I hope you're ready.
Congress has wasted the time it was given by the Europeans getting things "temporarily" under control. But they didn't actually get anything under control, as the Italian elections just showed.
Now, with the budget over there at risk of being abandoned, and fiscal restraint being abandoned (note: exactly what the US has been doing) the markets are recognizing exactly the risk that never in fact went away over the last couple of years.
It was hidden by lies, just as it has been hidden by lies here.
Bernanke's machinations and other games "gave" the Congress four years to do the right thing. They didn't, because that same "gift" also destroyed all market signals of urgency.
As such you have people like Krugman and others claiming that it's all ok and that we can spend with wild abandon, taking our fiscal medicine never.
They were wrong. Congress was wrong. The Republicans were wrong, the Democrats were wrong, and the Administration was wrong.
Congress is out of time; as I noted the deficit spending must stop now, irrespective of the fact that it will cause significant economic damage.
We will survive it if we do it now.
If we don't do it now, look at the header up at the top of The Market Ticker for where the markets are going, and then figure out what that does not just to your retirement account but to pensions such as Calpers as well.
Time's up; we either have serious people who will take serious actions right now or we're going to find out what a real "discontinuity" looks like.
I promise that you won't like it.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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