The Hysterical Deficit Hawks: "They run about with fire extinguishers while their house floods"

[Better Believe It]

The End of the World. That Is, the End of the World We’ve Known Since WWII
By Fabius Maximus
November 9, 2010

Summary: A status report about the end of the post-WWII world. The great recession has accelerated the process, revealing its weaknesses and showing the people of the rapidly growing emerging nations that they have outgrown it. The US is almost its lone defender, a futile effort wasting time and resources that could be spent adjusting to the new world being born.

The post-WWII era slowly winds down, slowly but noisily. It consists so far of two sets of interrelated dynamics. First, a reversion to the mean of history: the center of economic power returns to the East, ending a few hundred year long aberration.

The economic and political regimes of the developed nations (US, Japan, Europe) are failing under pressure of aging demographics and their accumulated public policy errors.
Growth in the Emerging Nations (EM’s) is accelerating as they adopt modern social and technological patterns.

The pace and nature of this transition are unknowable, despite the gurus who speak as if they read the 2100 AD Britannica. We can only guess about the shape of the new world that lies beyond. It depends on choices we all will made, choices we do not yet understand.

A note about inflation

The US government has thrown a “Hail Mary” pass (i.e., QE2) to prevent deflation, deflation potentially lethal for a high-debt economy like ours. Despite that, many are hysterical about prospect of inflation or even hyperinflation. This confusion is typical of the confusion brought about by transitions. People run about with fire extinguishers while their house floods.

Read the full article at:

http://www.roubini.com/globalmacro-monitor/259969/the_end_of_the_world__that_is__the_end_of_the_world_we___ve_known_since_wwii

I thought that was a really funny line that accurately describes the economic prescriptions promoted by the deficit hawks. BBI

[The Magistrate]

1. It Is An Apt And Excellent Line, Sir

"The facts are there, for those willing to do the hard work of seeing them."

[Better Believe It]

2. Kicked for early morning humor.