Wednesday, September 30, 2009

Musings on the Next Shoe, Part 2

Julian Robertson, Chairman of Tiger Management, says, "I really do think the recession is at least temporarily over. But we haven't addressed so many of our problems and we are borrowing so much money that we can't possibly pay it back, unless the Chinese and Japanese buy our bonds."

Again, if the recession is over, and I'm still not convinced it is, get ready for the next shoe to drop--because it will be much worse than what we're experiencing now.

"It's almost Armageddon if the Japanese and Chinese don't buy our debt,” Robertson said in an interview. "I don't know where we could get the money. I think we've let ourselves get in a terrible situation and I think we ought to try and get out of it."

“If the Chinese and Japanese stop buying our bonds, we could easily see [inflation] go to 15 to 20 percent,” he said. “It's not a question of the economy. It's a question of who will lend us the money if they don't. Imagine us getting ourselves in a situation where we're totally dependent on those two countries. It's crazy.”












Musings on the Next Shoe, Part I.

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