“Incompetence is the disease of idiots. Overconfidence is the mistake of experts … Incompetence irritates me. Overconfidence terrifies me.” Malcolm Gladwell
Steve Romick’s latest message suggests that continued easy monetary policy will not end well. “Despite Mr. Bernanke’s poor batting average (at predicting the future), his confidence appears unshaken.” We share Steve’s fear and recognize that continued monetary easing seems to be less fruitful each time both in its effects on the economy and asset prices. We continue to fear the government’s continued shift to government-managed capitalism in an environment where “almost 90% of our nation’s tax receipts are now paid directly to individuals versus around 30% in the 1960s.”
We are diligently observant of changes in the economic climate that may occur and the possible impact of changes in government policy after this election. At the same time we are unfortunately aware that as government “kicks the can” down the road that the “can” might turn out in fact to be a building snowball that can continue to build for some time depending on when fundamental problems are recognized and addressed.
