Episode 147: “Fingers of Instability” with John Mauldin

In this episode I’m joined by John Mauldin the best-selling author of Bull's Eye Investing: Targeting Real Returns in a Smoke and Mirrors Market and whose “Strategic Investors Conference” is considered among the best events in the business. This is the 21st anniversary of John’s newsletter Thoughts from the Frontline aimed at helping individual investors and institutions develop a clearer understanding of the forces driving the global economy and investment markets. John has a lot of concerns, as do I, about the fate of the U.S. economy given the avalanche of spending and social engineering programs coming out of Washington. It’s spending $6 trillion on a long list of progressive dreams, raising taxes and killing incentives for entrepreneurship and growth. “I don't know any other way to say it, but it's a guaranteed recession. It just is. You cannot take 15 to 20% extra out of the economy and expect it to perform,” says John. What’s happening is otherworldly. You can't raise taxes enough to pay for this kind of spending, so you're going to have to borrow, or you're going to have to inflate. On our present course, it's going to be both. John estimates total U.S. debt in 10 years to be around $50 trillion. We just seem to be adding to what John calls “fingers of instability.” His metaphor being that we’re building an unstable financial sandpile leading to a collapse. Long term, we’re both believers in human ingenuity and expect huge advances in flourishing and growth. But today? “We have a bubble in both financial markets and government promises,” warns John. How long does this go on before they pop? We are now getting ready to find out. Please join in for a sobering, yet enlightening conversation.