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  • The Cancer of Debt and Deficits

    We are coming to the point in the United States when even the US government will no longer be able to borrow at very low long-term rates. That point is a few years off, and we have time to change paths; but as I have shown in previous letters, the longer we wait to get the deficit under control, the fewer choices we have and the more painful they are. NO country can run deficits the size we are currently running, along with unfunded deficits over four times the size of the economy and a growing overall debt burden, without consequences. At some point, investors in bonds will start wondering exactly what the process is by which they will be repaid. And what will the value of those future payments be?

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  • Staring into the Abyss

    Choices, Debt, and the Endgame
    Staring into the Abyss
    An Unintended (and Very Negative) Consequence
    A Preview of Coming Attractions
    Hallucinogenic Data and Other Fun Activities
    Gentlemen, Choose Your Disaster
    What Europe Should Do
    South Africa and Sweden

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  • 2012: A Year of Choices

    The Consequences of Path Dependency
    There’s No Going Back
    The End of the Debt Supercycle
    The Time for Hard Choices
    Hong Kong, Singapore, Bloomberg, and a Personal Note

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  • Collateral Damage

    What Next? Where Next?
    A World with Too Much Debt
    Debt Restructuring and Write-Offs
    The Euro Zone: Pouring Fuel on the Flames
    What If… ?
    The Year(s) Ahead
    Auld Lang Syne

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  • Can “It” Happen Here?

    Can “It” Happen Here?
    How Could This All Happen?
    Currencies, Culture, and Chaos
    What Causes Hyperinflation?
    A Very Frank Idea
    But What About the $70 Trillion in Off-Balance-Sheet Debt?
    New York, London, South Africa, and the Future

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  • The End of the World, Part 1

    What Is the CBO Seeing (or Smoking?)
    The End of the World, Part 1
    Who Will Rescue the Rescuers?
    The Problems of Debt in the Eurozone
    Thoughts on Jackson Hole
    Some Thoughts on Getting Older

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  • An Economy at Stall Speed

    In This Issue:

    An Economy at Stall Speed
    Is There a Recession in Our Future?
    What I Told the Senators
    Escalating Eurozone Interbank Liquidity Crisis: Dollar-Euro Impact?
    Time for Friends, Fish, and Wine

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  • Kicking the Can Down the Road One More Time

    In This Issue:

    Kicking the Can Yet Again
    It’s Not Just Greece
    Who is Going to Buy that Debt?
    You Have to Admire the Commitment
    The Problem with US Employment
    Washington DC, Vancouver, NYC, Maine, and now Europe

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  • The Plight of the Working Class

    In This Issue:

    The Plight of the Working Class
    Can You Say Jobless Recovery?
    Drowning in Debt but Getting No Growth
    The Cancer of Debt
    New York, Portland and La Jolla

    Clowns to the left of me, Jokers to the right,
    Here I am, stuck in the Muddle Through Middle with you!
    –With thanks to Stealers Wheel

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  • The Future of Public Debt

    In This Issue:

    The Future of Public Debt
    A Bit of Background
    Drastic Measures
    The Future Public Debt Trajectory
    Debt Projections
    Phoenix, Tokyo, and London

    This week I find myself in Bangkok, and I must admit to enjoying the experience a great deal, so much so that I am going to preview a portion of my coming book, Endgame, so that I can go back out and play tourist. Next week I get back to my more or less regular schedule, but I think you will enjoy this first portion of chapter six, where we look at an important paper from the Bank of International Settlements on 'The Future of Public Debt.' It is not a pretty one. We are watching one of the last great bubbles begin to deflate - the bubble of government and government debt - all over the developed world. This is a serious weight that will be a drag on our growth, and it is interesting to contemplate as I sit in Bangkok, a city that is vibrant and teeming with opportunity.

    Endgame will be in the bookstores in a few weeks, but let me once again ask you to not pre-order the book from Amazon or online. Pre-order books do not get into the book sales numbers (long story and more information than you want to know). I encourage you to pre-order from your local book store if you have one. Let me note that in the portion below, the pronoun we is used a lot. It is not the royal we - I do have a co-author, Jonathan Tepper, and this book has very much been a collaboration. More on some Thai thoughts at the end, but let's jump into today's Thoughts from the Frontline.

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  • Some Thoughts on Market Timing

    I am neither a market timer nor the son of a market timer. I left my office in the Texas Rangers ballpark this year, and they went to the World Series. I bought Dallas Cowboys season tickets for the first time in 50 years, as they went down in flames. But I do know a few very good timers, and they are sending out warnings. Today, we look at a few of these, as it might pay to hedge some of your equity portfolio as we go into the New Year. I also answer some questions as to my view of the municipal bond market, given the 60 Minutes report of last week. The answers may surprise you. And as we approach the end of the year, I suggest a place where your help is most needed. I will try to keep it shorter, as there are more important things at this time of the year than the markets.

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  • Kicking the Can Down the Road

    How often did we as young kids go down the street kicking a can? 'Kicking the can down the road' is a universally understood metaphor that has come to mean not dealing with the problem but putting a band-aid on it, knowing we will have to deal with something maybe even worse in the future.

    While the US Congress is certainly an adept player at that game, I think the world champions at the present time have to be the political and economic leaders of Europe. Today we look at the extent of the problem and how it could affect every corner of the world, if not played to perfection. Everything must go mostly right or the recent credit crisis will look like a walk in the Jardin des Tuileries in Paris in April compared to what could ensue.

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  • Unintended Consequences

    Correct me if I'm wrong, but I seem to remember that one of the reasons for QE2 was to lower rates on the longer end of the US yield curve. Clearly, that has not happened? Today we look at come of the unintended consequences of monetary policy, turn our eyes briefly to consumer debt, and wonder about deflating incomes. There are a lot of very interesting things to cover. (This letter will print long, but there are a lot of graphs. Usual amount of copy.)

    But first, the are some changes and upgrades being made to the database that houses the list of my 1.5 million closest friends. That means that some of you will be reading this on the website this week, rather than having the letter sent directly to you. If this letter doesn't show up for some reason, you can always go to www.investorsinsight.com and get it directly from the website. We should be back on track by next week. Sorry for any inconvenience.

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  • Texas, Ireland and Ten Little Indians

    Why is it that the Irish must take upon themselves the debts of their banks, which in reality are debts owed to German and French banks? Why should the Germans bail out the Greeks and the Spanish? Is the spread of 'contagion' starting to taint the debt of Italy and even Belgium, the home of the EU? This week we look over the pond (of the Atlantic) and wonder how all these things will end. As I noted last week, we are getting a string of not so bad news out of the US, so now there are really just two things in the short term to worry about (at least in terms of a positive US GDP): will Congress extend the Bush tax cuts and will Europe sort itself out?

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  • First, Let's Lower the Bar

    China's currency is rising ever so slowly against the dollar. But is that hurting China? We will look at a very interesting chart and some research. And then we'll gain some more insight into why the employment numbers seemed to surprise. I guess if you lower the bar, it's easier to jump over. I also deal with the pushback from last week's Outside the Box! And Ireland is on my radar. There is a lot to cover, so let's jump in.

    I start this week's letter on a flight from Cleveland (where I was at the Cleveland Clinic meeting with my good friend and doctor Mike Roizen (of Oprah and the various 'YOU' books with Mehmet Oz) on some non-health-related business, and we talked last night about the state of health care. Mike keeps pointing out that much of our health-care cost comes from chronic diseases that are either directly or partially lifestyle choices. And he is right. The data shows it. Smoking, overeating, lack of exercise - all contribute to our health-care bills. And health care was on my mind.

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