This Time It Is Different
While we have recorded history back to inception and reconstructed the monetary system of the world with interest rates, commodity prices, and labor costs along with the various debt crisis that has toppled every government since the beginning. We are not the only ones to have observed the fact that government debt has never been worse.
There has been a fantastic propaganda machine aided by the mainstream media that portrays the private sector as evil and the public sector as magnanimous, the truth is in the facts. Government routinely default because they prosecute and write laws and within that power, they always exempt themselves with so few exceptions.
It the excellent review of government defaults This time is Different – Eight Centuries of Financial Folly published by Princeton University Press in 2009 by Carmen M. Reinhart, Kenneth S. Rogoff, their Preface begins:
“Our basic message is simple: We have been here before. No matter how different the latest financial frenzy or crisis that always appears, there are usually remarkable similarities with past experience from other countries and from history. Recognizing these analogies and precedents is an essential step toward improving our global financial system, both to reduce the risk of future crisis and to better handle catastrophes when they happen.”
So for those who do not believe we face a Sovereign Debt Crisis of record proportions that will alter the future as we know it, well all I have to say is good luck. Now what those of us who just look at the track record and do not think this time is different, we need people like you for someone always has to be on the other side of that trade when it is time to short.
So thank you, I hope you have very deep pockets. They always default so I think the odds are on our side.