Blog: Jude's Endgame

Written January 11, 2012 by Jude McDaniel

I have been reading Jon Mauldins book Endgame, written in the fall of 2010, he talks about the world wide debt crisis and why this time is different.  What I like about the book is that he is great at giving examples and writing so the newbie can understand.  Before 2008 I did not need to know very much about Europe or Asia other than they were growing and that there was opportunity to invest and grow with them.  Boy, all of that changed.

There are two illustrations from Mauldin’s book that hit home with me.  Crisis always comes and you never know when they hit if it will be the “big one” that brings everything down (the bank insolvency of 2008 which exposed the mortgage industry and brought the market and the housing industry and the economy down)  or if it will be an interruption, and then things recover pretty quick (like 9/11).    My thinking is that the big one may never come to the United States if we get our act together and start to make decisions about the debts.  There will be a lot of little faults, but we can get through them if we start to concentrate on growth (see our February newsletter on the debt).

The other thing Mauldin said that got me was the triangle relationship between government debt, corporate debt and personal debt.  There is only so much money.  When we concentrate on paying one down the other two tend to increase.  Which is why we have the government putting policies in place that encourage families to spend more money and not pay down their own debts.  Don’t listen to them; bring your personal debt down.  In the end the government is not likely to take care of you and you won’t like it if they do.

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