Julian Robertson predicting 15-20% inflation

Discussion in 'Economics' started by WallStWhizKid, Sep 24, 2009.

  1. US May Face 'Armageddon' If China, Japan Don't Buy Debt
    Posted By: JeeYeon Park | News Associate
    CNBC.com | 24 Sep 2009 | 02:22 PM ET
    The US is too dependent on Japan and China buying up the country's debt and could face severe economic problems if that stops, Tiger Management founder and chairman Julian Robertson told CNBC.

    "It's almost Armageddon if the Japanese and Chinese don't buy our debt,” Robertson said in an interview. "I don't know where we could get the money. I think we've let ourselves get in a terrible situation and I think we ought to try and get out of it."

    Robertson said inflation is a big risk if foreign countries were to stop buying bonds.

    “If the Chinese and Japanese stop buying our bonds, we could easily see [inflation] go to 15 to 20 percent,” he said. “It's not a question of the economy. It's a question of who will lend us the money if they don't. Imagine us getting ourselves in a situation where we're totally dependent on those two countries. It's crazy.”

    Slideshow: Biggest Holders of US Debt
    Robertson said while he doesn’t think the Chinese will stop buying US bonds, the Japanese may eventually be forced to sell some of their long-term bonds.

    “That's much worse than not buying,” he said. “The other thing is, they're buying almost exclusively short-term debt. And that's what we are offering, because we can't sell the long-term debt. And you know, the history has been that people who borrow short term really get burned.”

    The only way to avoid the problem, he said, is to "grow and save our way out of it."

    "The U.S. has to quit spending, cut back, start saving, and scale backward," Robertson said. "Until that happens, I don't think we're anywhere near out of the woods.”

    Robertson is not very optimistic about the short-term.

    “We're in for some real rough sledding,” he said. “ I really do think the recession is at least temporarily over. But we haven't addressed so many of our problems and we are borrowing so much money that we can't possibly pay it back, unless the Chinese and Japanese buy our bonds.”
  2. Eight


    The US government has a lot of assets actually, they can sell land and buildings and raise some money.. it's been discussed by the Executive branch in the 60's-70's... maybe they could back the bonds with that stuff... It would be hilarious when they finally default though...

    Inflation is a certainty in my book.. Democrats when discussing economics always get a little "deer in the headlights" micro expression before they put on their game face and start bullshi.. I mean explaining...
  3. Obama, the last president of the United States:eek:
  4. bozwood


    funny, the "watch the 2nd part of the interview with JR" link kicks you over to "Stop trading and listen to Cramer" video instead of the actual 2nd half.

    I guess that's a way to get people to watch him.
  5. lrm21


    we survived double digit inflation in the 70's with single family workers.

    We will survive now

    Its all relative.

    Plenty of folks in Latin America been living that way for decades.

    Just dont park cash
  6. Why is that actress from the movie Pretty Woman predicting inflation? :cool:
  7. ...........................................

    Actually not a bad idea....

    State mandates only
    15% Consumption tax only
    No more FED

    Washington buildings could be converted to condos. ...or better yet just turn em into prisons...leave the same people that are there now...in them...

    Build an electric fence around it....
    Never let them out....

    Then the US would grow leaps and bounds....on its own....

    The "states" would enjoy the next golden era....
  8. the1


    This is precisely what the country should be doing. It's like a consumer getting into credit card debt. They have to scale back, save, and recover or they have to make more money. A consumer has to work a second job and is limited by the hours in the day and their stamina. The government doesn't have those constraints because they can create money from nothing but they don't have the ability to create an infinite supply of money indefinitely. There will be consequences.

  9. the1


    That's a slippery slope. Imagine if those bonds were backed by the city of New York, or perhaps by your house.

  10. zdreg


    there was a time u wrote about libertarian ideas that had possibilities. try to deal with reality. otherwise obama will get all your assets,
    #10     Sep 25, 2009