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    Thoughts from the Frontline

    The Flat Debt Society

    October 20, 2014

    International Monetary Fund chief Christine Lagarde says the global economy is facing “the risk of a new mediocre, where growth is low and uneven.”…  Lagarde said Europe's 18-nation bloc that uses the euro currency – collectively the world's biggest economy – is facing the "not insignificant" risk of falling back into a recession. (VOA News)

    Since at least the beginning of 2006, the most asked question I get after a speech is “Do you think we will have inflation or deflation?” In an attempt at humor, my answer has been “Yes.” I go on to try to explain that we are in a deflationary environment, but eventually we will see inflation. When QE1 was announced, there were many pundits (none of the Keynesian variety) who immediately said the risk…

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    John Anthony 32653

    Yesterday, 4:30 a.m.

    I recently read in one of the Mauldin articles that the Fed. has the possibility of returning money/profits to the Treasury. If that is the case why can the Gov’t not pay back the Feb say a billion at a time for a bond the Fed bought.  The Fed could give this money back to the Treasury and the Treasury could repeat the process on all the money spent by the Fed has been paid a back to the Fed, so the Gov,t debt would be reduced significantly.  The only problem down the road is that the money created by QE would not be destroyed by the Fed and would stay out there.  If the velocity of money were to stay low it would be quite sometime before any inflation takes hold.  As it is now the Fed does not know how if will reign in all the QE it has printed.

    Comments on whether this theory would reduce out Gov’t would be appreciated, especially from John Mauldin.

    Vincent Roach

    Yesterday, 1:35 a.m.

    The problem with current economics and the current economy is, as usual, based on a few fundamentally flawed ideas:
    1. Growth is desirable in and of itself, the more the better, even beyond the need to merely accommodate growing populations.
    2. Everything, including growth, can be measured in money and in fact money is more “real” than tangible things. In effect there is a disconnect between real things and their value.
    3. Everyone can, and should, be enriched through the economy in general, including growth. There should only be winners, and no losers. Every kid gets a trophy.

    These flawed ideas lead to our failing to recognize limits to growth and decisions to live within them, which involve choices and setting priorities.  Thus we create apparent growth by increasing the amount of money irrespective of the amount of things that money can buy. This can lead to broad inflation (which is what everyone seems to mean) when most people have money to spend, or to broad deflation when only a few people have money to spend and they spend most of it on a few very expensive things (the situation at the moment.

    All of these ideas come from expectations beyond reality. Perhaps that is necessary in order to motivate people to make changes that create growth, but when expectations exceed reality, there is going to be disappointment. What happens then depends on whether you have been a borrower, a lender, or a saver. Or more properly, which groups of how many people in what positions of power fall into each of these categories.

    Answering that question will establish a pretty good foundation for figuring out what is going to happen, and what should be done by a given individual or group, to survive.

    One other factor in play is of course the structure of power itself in the environment wherein the market functions, and the inherent value system of that power- a few powerful people striving to continue to live in the style to which they have become accustomed regardless of what the means are, across a continuum bounded by the other extreme of governments whose aim is to provide prosperity to all its members within a narrow set of humane principles.

    This can be modeled and worked out, but not accurately as long as expectations are accepted for reality, money is the measure of all things, and evolution is denied.

    Oct. 20, 6:04 p.m.

    the other problem with the FDA surfdom is the hiring of the industry people moving back & forth between industries and the FDA . once in the FDA , u should not be allowed to work in the industry or invest in it or represent them or gain financailly ever again from the drug/health industry ...