John Mauldin: It's Time To Make The Hard Decisions

Back in the 1930's, Irving Fisher introduced a concept called the 'debt supercycle'. Simply put, it posits that when there is a buildup of too much debt within an economy, there reaches a point where there simply is no other available solution but to let it rewind.

We are at that point in our economy, as are most other major economies around the world, claims John Maudlin, author of the popular Thoughts from the Frontline newsletter and the recent bestselling book Endgame: The End of the Debt Supercycle and How It Changes Everything.

For the past several decades, excessive and increasing amounts of credit in the system have allowed us to live above our means as both individuals and nations. We've been able to have our cake and eat it, too. Now that the supercycle has ended and the inevitable de-leveraging cycle is staring us in the face, we will be forced to set priorities in a way that has been foreign to our society for over a generation.

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[charronfamilyconnect]

@Bigdawg3433 Then rent the sucker out or raise the rent in line with taxes. Sounds simple enough. What doesnt have tax on it other than gold and silver? I have enough of that for any emergency!

[Bigdawg3433]

@charronfamilyconnect you have to pay taxes on RE

[Bigdawg3433]

Do you see a 30-40% US dollar devaluation?

[charronfamilyconnect]

What if your like me and have a paid off house, $50,000 in physical silver/gold, and $150,000 liquid cash, what would you do? I am thinking of buying real estate with my liquid cash outright, and earning 10% return on that money. Isn't that better than putting it in a damn bond/t bill or the paper world of the stock market? Isn't a plan for 10% return on something you owe nothing on, a good way to go? Anyone have opinions? Thanks!

[wreelp]

"Are you smoking some funny data?" lol

[200FuckingPonies]

I read his book, very good overview of the hole we've dug ourselves into with all this debt. I was delighted Chris got him on so he could ask him about peak oil and other limitations to growth. Was left underwhelmed to be honest. While obviously an economic expert, I think he falls into the same trap as many others from his profession, thinking once this debt problem has worked its way out of the system we'll return to growth as usual. Technotopian stuff based on hope rather than facts.

[1977Melville]

@CandianBear. 55000 yrs? Wow! Any books on this?

[christo930]

@freesk8 Some of our best years in our existence had 90% marginal tax brackets. It's true that there were a lot of loop holes, but it didn't get them down below 35, which is the current marginal tax bracket. The real problem is we have too much unnecessary regulation and too few necessary regulations. There are parts of the economy significantly over regulated and complex and there are parts like the wild west.

[scottj719]

Truthers fall into the same trap as everyone else, maybe even more so which is (If somebody thinks other than I do, they're a liar, a fool, mis-informed, deliberately mis-leading, etc, etc. etc.) If somebody walks up to you and says there is only on way to salvation and that's Allah. Did they lie to you, or did they express their belief to you? There are people and forces that are trying to influence you, infact anybody and everybody is trying to influence you but not everybody is malevolent.

[freesk8]

@christo930 That's not true. Just think about it. If the tax rate is 75%, who would try to increase their income? Why bother? But the difference between 5% and 6% tax rates is negligable, yet yields low revenue for the govt. There is a revenue maximizing marginal tax rate, and it is somewhere in the middle. Some researchers put this revenue maximizing tax rate at around 30%. Higher than that you reduce incentives and reduce GDP growth and employment.