Buckle Your Seatbelts, Friends–Thinking Man Thinks We’re in For a Bumpy Ride

Thinking Man is my E.F. Hutton. I’m not one to follow anyone but myself, but when he talks I do listen.

Thinking man is a close friend who has basically never been wrong in any of his macro-level predictions (he does not make many strong predictions, usually saying something to the effect that, “It’s complicated, so many factors could come into play between now and then, etc. that it would be foolish to rush to any conclusion” when discussing elections, fluctuations in the polls, economic fluctuations, etc.)

But this evening, he made some strong predictions about our economy, so listen up, friends. He says we are in for “a long and bumpy ride.”

Thinking Man is a day trader with a background in politics, so I figure he has a deeper understanding of geopolitics, the global economy, and the interrelationship between the two, than most. Also he is very financially successful.

The thrust of his message to me was, given the global shortage of oil and our own–and the world’s–ill-preparedness to confront the crisis in the short term, we can expect hard times economically. Quite hard. Especially in light of the economic ascension of China and India, which will produce outsize need for energy that will overwhelm supply. We will face hard times for the next few years, or even decades, until we decide to rescue ourselves and the world with American ingenuity and a new, long-overdue Manhattan project to develop alternative sources of energy. Here is what he said:

“If anyone you know who is in the market will need funds in the short term, tell them to get some money out of the market now and buy short term bonds. Believe me they won’t miss the upside. There won’t be any upside for the next several years.”

“But aren’t you supposed to buy low and sell high?” I asked, trying not to sound too much like a high school ditz flirting with the valedictorian. “And aren’t stocks low?”

“Believe me,” he said, “They’re going lower, and it’s not coming back any time soon, especially if we have President Obama. And anything could happen, but unless another Reverend Wright surfaces–which could happen–we probably will.”

The only sort of party Thinking Man goes for is the kind that features strippers and champagne. In other words, his advice and opinions are as untinged by partisanship or political bias as any I’ve heard. While he is an avid student of politics who has served on the campaign staff of several politicians (mostly Democrats, though in recent years he has grown increasingly open to voting Republican), he is out of the business and these days enjoys the political circus via CNN and FOX News on his wide screen TV. Tonight he said, “I just don’t see any way out of this any time soon. The crazy Democrats won’t drill [for oil in the U.S.] and the crazy Republicans have not gotten serious about researching alternatives. China and India are developing like crazy. Most of these people [in India and China] don’t have cars now, maybe one in forty has a car. They ride bikes for heaven’s sake! What’s going to happen when these people all start driving cars?

“We’re shaky now, and facing this intractable problem in the short term. But that’s not even considering what could happen if there’s a global upset and something happens like a war with Iran.”

I don’t know what to make of this for sure, but I know he tends to be right about things. Some of his other macro-level predictions were that George Bush would win the 2004 election despite the noisy, in-everyone’s-face proliferation of strident support for John Kerry at the time (“People tend to lean a little more conservative in the privacy of the voting booth, especially in wartime like this, you’ll see,” he told me), and that the surge, slowly but surely, would improve the situation in Iraq (“By the time the next election comes around Iraq probably won’t even be the big issue, it’ll be the economy,” he said last year).

Of course, I’d be remiss not to mention Thinking Man thinks it will all come out all right in the end. The U.S. will keep growing, we’ll find solutions to our problems in time. So if you can afford to, hold on tight.

This entry was written by and posted on June 24, 2008 at 2:33 am and filed under Blog.