Bill Julian

I highly recommend you read Bill Julian’s latest letter. I really liked it. Here is a snippet from the letter. He compares wildfires to today’s economic (mis)management:

The tools that Washington will use to try to control these burns really amounts to its own
balance sheet together with a policy of extending, amending and pretending. (The
FDIC’s management of failing banks is a prime example of the latter.) As long as
investors continue to believe that the Federal government’s balance sheet can withstand
the heat, it is likely that the government will succeed in moving us to a “new normal”
best described by Bill Gross– an environment of low interest rates, low growth, more
frequent recessions and low returns. However, if investors get nervous along the way,
interest rates on government debt could spike. That would incapacitate the US
government and the controlled burn would soon turn into an uncontrollable firestorm –
one that will last until it burns itself out.

Here is the link: Bill Julian Letter