From the playfield the boys raised a shout. A whirring whistle: goal. What if that nightmare gave you a back kick?
Two factors complicate the task of economic forecasting today – the first I bet you know, the second I bet you don’t…
One, obviously, is the financial mess afflicting the world. Simply put, the subprime mortgage crisis, empowered by those attempting to use quasi-governmental agencies to promote homeownership, in combination with unsustainable levels of entitlement spending, have pulled so much capital out of the system that economies are stagnating. This reduces growth and creates unemployment, which adds to the demand for entitlement spending. It’s a vicious circle spinning like a tornado from California to Greece. (…)
For some reason, by the way, the British press is providing better coverage of the Yank economy than most U.S. publications. I recommend, for those who want to read more, an excellent article by the economics editor of The Telegraph. In a story about the IMF’s analysis of the U.S. economy, he points out that “under the Obama administration’s current fiscal plans, the national debt in the U.S. (on a gross basis) will climb to above 100% of GDP by 2015 — a far steeper increase than almost any other country.”
The good news, however, is that voters are learning important lessons. Most people are incapable of changing their minds — until the pain level is sufficiently high. We’ve reached that point. (…)
The second factor that makes it difficult to keep the big picture in mind is the dizzying rate of scientific progress. Things are changing so fast that most people, including policymakers, are operating using outdated assumptions. I’m not talking simply about new gadgets and medicines — we are experiencing a global demographic transformation that affects every area of life. It is taking place on an unprecedented scale, due entirely to advances in science and technology. (…)
So let me get back to the big picture and the opportunity that increasing life spans and health care costs are creating for smart investors.
I consider health care the ultimate hedge in times of economic crisis.
