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Sep-09-2009 23:21printcomments

A Level-Headed Look at What's Next for the U.S. Economy from the Authors Who Saw It Coming

The noise created by the pundits, politicians, and the general public is crowding out the solutions on how to survive this mess we're in. Authors Addison Wiggin and Bill Bonner once again act as the voices of reason and provide clarity in the national economic debate.

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Courtesy: 1.bp.blogspot.com

(HOBOKEN, N.J.) - More failing banks, government bailouts, continued corporate corruption and greed, the Right blaming the Left and vice versa, and yet the fact remains: The U.S. economy is troubled.

The messages polluting the media make it impossible for people to understand the real issues. Addison Wiggin and Bill Bonner are here—just as they were six years ago when they first began warning of the nation's economic fate—to clear the air.

Once viewed as the voices on the outside, the coauthors of The New Empire of Debt: The Rise and Fall of an Epic Financial Bubble, 2nd Edition (Wiley, 2009, ISBN: 978-0-470-48326-8, $27.95) and Financial Reckoning Day Fallout: Surviving Today's Global Depression (Wiley, 2009, ISBN: 978-0-470-48327-5, $27.95), are now being revered by many as the much-needed voices of reason among the shrill and bombastic commentators.

"Much of the economic news and commentary reaching the public is tinged by false outrage," says Wiggin. "Many are frustrated by the level of federal spending they are seeing, and rightfully so, but few understand what's really happening and what we face if we don't change course."

Wiggin and Bonner pointed out the flaws in the economy long before such knowledge became mainstream. Six years ago, they warned that the stock market bubble of the '90s would mutate into a housing, credit, and consumption bubble, engulfing an even greater number of American households. They pointed out the unsustainable nature of the U.S. economy. And many of those who are now furious about what has happened dismissed Wiggin and Bonner as being fanatical.

"When we explained the bubble economy in the first editions of Empire of Debt and Financial Reckoning Day, many people thought we were way off base," says Wiggin. "They couldn't foresee a U.S. economy that wasn't thriving. They couldn't fathom such desperate times for Americans.

"Now that we're seeing high unemployment rates in the U.S., record-setting foreclosures, and bankruptcies and collapses of financial institutions once thought too big to fail, we're no longer the ones being looked at as unreasonable. In fact many of our detractors are the ones who look unreasonable as a result of their feigned outrage at the economic failures they allowed to happen on their watch."

So, what exactly does the future hold for the American economy? Wiggin provides some of his clear-headed expectations:

The Healthcare Bubble: Much of the current media noise is being expressed as part of the debate over healthcare reform. Wiggin addressed issues with healthcare in his critically acclaimed documentary and best-selling book (coauthored with Kate Incontrera) of the same name, I.O.U.S.A.: One Nation. Under Stress. In Debt.

"When we were working on I.O.U.S.A., we knew that healthcare would be the next big thing," says Wiggin. "The system we have now is broken. Government programs like Medicare are way overextended and underfunded. What we need are market mechanisms to bring the prices of drugs, surgeries, and other expensive treatments down. In today's system a huge pot of cash goes to insurance companies and specialized private practitioners, and the patient ends up being more of an object in a transaction than a customer. The fact that healthcare problems are being addressed is a positive thing, but if the solutions that are implemented are just an extension of current policies, we are headed for an even bigger nightmare as far as the national debt goes."


The Government Debt Bubble: The run-up of deficits and debt poses an even greater threat to the prospect of recovery. If consumers can't spend and corporations can't borrow, the conventional wisdom goes, government must spend to make up the difference. But that act "crowds out" productive investment in the real economy, meaning that there is less capital available for the new businesses and technologies that are responsible for economic growth and job creation.

Deflation/Inflation: When Paul Volcker was interviewed for I.O.U.S.A., he said, "Once inflation gets started, it's very hard to stop. And there's a strong flavor of that at the moment."

"The Federal Reserve is struggling to fight off deflation, but inevitably the tides will shift," says Wiggin. "Our general mantra is 'deflation now, inflation later.'"

Unemployment: Right now we're looking at 1930's levels of unemployment. Wiggin estimates that the unemployment rate will hit 12-15 percent before the recession ends.

As a result, you can expect the savings rate to spike even higher and retail spending to decline.

"There seems to be a definite move toward trying to paper over the problems that got us here in the first place," says Wiggin. "Everyone is saying, 'Well, we've just got to get the economy back on track.' The problem with that is that the economy we had was unsustainable to begin with.

