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Showing posts from January, 2011

Musings with Perdomo

I've been reading Sustainagility while smoking an absolutely delicious Perdomo Reserve Champagne.  Much of this is a commentary on our times.  First, I'm blogging about it - not likely ten years ago.  Second, I bought the book sight unseen from Amazon.  And third, I bought the book on a recommendation from someone I've never met, but who recommended it on Twitter.
It is a very different book than I presumed.  If I had bought it in an old-fashioned book store, I would have looked at the jacket and probably declined.  I thought it had more to do with how businesses could become more agile.  But in truth, it is much more about the environment, global warming, alternative energy and the like.  I've found it to be interesting and relatively balanced, although the authors make some assertions about the capability of governments that I find incredible, and throw hundreds of billions of dollars around like dimes.
It is good enough that I'm still reading it and will eventua…

Sperando - Hyper-inflation?

There was an interesting and thought-provoking article in January 3rd Barron's by long-time trader Victor Sperando. Mr. Sprerando's core thesis is that there is a level of current government borrowing to spending (e.g. borrowing to fund a deficit) that is associated with hyper-inflation. And, more specifically, the U.S. is now running at that level.

Let's suspend that discussion for a moment and focus on the accumulated debt, which is approximately $14 trillion. If those notes and bills were to carry an interest rate of 5%, which is certainly not outlandish, the annual carry would be a whopping $700 billion. That, of course, wouldn't be amortizing the loan (paying any principal), but rather would be analogous to paying the minimum on one's credit card bill.

How could this debt ever be repaid? There are four ways:

1. The method that Republicans seem to be placing their hopes on: that the economy grows so fast while spending remains so constrained that our current $1…