General Motors: A Forerunner for What’s to Come for the Broader Economy

How much of what goes on is just blah…blah…blah…just people talking?

Probably 90%. People come to think what they must think when they must think it. Then they blah…blah…blah to convince each other that they’re right.

But what really matters are the deep, long patterns…patterns of history that no one can control and few take the trouble to try to understand.

Bill Gross: “I think it is important to recognize that General Motors is a canary in this country’s economic coal mine; a forerunner for what’s to come for the broader economy. Their mistakes have resembled this nation’s mistakes; their problems will be our future problems. If the US and General Motors have similar flaws and indeed symbiotic fates, they appear to be conjoined primarily by the un-competitiveness of their existing labor cost structures and the onerous burden of their future healthcare and pension liabilities. Perhaps the most significant comparison between GM and the US economy lies in the recognition of enormous unfunded liabilities in healthcare and pensions. Reportedly $1,500 of every GM car sold in the dealer showrooms goes to pay for current and future health benefits of existing and retired workers, a sum totaling nearly $60 billion. The total future healthcare liability for all US citizens can be measured in the tens of trillions.”

Bill Bonner
for Markets and Money

Bill Bonner

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.
Bill Bonner

Latest posts by Bill Bonner (see all)

Leave a Reply

5 Comments on "General Motors: A Forerunner for What’s to Come for the Broader Economy"

Notify of
avatar
Sort by:   newest | oldest | most voted
Dan
Guest

I read somewhere that companies like Fiat are going to buy up the useful left overs from the GM break-up. But I wonder who will buy up the left overs of the USA break up … will it be that simple?

Smack MacDougal
Guest

Bill Gross of PIMPco, the U.S. junk bond dealer, is a consummate insider.

This guy shall say anything to keep cash flowing to PIMPco.

Most of what he says publicly amounts to useless rhetoric.

Michael
Guest

Economic commentators, including some of the big names of the last few decades are calling the recession as largely defunct. There do seem to be ‘green shoots’ emerging, or is this simply selective reporting and framing of the economic data?

Sentiment is certainly growingly optimistic. Have we seen the bottom in equity markets, seems so. This bounce, if it is a bull market bounce, seems very resilient.

Michael
Guest

did I say “bull market” bounce? You know what I mean …

Dan
Guest
Michael, people don’t like having money lying around uninvested – it makes them nervous. The rally might be partly because people are just glad to have gotten back into it after staying out so long. Also, Obama is popular, and China is building roads and stuff (in China). But are the fundamental flaws of the economy anywhere closer to being fixed? Russia is on the verge of going for a metals based currency (Palladium, perhaps), and China is thinking of going Gold based. America’s economy has proven to be based on a pack of lies, and it’s still unwinding. Given… Read more »
wpDiscuz
Letters will be edited for clarity, punctuation, spelling and length. Abusive or off-topic comments will not be posted. We will not post all comments.
If you would prefer to email the editor, you can do so by sending an email to letters@marketsandmoney.com.au