Monday, November 24, 2008

Tin Foil Moment

As you guys know, I am rather fond of making wacky and worrisome predictions, so I am going to put on my tin foil hat for a moment to make a prediction for next year.

I am sure you all recall Biden's speech where he mentions a challenging moment that Obama will face early in his term. Fully cognizant that this is an otherwise low probability event, and as such, I am probably making a fool of myself, I am putting it on the record now that I think it will be a major currency crisis involving a collapse in the dollar and/or a collapse in the price of Treasuries. It will be signficant enough to put the survival of the dollar as a reserve currency in doubt and will create severe dislocations throughout the economy, including likely shortages of some goods.

I'll further posit that the government will use the crisis to scare Americans into an otherwise unwise set of policies, like the Patriot Act following 9/11. But considering that pretty much every crisis of the last decade has been greeted with idiotic policies, if an event occurs, foolish legislation seems certain to follow.

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