Mauldin: We're Headed For A Black Hole

Common Sense Commentary:  Every rational, thinking financial and economic writer and commentator I know of has been sounding the alarm on unsound political policy as related to National and State governments for years.  I too have harped on the subject for seven or eight years.  Common sense should have alerted anyone with it, that our U.S. faulty policy and non-sense political  decisions would eventually lead to financial ruin.  It didn't start with stupid politicians but with immoral ones elected by a greedy electorate.  The Democrats are raking Romney over the coals for supposedly insinuating that 47% of Americans want the Government to take care of them.  I don't know if he said it or not.   He was not my choice for the Presidency but, whether he said it or not, it isn't politically correct, but it is pretty close to the truth. Political Correctness may get a politician elected but it will work against him at the Great White Throne.  The only ones I hold greater contempt for that "Politically Correct" politicians
is "Politically Correct" preachers.  Both should tell the truth whether anyone likes it or not ... but especially the preacher.  There are two types of "Black Holes".  One is in "outer space".  The other one is also called "outer darkness", a term Jesus used three times in Matthew...  in reference to the Lake of Fire ... and maybe they are one and the same.  The term "Black Hole", used below by Mauldin,  is quite descriptive of the incomprehensible debt our government has accumulated.  It's about the only term useful in defining the immeasurable extent of that debt. RB

 

 

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 John Mauldin: Thoughts From the Frontline...

We're Headed for an Economic Black Hole

"Concern about politics and the processes of international co-operation is warranted but the best one can hope for from politics in any country is that it will drive rational responses to serious problems. If there is no consensus on the causes or solutions to serious problems, it is unreasonable to ask a political system to implement forceful actions in a sustained way. Unfortunately, this is to an important extent the case with respect to current economic difficulties, especially in the industrial world.

I think we can draw a rough parallel between a black hole and our current global economic situation. (For physicists this will be a very rough parallel indeed, but work with me, please.) An economic bubble of any type, but especially a debt bubble, can be thought of as an incipient black hole. When the bubble collapses in upon itself, it creates its own black hole with an event horizon beyond which all traditional economic modeling breaks down. Any economic theory that does not attempt to transcend the event horizon associated with excessive debt will be incapable of offering a viable solution to an economic crisis. Even worse, it is likely that any proposed solution will make the crisis more severe.