Paul Volcker is one of my heroes. He was the chairman of the Federal Reserve who stamped inflation out of the U.S. economy in the late 1970s and early 1980s. He was very unpopular at the time for pushing interest rates so high, but he persisted because he thought it was the right thing to do. It turned out he was right—his method worked and we have enjoyed low inflation ever since.
Now he is concerned about the U.S. losing world economic leadership, and potentially even intellectual leadership. As he points out, “You cannot be dependent upon these countries for three to four trillion dollars of your debt and think that they’re going to be passive observers of whatever you do.”
An article on Bloomberg gives an outline of his thoughts, but apparently there are two full interviews that will be shown on PBS and Bloomberg TV. I suspect it will be worth watching.
Globalization has changed everything. Globalization coupled with massive foreign debt will make the investment environment just as subject to radical change as the economic environment. Investors will need to be prepared to adjust tactically as the world changes.
Posted by Mike Moody 
