The End is Near

A very smart woman I know asked me to review an article titled "Economist Caution:  Prepare for Wealth Destruction."  Most of the time, my smart friends' questions are more interesting than mine.  Let's see what this article says, and whether the purveyors of doom are correct in their assessment.
First of all, I get most of my information from the Wall St. Journal, Barron's and academic papers from the University of Chicago and Wharton.  Each of these sources has been reliable, unbiased (mostly) and seem to attract the best economic minds.  I know that Rupert Murdoch owns the WSJ and Barron's, but I also have followed and been in contact with high level contributors who have said that they have received no pressure to do anything other than outstanding reporting.  I've read these papers long before Murdoch bought them and agree that the reporting has been consistent over time.
It goes without saying that economic publications tend to take a conservative bent, if not politically, then definitely economically.  Newsmax, Inc., the publisher of the article that my friend ask be reviewed, actually characterizes itself as a "conservative publication."  Right off the bat, that takes the article from fact-based, to potentially biased.  Economic reporting should not be "conservative" or "liberal."
It should be accurate.
Next, I look at which economists are warning the rich that they're about to lose half their wealth.  The first is Marc Faber.  I am very familiar with him through CNBC and his participation on various "round table" financial discussions.  His nickname is "Doctor Doom."
As a writer of weekly financial articles, I find myself characterized as a "capitalist pig" about half the time.  The other half, I'm a "bleeding heart liberal."  In reality, I go where the data lead me.  I don't solve for a particular answer.  As long as this country is closely split politically and I make half my readers angry all the time, I feel that I'm doing my job.
Back to Marc Faber.  His nickname is "Doctor Doom" for a reason.  As a "contrarian" investor, or one who goes against the herd, some negative bias is understandable.  The market is up more than it's down.  But, to predictably land in a negative outlook makes his reasoning suspect.
Peter Schiff, another economist that agrees with Faber, is a strategist for a mutual fund.  His economic training is from the "Austrian" school of economic thought.   The financial aspect of Ron Paul's libertarian platform would be closest to describing this point of view.  We'll leave it at that, to ensure you will stay awake.
Robert Wiedmer manages a fund for investors with $200 million or more in assets, and accurately predicted the 2006 economic downturn.  He disagrees with Bernanke's handling of the economic crisis, and has been predicting a further, serious recession in his book "Aftershock."
And, finally, Donald Trump chimes in.  Donald is not an economist.  I'm not sure what Donald is, but I find myself almost never agreeing with anything he says.  Over time, that has worked out well for me.
So, four gloomy guys think the sky is falling.
Let's see if their reasoning holds up.
According to Faber, "somewhere down the line" we'll have massive wealth destruction where "well to do" people will lose 50% of their wealth.  I guess if you think that no one is going to do anything about deficit spending growth, the economy does not recover, the European Union dissolves and rattles the global financial markets and China's growth continues to fall precipitously, that is a reasonable assumption, but he places the odds at 100%.
I am not 100% sure the sun will come up in the east tomorrow.  I don't take people seriously when they present their probabilities as absolute fact.
Peter Schiff, says the crash we just had was not the real crash.  The real crash is coming. He bases his conclusion on the same data as Marc Faber.  We'll take absolutely no action on growing deficit spending, our economy is permanently stalled, and we won't reform Social Security or Medicare.  If you agree with the fact that we will take no action, he's probably right.
Robert Wiedmer, hawking his book "Aftershock," says “The data is clear, 50 percent unemployment, a 90 percent stock market drop, and 100 percent annual inflation… starting in 2013.”
Okay.  First of all, the data "are" clear.  Data is plural, unless he's only looking at one thing.
I look at 26 things.  From capacity utilization to durable goods orders to sentiment to valuation, I study the trends for a wide variety of economic indicators.  Nowhere do I see 50% unemployment, a 90% stock market drop and 100% annual inflation, much less next year.  I think this guy is trying to sell his book.
And the Donald.  Please don't ask me to respond to the Donald.  He's ridiculous.
So there you have it, Maggie.  Things aren't great, but the sky is not falling.
I'm in the camp that says the US will take proper action - once we've done everything else.