"If we don't address the real issue facing the economy—spending beyond our means—then we are headed for more difficult times ahead," he concludes.

"Right now there is an opportunity for the nation to rediscover the values that made it prosperous in the first place. It's time for a reasonable discussion of these problems. It's time to find workable solutions."

About the Authors:

Addison Wiggin (Baltimore, MD) is the executive publisher of Agora Financial, LLC (www.agorafinancial.com). He is the executive producer and a writer of the feature-length documentary film I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and shortlisted for a 2009 Academy Award. Mr. Wiggin is the coauthor, along with Mr. Bonner, of the international bestsellers Financial Reckoning Day and Empire of Debt, and is also the author of Demise of the Dollar...And Why It's Even Better for Your Investments. Mr. Wiggin's work has brought critical acclaim from The New York Times Magazine, CNN/Money, The Economist, Worth, The New York Times, The Washington Post, and others. He has presented his ideas at the National Press Club in Washington, D.C., and at both the Democratic and Republican national party conventions during the 2008 campaign. His work has been translated into French, German, Spanish, Chinese, Japanese, Korean, and Russian.

Bill Bonner (Baltimore, MD) is founder, president, and CEO of Agora Publishing, one of the world's largest financial newsletter companies (www.agora-inc.com). Bonner's career dates back to 1979 when he published Hulbert's Financial Digest. Headquartered in Baltimore, Agora now has offices overseas in London, Paris, Ireland, Bonn, and Johannesburg. Bonner is the creator of and decade-long daily contributor to "The Daily Reckoning" (www.dailyreckoning.com), a financial newsletter that has more than 500,000 readers in the United States, Great Britain, and Australia, and is translated daily into French and German. Mr. Bonner is also the coauthor, with Mr. Wiggin, of the international bestsellers Financial Reckoning Day and Empire of Debt, and is also the author of his third New York Times bestselling book, Mobs, Messiahs and Markets.

About the Books:

The New Empire of Debt: The Rise and Fall of an Epic Financial Bubble, 2nd Edition (Wiley, 2009, ISBN: 978-0-470-48326-8, $27.95) is available at bookstores nationwide, major online booksellers, or direct from the publisher by calling 800-225-5945. In Canada, call 800-567-4797.

Financial Reckoning Day Fallout: Surviving Today's Global Depression (Wiley, 2009, ISBN: 978-0-470-48327-5, $27.95) is available at bookstores nationwide, major online booksellers, or direct from the publisher by calling 800-225-5945. In Canada, call 800-567-4797.




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Anonymous September 10, 2009 12:37 pm (Pacific time)

Great articles today! It is the federal reserve bank that caused this crisis. Bring down the middle class, open the door for a world bank, which will be the IMF, who is owned by the same people who run the federal reserve bank. The U.S. is not enough for them, they want the world. Ron Paul has a book out, Revolution, the Manifesto (only about 10 bucks or so), and a new book coming out, End the Fed. Great reading. The dollar is at 76.7. That is not good at all. Countries all over the world see how corrupt the federal reserve bank is, and will not be lending us any more money. China is going into gold, and helping its citizens get into gold. The dollar is toast. Too much printing fiat dollars. The federal government is spending tens of billions of dollars preparing for civil dissent. Army-mil.com is hiring "internment camp specialists" etc. They know exactly what they are doing, and what it is going to lead to.


Daniel Johnson September 10, 2009 12:19 am (Pacific time)

Wiggin says: ""Right now there is an opportunity for the nation to rediscover the values that made it prosperous in the first place." What there is to rediscover is, according to Ferdinand Lundberg in "The Rich and the Super-Rich" is a fantasy. On the luck of America: “Whereas European royalty and nobility played profound integral roles in European history, the latter-day American rich were more like hitchhikers who opportunistically climbed aboard a good thing. They produced neither the technology, the climate, the land, the people nor the political system. Nor did they, like many European groups (as in England) take over the terrain as invading conquerors. Rather did they infiltrate the situation from below, insinuate themselves into opportunely presented economic gaps, subvert various rules and procedures, and, as it were ride a rocket to the moon and beyond, meanwhile through their propagandists presenting themselves, no less, as the creators of machine industrialization which was in fact copied from England and transplanted into a lush terrain.” American's can't do the equivalent, again. They will find themselves, veyr shortly, down on all fours just like most of the other nations in the world.


Steve Laubhan September 9, 2009 11:31 pm (Pacific time)

This is one of the best op-eds I have ever read. I am now a regular 'customer' you guys. Accept the compliment-it is well-deserved.

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