I’m currently reading “Mobs, Messiahs, and Markets” and I wanted to share a passage with you that I thought relevant with all the past articles about entities that are “too big to fail.” Now what makes this book particularly intriguing to me is that it was published in 2007, so it was probably written throughout 2006-2007, and there’s no way it could have known about many of the things the authors touch upon, and yet they probably don’t even know how spot on they were. I highly recommend this book as MarcFaber wrote the foreword and calls this a modern day “Reminiscences of a Stock Operator”.
But the United States has so cleverly deceived itself that it believes it gets its tribute from globalized commerce itself and from the loans given to it by its tributary states and trading partners.
and
Paul Kennedy writes, “It is simply staggering to learn that this single country – a democratic republic that claims to despise large government – no spends more each year on the military than the next nine largest national defense budgets combined. What does this mean? Just as the U.S. economy is not thought to be too indebted to fail, has the U.S. military become to big to fail?
I’d like to know how much we spend on our defense two years after the fact, with all the wars we have going on in Iraq, Afghanistan, and soon to be Iran. It’s probably the next 18 defense budgets combined. When will this madness stop? We couldn’t afford this military spending before the financial crises and yet we continue after. While I’ve speculated in the past that the U.S is the last great bubble to burst with the suggestion of playing it via bonds. It could be possible that the military is the last great bubble to burst and if that’s the case there will be no speculative plays, no hedges, and absolutely no winners.
