It appears no one really knows the coming effects from the debt debate, or a default, if that should happen. The “predictions” are all over the board as we head into territory never before visited. Analysts tell us this and economists tell us that, but since we have never been here or there before, it is all just speculation. Most speak to doom and gloom, yet others point to the positives of default.
For example, and stay with me here, one analyst suggested a U.S. default would actually drive bond yields down, not up. His theory is that if default occurs, the rippling will affect foreign financial institutions to a greater degree than those here in the U.S., thus those financial institutions outside the U.S. will flock to the U.S. bond market because the U.S. bond market will be the safest place to go. Wow!
Oddly, this morning, as I pondered all of this debt-ceiling input, I was reminded of my time sailing a small boat on the edge of the Grand Bahama Bank. Hundreds of islands dot the seascape, some big some small, and the thrill was sailing from island to island, often not knowing what lay ahead. The sailing was easy and fun, as the water on the bank was calm and shallow. The scariest part was getting there and then getting back. Coming from and returning to Florida, our tiny fleck of a boat had to cross the Gulf Stream, some of the deepest waters on the planet. I’ll never forget the feeling of singularity as the coast of Florida disappeared into a fading horizon. Once gone, only deep, shimmering blue-green water surrounded us in every direction. Above us, blue sky and white clouds dominated for 360 degrees. In every direction, as far as our eyes could see, our tiny little boat was alone in that vast space.
It took me a bit of thinking to make the connection between that adventure long ago and the events unfolding daily in this my life now, but I did. The truth is back then that feeling of being alone, that feeling of sailing somewhere I had never been scared me. Yes, I was afraid of the deep, deep water, and I was afraid of the reality that once out there, no refuge existed. If something unexpected happened, there was no place to go except down. I was afraid of the unknown dangers of being out in the middle of the ocean on a very small boat …
Today, as I listened to a number of “connected” folks talk urgently about what is going on, I detected, no sensed, that same fear of the unknown, a fear of being in the middle of something so much greater than we understand, something filled with unidentifiable yet very real danger.
Our politicians are taking us into deep, uncharted waters, and the truth is they have no idea where we will end up. They are willing to risk it all for the hope that when we get to the other side, the sailing will be easy in calmer, less deep waters. Somehow, default will lessen the issues we face now. The part I remember most from my sailing adventure is that before we got to that easy sailing, we had to cross the deep Gulf water, and my most profound memory of that time out there is that if something unexpected happened, we had nowhere to go but down into that deep, deep water …
Trade in the day – Invest in your life …
