There was nothing new on the program that wasn't covered in Saturday's Summary. There was nothing about the stock market -- there was lots of Ginnie Mae talk, and lots of political talk. However, there was a very interesting exchange between Brinker and his guest-speaker. It was short, so I transcribed it for you.
Brinker's Sunday guest-speaker was Michael Panzner: "When Giants Fall: An
Economic Roadmap for the End of the American Era."
At the very end of the interview, after Brinker asked Michael Panzner about “default vs inflation.” Brinker said: "I assume you come down on the side of inflation and you’re not predicting a Treasury default.”
Panzner answered: “Well, I don’t rule it out. And I also think that both could happen, but certainly inflation will happen first. The problem is, and this is the same issue that you’ve had in other countries that have been faced with a similar choice, that you inflate to a point where you can no longer inflate. Where people won’t take your paper anymore and that’s when you get to the issue of default. I know it’s hard for people to even conceive of that in the case of the United States. But once you get a loss of confidence like we saw in the U.S. financial system, things can turn on a dime. And I think you can sort of map that out and extrapolate that to the level of a country, and I think it’s quite conceivable to happen to the U.S.”
Bob Brinker said: “You think it’s conceivable that the United States Treasuries would default on their obligations?”
Panzner said: “I think that is less than a…….I think it is not a completely unrealistic possibility.”
Brinker said: “But first, you think we’d go through an inflation period.”
Panzner said: “Absolutely. Not only do I think we will, I’m pretty confident we will. No one knows the future for sure, but I think we are certainly on the path that other nations have engaged in prior to a tremendous bout of inflation.”
Brinker said: “Michael thank you so much for your time……….” [Commercial begins]
[After commercial] Brinker said: “ In reflecting on our guest’s comments, certainly consistent with our comments that we have to continue to monitor inflation risk. No question there. And we will continue to do that because we have to watch that one very, very closely down the road. With reference to his opinion that the Treasury could go into default, I’m going to take the other side of that. I don’t think that’s a realistic possibility that the Treasury declares default on its obligations. I’ll disagree with him on that one.”
Saturday and Sunday Moneytalk programs are available for free listening or downloading at KGO810 Archives. -- 1-4pm hours. For the Panzner interview, go to this [LINK] click on "Sunday" and go to the 3-4pm hour.
I think everyone is familiar with the picture of my two Himalayans in my profile. I just started the monumental project of saving old pictures from floppy disks to flash drives for safe keeping (I hope). Here are some pictures of Dolly and Lama when they were babies in 1998 -- brother and sister from the same litter: