Beyond the Keynesian Endpoint

02/17/2012 · No Responses

During the Great Depression, legendary British economist Keynes advocated using government money to fill the economic void until consumer spending and business investment recovered. But what happens when governments can’t do that anymore? You’ve arrived at “The Keynesian Endpoint”: when the money has run out before the economy has been rescued. That’s where we are. Exhausted balance sheets leave policy makers with few viable options to bolster economic growth; increasingly, they point leaders and citizens towards brutal choices that were previously unimaginable. Meanwhile, investors struggle to navigate volatile markets overwhelmed by sovereign debt—and, as they do, they lose tolerance for fiscal recklessness.

In the U.S. and around the world, debt-fueled spending programs devised to cure the global financial crisis are now morphing into poison. In Beyond The Keynesian Endpoint, PIMCO Executive Vice President and market strategist Tony Crescenzi illuminates the mounting sovereign debt crisis, dissects each of the many scenarios now swirling around it, and reveals the profound implications for governments, investors, and the world economy.

From the Back Cover
During the Great Depression, legendary British economist John Maynard Keynes advocated using government money to fill the economic void until consumer spending and business investment recovered. But what happens when governments can’t do that anymore? That’s “The Keynesian Endpoint”: when the money runs out before the economy has been rescued, and investors refuse to accept any more sovereign debt.

That’s where we are. In the United States and worldwide, debt-fueled spending programs devised to cure the global financial crisis have morphed into poison. Exhausted national balance sheets have left policy makers with few viable options to bolster economic growth, pointing leaders and citizens toward brutal choices that were previously unimaginable.

In Beyond the Keynesian Endpoint, PIMCO Executive Vice President, portfolio manager, and market strategist Tony Crescenzi illuminates the frightening new world we now inhabit. Crescenzi dissects each scenario swirling around the mounting global debt crisis and reveals its profound implications for governments, investors, and the global economy.

Surviving the world’s greatest hangover
Welcome to the morning after America’s 30-year consumption binge
The dangerous use of fiscal illusions by politicians
How politicians hoodwinked the public and ballooned our debts
The investment implications of the Keynesian Endpoint
How to keep your portfolio afloat while other investors flounder
From endpoint to new beginning
How the Endpoint is leading to the transformation of a century