The Economist - Debt Run

[classhandicapper]

http://www.economist.com/blogs/buttonwood/2013/03/financial-crisis?fsrc=scn/fb/wl/bl/thedebtrun

[HUSKER55]

THANKS FOR THE POST! I actually think I understood what he said.

I know, that is a little scary for me too! :D

[Valuist]

I think so many are just blind to reality. You can just hear them now: "My 401 (k) is back up to levels of Oct 2007, so everything is ok." Of course, they don't realize that at the same levels as 5 1/2 years ago, their money is worth 20% less.

I agree with the author; 6 years later, and what has been solved? Really nothing. The money printing is just going to cause worse problems down the road.

[HUSKER55]

the way the author said it I got the impression that stopping the printing presses, for example, for a year, would help in the long run.

did I understand that right?

[Marshall Bennett]

I think so many are just blind to reality.
It's what's called the "Normalcy Bias". You can google it, but in a nutshell it means that since nothing really bad has ever happened, it never will. Examples are littered throughout history, but the most notorious example was with the Jews in Europe prior to WWII. Instead of fleeing Germany when Hitler gained power, they remained. All the red flags were there, but they ignored them thinking nothing as terrible as what they were about to experience could ever possibly happen.
The case with our current economy could well be another example in a few years. Perhaps less. How many are truly prepared?

[Tom]

The whole deal is dependent upon the ignorance of most people.
Our economy is founded on stupid.

If people really knew what was going on, they would be armed and marching.
Too many parrots keep telling them all is well, and they are too lazy to argue.
Complacency - our real GNP.