Tuesday 29 September 2009

Surprisingly candid interview on CNBC

This is a surprisingly candid interview with a smart player from the world of finance, on CNBC.

Notice how the hosts are quiet and actually listening to the guest for a change, not butting in with some smart-alec comment or put-down every few seconds. This is highly unusual at any time, but especially when the guest is talking down the almighty dollar or, horror of horrors, suggesting gold might significantly appreciate. Normally this kind of talk would invite a cat's chorus of derision from the hosts.

Notice also how the topic is matter-of-factly discussing the cutting in half of the dollar's value over the next few years, and how this is unavoidably necessary in order to stand any chance of meeting the US' massive current and future debt obligations, and that this is not disputed because the case presented as to why is copper-bottomed and indisputable based on clear and easily verified facts. For sterling-based readers in the UK, think also about the UK's current and future debt obligations, in the face of rapidly declining tax revenues, and you can see that we are in a similarly precarious position right now, and the only answer is the same as for the US: print more pounds and thereby cut the value of each pound in half so the public debts are more manageable.

You'd better hope the authorities in both countries can manage to keep the confidence of the rest of the world up, so they don't get a lot more depreciation than they wanted, and it gets really out of control. To my mind, that is a very, very big ask indeed.

Very interesting to see this on mainstream media.

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