Mauldin's 'Endgame'
His thesis is that we're coming to the end a debt supercycle. The recession we're currently in isn't the result of the normal business cycle but rather too much debt laid on over too much time. Eventually, foreigners will no longer buy our bonds and then the wheels will come off.
Any thoughts, criticism?
This is probably plowed ground but I just bought the guy's book and I'm worried.
Foreigners already don't want our bonds.
That was the whole point of Bernanke's Quantitative Easing: provide the primary dealers with enough liquidity to prevent a failed bond auction. You didn't think big banks were going to purchase our debt with their own money did you?
However, now that Europe (PIIGS and France) are facing their own problems, we're starting to see a flight to safety and more foreign demand for treasuries.
These things tend to be very cyclical.
Think about it.
All of the 'growth' for the past 10-20 years was really pseudo growth financed by debt that will never be paid back...
Everybody built their businesses like the circus was staying in town forever...
The Chinese have stopped buying our debt over a year ago. Pimco stopped buy it less than a year ago. No one is buying that junk except for the Federal Reserve. The U.S. is monetizing the debt, devaluing the dollar in the process and everyone knows it. If you want to survive, get into the Swiss franc or into precious metals. Oh, stock up on food too.
Then again, last week when the market went nuts, where did everyone head? Gold of course, but treasuries went through the roof! Just sayin!
Originally Posted By Volstag:
Then again, last week when the market went nuts, where did everyone head? Gold of course, but treasuries went through the roof! Just sayin!
Except they didn't.
EDIT: Hanging out on the internet too long. Accept =\= except.
I've read his book; it's good.
Mauldin is something of an economics celebrity and he shows up occasionally on CNBC and other business TV programming. Basically, he knows his stuff; he's sharp. You can get more by subscribing to his newsletter, which is free, and also by going to; Goldseek.com where he posts fairly regularly.
My only criticism of Mauldin is that he is too optimistic. He believes that we will be able to develop alternative energy sources at economically affordable costs (and in time) and he also believes we will continue to make all sorts of technological progress. This is where I part company with his views as I don't believe any of this will happen. Mauldin presents his rosy view of the future without explaining how any of the good things he expects to happen can be made to happen against exploding debt levels and very low growth levels, which combined, will pretty much have to destroy new investment at the same time.
