are running the country on the advice of economists who are really just pseudo scientists. Free market works only in perfect conditions, which do not exist in reality. I am not advocating protectionism here but giving you just a food for thought. There are so many smart people in America but only the most outspoken and loud idiots run the government because they never let the really intelligent people speak up. Someone mentioned that Munger is a hypocrite because Berkshire invested in GS. That's a classic misunderstanding about what business actually is. Business is immoral and there is no choice about it. Munger or Buffet can be vocal about a certain policy not being right but in terms of his fund he is here to make money for his investors and that means acting within the rules of the system to produce profits. At this point GS is profiting handsomely from the current setup so the right thing for any investor is to own their shares period. You need a set of simple rules to create a fair and moral playing field in all spheres of the society. There will always be scum bags that will try to rip the system off but they are also part of the whole. No solution will ever be perfect. - Never vote for another lawyer again because the only thing they know is how to talk! When the day of reckoning comes they will talk their way out of any responsibility. - Bring in top business people, engineers, artists and scientists (not government subsidized bankers) to run the country. - Get completely rid of religion in the government. The separation of religion is essential for the country to get on the right track.:
Anarchy could be broad-based, or localized. When looking at it on a localized level, one can argue it's already here to a degree in tent cities in California and certain neighborhoods in Detroit. I think broad-based is unlikely, or at least not very likely. But you never know how your area, wherever that may be, will continue to be. There are many people that have fallen from the middle class. Yet they still don't realize it. They may be living on savings, unemployment, rent free in a home that will ultimately be foreclosed on. But eventually, they will run out of money. Their numbers will grow.
I agree wholeheartedly. For example, the Czech Republic voted in Václav Havel , a poet, and he remains one of the most popular politicians of all time. When he was diagnosed with cancer, he insisted in being treated in the same state-run hospitals as the rest of the citizens, because he said if state hospitals were good enough for their citizens it was good enough for him. Politicians like that actually inspire hope and change with their ACTIONS, not with their WORDS like Obama. In countries like France, they honor great scientists on their currency, not politicians like they do in the US. Our Congress and Senate are filled with hypocrites and criminals that steal from the taxpayers and enrich their own pockets, and this needs to change.
Oh there will be plenty to go around. They have already started ramping up both forces. Trust me, they will have a "solution".
Great post. It really is different this time. Post WW2 America grew out of similar debt by virtue of: 1) A huge manufacturing base. 2) Huge foreign demand for US products 3) A balanced Federal Budget 4) High taxes. America has NONE of that. The oft-heralded "jobless recovery" is just another iceberg-torn hole in the Titanic (8 Million jobs we'll never see again is somehow "bullish" in Goldilocks Country) Further, we balance the budget or raise taxes dramatically, and this ponzi economy will collapse in a heartbeat. Others point to Japans lost decade for solace. Japan substituted domestic demand with foreign buyers - America, Europe and China - effectively propping employment and GDP with neomercantile policies. When America goes down, there's no economy big enough to "buy our exports". The favorite slogan of CNBC cheerleaders. Come to think of it, America, Europe and Japan are in the same boat. The top 3 Industrial powers on earth. Unfunded entitlements aren't even on the radar. Our national and private sector debt is so huge, manufacturing base so small, and GDP so overweight in leveraged-speculative industries (FIRE), this ship is going down HARD. GW put 3.1 Trillion on the National Debt. Obama put on another 5.5 Trillion, by year-end (2010 est). For the last 5-8 years, the only thing that's propped up this ponzi economy is deficit spending. ~6-8% of GDP is deficit spending. Pull that, and we collapse. Continue this borrow-and-spend madness, and we collapse. We're at the point where if we did the right thing tomorrow, slashed programs, entitlements, balanced the books, and marginally increased interest rates, we'd have a Great Depression the day after tomorrow. Stock market, real estate, deficits, everything would blow the fuck up. People don't get it. This is it. Our economy is nothing but smoke and mirrors. Debt piled on debt all factored into "GDP". Spending borrowed money that never gets paid back is not Gross Domestic Product. Ask Greece. A farm with livestock, on water, surrounded by like-minded friends and family, with guns, ammo, food, bullion and rations. God Willing, I'll be ready to go this year. One last point, Misthos is right about the confidence game (and nearly everything else). The sooner money pulls from T-Bills and greenbacks, the sooner comes Judgment day. The market is always slow to react. But when it does, it's over.
Of course they do. It's called Martial Law and a Police State. It's been in the cards for awhile, now. The FED's are just waiting for the right catalyst. I wonder what it could be...?! The Pentagon Wants Authority to Post Almost 400,000 Military Personnel in U.S. http://www.progressive.org/wx081209b.html
Couldn't agree more. Smartest man in the race, but believing in magic underwear killed him. With healthcare taking centerstage, I thought it would have been a perfect opp for Obama to cross party lines and bring Mit in to help. Since he has done it in the state of Mass., he could have been a great addition to the team. Dems probably thought if Mit helped too much, spotlight would be off Obama and GOP takes some credit (God forbid!). Damn 2 party system.