I think we've gotten into a cycle of ever larger bailouts.
a. Mid 1970's Penn Central - I think that was around $200-million or so, although the continuing subsidy of Amtrak makes it much higher, mitigated somewhat by the Conrail IPO in the early 1980's.
b. Early 1980's - Chrysler - $1.2 Billion, paid back.
c. Late 1990's - LTCM - about $4-Billion.
d. Bear Stearns/FNM/FRE/AIG/ and entire US banking system - maybe $6-Trillion.
e. Bailout of Greece
The bailouts keep getting larger, and the obligations compound. The bailouts of the rest of the PIIG's are coming next, then the whole system will probably collapse upon itself as there will no longer be anyone willing to fund this ponzi scheme of bailouts.
I think we will not see the riots and other big social distortions in the US until we get a huge failed T-bill auction and the market for T-bills longer than 2-years drys up.
We may be about 7 years from a complete collapse, with a near collapse probably coming in the next 2-3 years, followed by a jobless, anemic recovery of about 3-4 years.
Towards the end of this decade we will have a restructured private sector, a restructured public sector, and T-bills paid off at probably $0.75 on the dollar, setting the stage for 2-decades of strong, sustained growth.
We will also have people working into their 70's instead of their 50's and 60's. That closely follows societal norms the past few hundred years (retirement, if ever attained, was only for a few years prior to death until the past 40-years or so). |
