Jim Grant of Grant's Interest Rate Observer, an iconic bi-weekly that periodically even talks about interest rates, penned another historically interesting, metal loving, something's gotta give, fun read in TIME Magazine. In other words, hardly anyone will read it. But read it you should and really think about the title, "The United States of Insolvency"
Mr. Grant is careful to hedge any call for collapse, return to yellow metal, or even trouble. But rest assured, bad things are coming folks. You see, there's "too much debt" and "the deficit is too big" and "rates are too low (or too high- its hard to say)" and "the recovery has been weak" and "Medicare and Social Security will bankrupt America."
There's a great scene in Blazing Saddles where Sheriff Bart tells the Wacko Kid, "Anyone who drinks like that will surely die." To which the Kid replies, "When?" Any self respecting market participant of even moderate concern sides with the KId. In the words of Tudor-Jones, "Don't tell me why, tell me when."
My long held belief that "Concern for public debts is inversely proportional to economic knowledge" is well documented (and a big reason my CNBC hits declined during Tea Party [remember them?] water carrying). The unique characteristic of this cycle - which will turn roughly 9 months after the yield curve inverts - has been the near universal ignoring of its existence. For better than 7 years, a sub-industry of counter-factual reasoning has blossomed while the majority of Americans - and American public companies - have improved.
I enjoyed reading Mr. Grant's missive. I enjoyed it even more sipping wine on a sunny Spring day in the vineyard. When the cycle actually does turn, as all eventually do, most will have to simply admit they missed the ride.