Wednesday, July 1, 2009

Harvard's Ferguson Nails It!

Just a quick note.

Please watch this interview with Harvard professor Dr. Niall Ferguson.

Niall believes we are already in a depression. He also thinks that Bernanke is making a big mistake when he compares this financial crisis to The Great Depression of the 1930's.

Dr. Ferguson explains that this depression is different because we head into this one with huge deficits that we didn't have heading into the '30's nightmare. I see an inflationary disaster on the horizon a few years down the road.

He also laughs off the "green shoots" talk at the end of the interview.

Enjoy!

11 comments:

Jeff said...

Ugh

Jobs report was UGLY!

Market seriously selling off.

If 900 on the S&P doesn't hold we have serious problems today.

This afternoon could get ugly because no one will want to be holding stocks over a long weekend.

flipdippy said...

Too bad all this news didn't arrive on a non-holiday weekend. I can't wait to see how it is spun.

The way things are going Obama will announce the government is out of money and the S n P will rally 80 points as fears the government will keep printing money abate.

Jeff said...

Flip

LOL

So true.

DOn't you love these IOS's in California?

What a joke. I can't believe banks are going to accept this stuff.

I wonder if these IOU's will be used as a backdoor bailout. It would work like this: The bank would accept and give the IOU's to the Fed who would then exchange it into dollars.

The taxpayer once again gets screwed as a result.

Toney Brooks said...

The comment about the Schwartzies is interesting. I noted BAC is accepting the IOUs. That may tell us something.

What I find most refreshing about N. Ferguson is that the thinks beyond the end of his nose. Certainly, the structural deficit in the U.S. is a matter of grave concern. The Fed, unable to think ahead, together with this disappointing administration may change the dynamics of progression from K-Wave Winter to Spring. IOW, rather than looking forward to "beneficial inflation," we may indeed be staring at hyperinflation instead.

But, to me at least, that's like Titanic passengers worrying how deep the water is.

Jeff said...

Toney

His forward thinking is what I loved as well.

This is not going to be just one big war. Its going to be a series of battles over the next decade.

I think we will see inflationary and deflationary wars throughout this business cycle.

The timing of the Fed pulling liquidity will be critical and you can almost guarantee that they will screw it up.

This was the best interview I have seen in a long time. I will be following Dr. Fergusun closely from here on out.

getyourselfconnected said...

The California IOU situation sets up an ideal arbitrage:
-Buy as many CA IOU's as possible from scared holders for say 0.50-0.75 cents on the dollar
-wait for the FED/Treasury to backstop them at par value backed by US IOU's
-easy profit boys!

By the way, been reading the blog for a while now and I really like it.

Toney Brooks said...

Perhaps a good spot to recommend two books:

Niall Ferguson's Ascent of Money and Krugman's Depression Economics.

Krugman's book has been updated and contains good history lessons on financial crises regardless of his annoying lock-step Keynesian discipleship.

Jeff said...

Get

Welcome! Happy to have you here. Glad you are enjoying THTB.

YEah that whole IOU thing stinks to high heaven.

Wait until 30 more states try the same thing!

Jeff said...

TOney

I will have to pick those up.

There are some good You Tube videos I found with Niall.

I plan on posting them up here at some point.

Thanks for the heads up.

Jeff said...

Post up 6:30ish

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