Part of me feels no, we should not let up on the worry, it does seem truly bad. And yet, when I look at market prices, I don’t see such a high level of gloom or angst. Here is my latest Bloomberg column, it makes a number of arguments, but this is to me the disruptive one:
…virtually all market prices, whether equity indices, measures of volatility or the strength of the dollar, suggest that the future will be at least tolerable and possibly quite good or even spectacular. The market doesn’t seem to think that the expected results from the November election are going to overturn these positive trends. Panicking political commentators often put a lot of trust in prediction markets for the election, but I have yet to see them explain why other asset price markets seem to be doing fine.
I read and hear lots of cheap talk, but I don’t see anyone dealing with this perspective. It should be a kind of wake-up call to those who seek to be obsessed with the data. Market prices are very often (admittedly not always) the best data we have.
Maybe you disagree. But if so, are you short the market and long volatility? A few of you must be, but overall I expect not. So let’s fess up to what we really believe, and that we infer from your actions, so writes his inner Bryan Caplan.
By the way, I don’t deny that America is going to hit various “walls” and “discrete events,” and indeed my next book stresses this as our likely future. But I just don’t think the end is here quite yet, and furthermore I expect we will emerge more or less intact from the crises to come. So when the very smart Martin Wolf has a column titled “How the West Might Soon be Lost” (whether he titled it or not), I feel the rhetoric has swung much too far in the pessimistic direction. Let’s look back again at those market prices.
At least some millionaires and billionaires are building and buying “ultimate bunkers” — are you? Those fermented foods are yummy, yum, yum.