Sunday, June 05, 2005

Funds Manager Predicts Global Economic Collapse

There was an interview on CNBC of the renowned
funds manager Julian Robertson. He is one of the
greatest of the old-timers. 53 years on the
Street. He manages the Robertson group of funds.
They used to call him, still do call him ‘Never
Been Wrong’ Robertson. He has predicted every
economic cycle, every debacle, every bull market,
and every bear market.

Of course, he’s a very old man now. But his
reputation on the Street is like nothing you
could imagine. When the segment of his interview
was through, his comments alone took the Dow
Jones down 50 points. Just on his comments alone.
That’s how powerful this man’s reputation is.

Robertson was actually a teary-eyed, an old man.
When Ron Insana asked him about his predictions,
he said that he’s worried about the speculative
bubble in housing and the fact that more than 1/4
of all consumer spending is now sustained by that
bubble, plus the fact that 20 million citizens
could lose their homes in a collapse of the
speculative bubble in housing, and that the Fed
and, indeed, central banks worldwide would act in
concert out of desperation to reinflate the
global economy in the process, creating an
inflationary spiral unheralded in the economic
history of the planet.

How would central banks do that 'in concert'?

Even if they did, the Bank of Japan has been pumping
vast quantities of money into their economy for
some time. Now look at their rate of deflation.

In case you didn't know it, money pumps are supposed
to cause inflation, not deflation.
Insana then asks, “Where does it end?” And he
said, “Utter global collapse.” Not simply
economic collapse; complete disintegration of all
infrastructure and of all public structures of
governments. Utter, utter collapse. That the end
is collapse of simply epic proportion.

In 10 years time, he said, whoever is still
alive on the planet will be effectively starting

The link.

Other than that one objection I have above, I have
little doubt the man is right but I'm betting on
a primarily deflationary spiral til little, if any,
of that paper showing pictures of Glorious
Leaders shows up for quite some time.

Here's a bit about why I think a collapse is

The predominant philosophy, mostly in the bigger
cities of the world, will soon be summed up by
this meme:

"What's mine is mine and what's yours is mine."

All governments have been practicing varying
degrees of this since day one including using your
life to protect their supporters. This meme has
become pandemic and will rapidly grow ever larger.

To survive the coming collapse, best to look for
sparsely populated rural areas where most in the
area still subcribe to this meme:

"What's mine is mine and what's yours is yours."

...and mean it. With a vengeance when necessary.

See the movie, The Postman, to get an idea.

All the wrong reasons will be cited for the fall
which will just prolong the misery. The prominent
ones will be greed and the free market. And almost
no one will know that the free market was
something that's never existed and won't exist before
the shit flies except in a few isolated pockets.

"We must think of human progress, not as of
something going on in the race in general, but as
something going on in a small minority,
perpetually beleaguered in a few walled towns.
Now and then the horde of barbarians outside
breaks through, and we have an armed effort to
halt the process. That is, we have a Reformation,
a French Revolution, a war for democracy, a Great
Awakening. The minority is decimated and driven
to cover. But a few survive- and a few are enough
to carry on." --H. L. Mencken

Like I've said a number of times here before, "Do
you have your wooden hoe, burlap sacks and donkey

Of course, there's more to the story...a lot more.

Stay tuned.