More Optimistic about Economy than Robert Weidemer per his book ‘Aftershock’ (aftershock-economy-book-review-Part 3)
Since I read Robert Weidemer’s first edition of ‘Aftershock’ in July 2010 (and then his second edition Fall 2011), I often think about his dire prediction about the high probability of severe economic catastrophe perhaps as early as 2013. However, I have always been more optimistic than him. For those unfamiliar with Weidemer let me briefly state that his prediction in 2005 about a financial crisis in 2008 was stunningly accurate. After this prediction in 2005, he was laughed at by CNBS in 2005. Weidemer is a successful investment advisor/economist. His economic analysis of the current state of the world economy is exhausting and thorough and well argued. I greatly respect his economic analyses. Below are two of my earlier analyses of his perspectives.
Weidemer argues that the combination of growing debt and tremendous increase of the money supply by the Federal Reserve (Fed’s balance sheet is almost $3 Trillion now but only approx $1 Trillion on 2008) plus lack of political resolve to deal with the debt will result in severe inflation and a US Dollar collapse.
I feel that we still have a definite opportunity to avert this. Weidemer correctly states that we need much more than a company such as Apple generating economic growth and jobs. He argues we need many more times the recent growth of an Apple. I think the US Economy is at the verge of explosive economic growth but we must act fast – within several months. Maybe we have until early 2013. What can result in significant acceleration of economic growth which will therefore decrease rate of our growing debt and satisfy our foreign creditors? Oil and natural gas exploration and development in the US.
FACT: US has 60 years of oil and 100 years of natural gas.
Developing that unimpeded would likely result in over 1,000,000 new jobs within few years, decrease our trade deficit, grow the economy in multiple ways, and lower energy costs. Add budget restrictions and we may be on our way rectifying our huge debt.
This is my view. What do you think? Please add your perspectives here.
Economics501, a VP at major Investment Bank, 29 years on Wall Street, ex venture capitalist
April 7, 2012