Cheer Up

The world’s biggest bond fund is dumping US debt:

You may think the Ryan Roadmap looks harsh and disruptive. But we simply must start dealing with these things right now, while we have some resources, some options, and some time. It will be much more harsh and disruptive to try to deal with these things after the fiscal crisis is upon us, when inflation is skyrocketing, unemployment is through the roof, and the markets start demanding a very high premium to finance the debt of Washington, the states, and the cities, if indeed investors are willing to do so at all.

We are in an extraordinarily dangerous period, one that calls for real leadership in Washington, where the geniuses in charge are currently locked in a death struggle over whether to cut nothing or next to nothing.

NPR? Foreign aid? Food stamps? That isn’t going to do it. The fact that we’re even having a discussion about whether we have to federally subsidize experimental opera companies in Topeka suggests that the message has not quite hit home. Maybe when the Social Security checks stop coming, Americans will notice. Which is to say, when it’s too late.

The country’s in the very best of hands.

7 thoughts on “Cheer Up”

  1. PIMCO is one damn big canary. Their dumping the debt should spark a vote of no-confidence and snap elections in any responsive system run by adults.

    Yes of course I realize that the US doesn’t have No Confidence Votes and Snap Elections. That’s not the point. Usually our system is pro-stability because it means that the Government and do the responsible thing and not worry about a snap election next week. But now our system is anti-stability because we elected a rigid-thinking socialist in a moment of national madness and now we’re stuck with him for another two years. I don’t think we can wait that long.

  2. We’ll just have to see. But I must agree that this is a bad sign. It reminds me of when Warren Buffet got out of the high tech market in late 1999 or early 2000. PIMCO may never be right, but I agree that it’s a serious warning sign we should heed.

  3. But, but, but Rachel Maddow and Michael Moore said there was no debt problem. I know, I’ll read Krugman and find out what our Chinese Overlords would do.

  4. If you read the article you would see that he was never a fan of U.S. Bonds and had zeroed out his position before in 2009. So nothing surprising or Earth shattering here….

  5. If you read the article you would see that he was never a fan of U.S. Bonds and had zeroed out his position before in 2009. So nothing surprising or Earth shattering here….

    2009 isn’t the beginning of time. And he reverted to that policy in the first few months of the new Congress. Not what I’d consider a good sign, especially if you were hoping a Republican-dominated House would help.

Comments are closed.