If Nassim Nicholas Taleb (and others) posit that an outcome once considered extremely rare is increasingly likely, does that mean a certain type of swan has changed its colors? That is, based on the following Bloomberg BusinessWeek report, "'Black Swan' Author Concerned About Hyperinflation," is black the new white?
Nassim Nicholas Taleb, author of “The Black Swan” about how unforeseen events can roil markets, said he is concerned about hyperinflation as governments around the world take on more debt and print money.
“We are facing an environment with a huge amount of debt,” he said in a speech in New Delhi today. “The next mistake is going to be overprint, which is going to be the way out for them, which is why I fear hyperinflation.”
Taleb joins Mohamed A. El-Erian, co-chief investment officer at Pacific Investment Management Co., in warning governments about rising public debt. Failing to carry out fiscal measures in time would raise the possibility of governments seeking to eliminate excessive debt through inflation or default, El-Erian said yesterday.
“Why is the state converting private debt into public debt?” said Taleb, who advises Universa Investments LP, a $6 billion fund that bets on extreme market moves. It’s “because public debt is permanent.”
Printing is not enough,sitting in the banks coffers = hibernation,
not hyperinflation.
But this is intriguing : “Why is the state converting private debt into public debt?” said Taleb, It’s “because public debt is permanent.”
My religion forbids me to speculate
so like peak oil and climate change, I'll put this one on the
wait and see list.
Posted by: roger | March 12, 2010 at 06:24 PM