I get a lot of inquiries about my continued position on the dollar and U.S. debt — mainly because I have so steadfastly and consistently proclaimed that the economy cannot sustain the sort of growth western nations have enjoyed for the last century. And yet stock markets continue to climb, and debt yields remain low. Things seem to be going well, but I maintain that still, the dollar is doomed. My detractors clamor for me to finally and unequivocally admit defeat — to concede that I have been wrong in all my economic prognoses.
I will admit I have sustained a lot of criticism, and even ridicule! Unfortunately for those of you who have demanded my submission, however, I am undeterred. This is not a short game, and I believe it is short-sighted to condemn those of us who believe in the limited future of the U.S. dollar.
I have never put a time-limit on my predictions, and I have certainly never made any absolute claim that the decline would be an overnight event (although I do believe it could be). The United States and other world economic powers wield colossal financial resources, and there is no question they have the might, as well as the coercive influence, to sustain artificially low interest rates. They also have the ability to hide the reality about inflation and unemployment, because the complexity of these issues eludes common voters; I don’t know many people who understand the true nature of inflation — much less, the intricacies of fiscal and monetary policy.
I am quite content to sit back and watch this unfold. If markets continue to grow, I will watch with fascination. But there isn’t much that’s going to shake me from the core premises of my positions: namely that the U.S. has more debt — in real terms — than any other nation or empire in history. It is using the dollar’s status as the world’s reserve currency as the fuel for its unprecedented expenditures. And because of this, it can justify printing vast quantities of money, while misleading the public into believing inflation is not a problem — and even more importantly that inflation is not going to present an incomprehensible crisis at some point in the future.
I am a small voice in a pond of like-minded analysts who are courageous and prescient enough to see what’s coming. Please don’t foist the accusation of “arrogance” on me for that statement; it does require some fortitude to defy the tide of so-called “common wisdom.” Nonetheless, our conclusions derive from simple math, really. These things aren’t difficult to comprehend, it’s just that the result is so terrifying most people simply prefer to pretend like it doesn’t exist. This is, by the way, not a new story in the history of human awareness (or lack thereof)…
I am in a fortunate position, in that in many ways I really can’t lose. I don’t have a lot of wants; my family and I live modestly… we have everything we need right now, and we are happy. Maybe this happiness derives from the fact that we don’t find it by chasing material goods. We don’t take extravagant trips. We don’t wear expensive clothes. We’re content watching movies, gardening, taking walks, and playing cards. That probably sounds ridiculous to a lot of people, but I truly believe it is in the simplicity with which we live our lives that we find so much bliss.
I also believe this is why we will succeed no matter what the economic outcome. I cannot, for the life of me, see how the western powers can maintain the economic environment of the last century as the status quo. But if they do, my family and I will be fine. On the other hand, if my predictions are correct, then my family and I stand to gain measurably. And I’m obviously going to be content with that too.
I’m not trying to be smug; I am grateful beyond measure for the good fortune I have had. The only point of this article is to illustrate that I’m not terribly concerned with the notions of “right” and “wrong” as they apply to the ultimate outcome of the profligate ideologies of western economic powers. If it turns out that waging wars and printing money is indeed the ultimate road to global prosperity, then I suppose I will stand corrected.
But I don’t really believe that’s the best thing for humanity. And I don’t think you do either. I’ve placed my bets — relatively conservatively — and I suppose we’ll just have to see…