Posted by
john on Wednesday, November 19, 2008 10:22:24 AM
In the November 17 issue of Forbes ("The Coming Shakedown"), Bill Baldwin spells it all out. The Treasury is going to be very, very hungry. From the standpoint of a greedy, avaricious uber-state, it only "makes sense to go after those citizens who are hardworking and frugal. You can't pick an empty pocket." In short, there is going to be an attack on savings. The concept of growing our way out of the hole we're in is "no longer operative". In fact, it hasn't been since November, 2006.
What does this mean? Per Mr. Baldwin, "municipal bond coupons... will be taxed.... Retirement accounts will be looted." Most ominously, there is always inflation. What better way for debtors (U.S. government, underwater homeowners) to escape ruin than to pay creditors with inflated dollars. Conclusion: it's going to be bad to be a creditor. Or, as Mr. Baldwin concludes, "it's a bad bet to buy long dated bonds." Real estate, or even stocks, will be better. Gold anyone?