Last week I was interviewed by Constantine von Hoffman for a CBS news article on regarding economic nightmares for Obama's 2nd term.
Calculated Risk was interviewed as well. His nightmare scenario is war, specifically noting the rise of Golden Dawn.
Eight people were interviewed for the CBS article but the organization was maddening. Specifically, there is no way to see all 8 viewpoints of people interviewed at once. You have to click through pages one at a time. I was curious enough to do it, Calculated Risk gave up after the second click.
In a clear effort to generate clicks, articles like this are an extreme turn-off and actually counterproductive. That no readers emailed me with a link to this article says no one bothered clicking through all the pages.
I talked to von Hoffman about numerous things, only one was mentioned in the article. Many of my points were of the nature of things I think should happen (and would benefit to the global economy over the long run if they did), but most economists would disagree.
Mish Nightmare Scenario
- Not Addressing the Fiscal Cliff
- Breakup of the Eurozone
- UK exiting the EU
- China Growth falls to Zero Because of Rebalancing
- Currency Crisis in Japan
- Failure to address pension problems in US
- Rise of the Neo-Nazi Golden Dawn Party in Greece Leads to War
I mentioned all of those things and more. The first four are things that I actually believe need to happen (and the sooner the better) to prevent a global nightmare!
Unfortunately, most economists want to kick the can down the road still more.
For a discussion of the fiscal cliff, please see Misdiagnosing the Fiscal Cliff; Shrill Voices and Economic Nonsense; Tyranny of Balanced Budgets
A breakup of the eurozone is inevitable in my opinion. For a detailed explanation why, please see Spain's Unpleasant Choice: Accept Lower Wages and Still Higher Unemployment, Leave the Euro and Default.The sooner a breakup happens the better. Delays end up like Greece.
In regards to China, please consider "China Rebalancing Has Begun"; What are the Global Implications? Michael Pettis on China Rebalancing, Chinese Price Deflation, and Spain Exit from Euro; Target 2 Revisited.
Note that can-kicking exercise in Greece has led to the rise of the Golden Dawn party. Expect the same to happen in Spain if the agony lasts long enough.
Essentially, my nightmare scenario is more can-kicking exercises until the entire global economy blows up in a currency crisis and radical parties like Golden Dawn gain prominence everywhere, fueling political as well as economic violence.
I had war in the Mideast with spiking oil prices as part of my nightmare scenario that I mentioned to von Hoffman. I simply forgot to mention it when I typed this post up earlier today.
Mike "Mish" Shedlock