A very important but taciturn investor (that explains why I hadn’t heard of him) speaks to the Wall Street Journal, and his prognosis ain’t pretty:

• He compared the financial markets to a Hostess Twinkie. “There is no nutritional value,” he said. “There is nothing natural in the markets. Everything is being manipulated by the government.”
• “The government is now in the business of giving bad advice … By holding interest rates at zero, the government is basically tricking the population into going long on just about every kind of security except cash, at the price of almost certainly not getting an adequate return for the risks they are running. People can’t stand earning 0% on their money, so the government is forcing everyone in the investing public to speculate….”
• “[I]t was in some ways helpful to carry a Depression mentality throughout their later lives, because it meant they were thrifty with their money and prudent in their investment decisions … All we got out of this crisis was a Really Bad Couple of Weeks mentality.”
• He is buying “way out-of-the-money puts on bonds”—options that have no value unless Treasury bonds plummet. “It’s cheap disaster insurance for five years out,” he said.
• “All the obvious hedges”—commodities and foreign currencies, for example—”are already extremely expensive,” he warned.

I’d tell you how I’m hedging, but since I have an audience of dozens, some with money in the bank, I don’t want to risk driving up the price before I’m more fully invested. 😉

HT: Patrick Deneen at Front Porch Republic.

Meanwhile, Ross Douthat says the demographic crunch every sentient creature knew was coming has arrived way early – now instead of the late 2010s: a “lost decade.” I’m not sure he’s right blaming Bush (he at least is clear that he’s talking hindsight) except that Bush had what tort lawyers call the “last clear chance” to avert catastrophe.