Saturday, June 6, 2015

Peterson Foundation Fiscal Summit: Paying for the Past

Here is a link to a video of a recent discussion of the financial problems facing the US due to the ever increasing debt overhang and the expansion of entitlement programs. Participants included former Fed chief Alan Greenspan, head of the Dallas Fed Richard Fisher, and former Bush Administration economic adviser Lawrence Lindsey.

They discuss the large problems facing the US and offer some ideas on what to do. But at the end of the discussion, they mostly agree that we are more likely to suffer another major crisis because the actions needed to avoid one are not being taken. If you have followed these issues for any length of time, you understand that the political division in the US has led to gridlock on any possible solutions to the problems. Nothing at this point seems likely to change that. It's as if only a crisis might break the impasse.

If we do eventually get another major financial crisis, it will bring Jim Rickards forecast into play and very likely lead to some major monetary system change. That is what we follow here on this blog. You can also watch the video by just clicking on it below.

Added note: Bill Holter reviews the above discussion from the point of view that sees the central banks as a main contributor to the problems being discussed. His review gives you a good idea what the central bank critics think about the situation. I can say from reader feedback that there are a lot of people who take this view of the situation.

All of this ties in to one of the two big questions I have which is: Will we get another major financial crisis that disrupts the current monetary system?

The followup question is: If we do get another major crisis, how will the public react to it?

Will people trust those who have been running the present system to fix it again or will they agree with Bill Holter and decide that those running the present system are to blame? If they agree with Peter Schiff and Mike Maloney in this video discussion, they may blame the central banks if we get another crisis. This video got over 45,000 views in just four days after being posted to Youtube (more than twice the views of the video discussion above). This illustrates how many people are listening to this point of view.

These are all unknowns if we truly live in a complex system as Jim Rickards believes. I do not claim to know the answers as explained in this recent blog article. All we can do here is follow events and see what actually happens.

Added note: In response to this blog article a reader sent me a link to his own article. He gave permission for me to provide the link here below:


  1. I tend to agree with Schiff and Maloney. If another financial crisis occurs, I think people will lose faith in the central banks, politicians, and regulators. I believe we will see a shift away from government run money, and toward money created by international tech companies who have proven to be stable, profitable, reliable and trustworthy (Apple, Google, Amazon, etc) and have provided people with products and services they want (but not forced on). I'm not sure governments will survive the next financial crisis.

  2. FWIW, my reader emails run about 75% in favor of the Schiff/Maloney view. It seems like most who take an interest in this topic are suspicious of the central banks in general. I suspect most people don't pay much attention to the topic unless a crisis impacts their own lives. That is where it could get interesting if we do get another big one.