Six Impossible Things
By John Mauldin
May 28, 2010
1275058800
Six Impossible Things
Delta Force
Reduce your Deficits!
Pity the Greeks
Should the US Bail Out European Banks?
Italy at Last!
Alice laughed. "There's no use trying," she said "One can't believe impossible things."
"I daresay you haven't had much practice," said the Queen. "When I was your age, I always did it for half-an-hour a day. Why, sometimes I've believed as many as six impossible things before breakfast."
—From Through the Looking Glass by Lewis Carroll
Economists and policy makers seem to want to believe impossible things in regards to the current debt crisis percolating throughout the world. And believing in them, they are adopting policies that will result in, well, tragedy. Today we address what passes for wisdom among the political crowd and see where we are headed, especially in Europe.
I am reminded of the great line from the movie, The Princess Bride. Vizzini is the short bad guy who is trying to get away from Westley and every thing he attempts does not work. Westley just keeps on coming. At each failed attempt, Vizzini mutters, "Inconceivable." Finally, Vizzini has just cut the rope and The Dread Pirate Roberts (Westley) is still climbing up the cliff.
Vizzini
: HE DIDN'T FALL? INCONCEIVABLE.
Inigo Montoya
: You keep using that word. I do not think it means what you think it means.
European leaders keep telling us that the break-up of the eurozone is inconceivable. I do not think they know what that word really means. Let's see if I can explain the problem so that even a politician can understand.
But first, and quickly. We have transcribed the speeches from my recent 7th Annual Strategic Investment Conference I put on with my US partners Altegris Investments. To say they were awesome is somewhat of an understatement. If you have registered for my free accredited investment letter, you should already have gotten a link or will get one soon to the speeches. David Rosenberg, Dr. Lacy Hunt, Paul McCulley, Niall Ferguson, Jon Sundt, Jason Cummins, Gary Shilling and your humble analyst. That is a world class line-up.
If you are an accredited investor (basically $1.5 million net worth) and have not yet signed up for my letter, then go to www.accreditedinvestor.ws and do so now. One of my partners from around the world will get in touch with you and make sure you get access to the speeches. They will also show you a world class line-up of funds and investment managers that have the potential to help your portfolio weather these tumultuous times. You really owe it to yourself to take a look. (If you are a non-US investor, there is a button on the top of the home page.) In this regard, I am a registered representative of and president of Millennium Wave Securities, LLC, member FINRA.
Six Impossible Things
I have written several letters over the years about the basic economic equation
GDP = C + I + G + (Net Exports)
Which is to say, that Gross Domestic Product in a country is equal to total Consumption (personal and business) plus Investments plus Government Spending plus next exports. This equation is known as an identity equation. It is true for all countries and times.
Now, gentle reader, I am going to spare you a few pages of algebra and cut to the...
Comments
There are no comments at this time.