- The needed re-regulation of the global economic system will eventually happen, but not for another 4-5 years
- The US will end up with another $8-10 Trillion in debt (on top of our existing $11 Trillion), prompting a '1970's-style' bout of near-hyperinflation to reduce it. Not as bad as Germany after WWI, but pretty darn bad. Rogoff points out that he's only saying this because, again, this is a once in 100 years event, and the aftermath is gonna be ugly for a while
- Most large US financial institutions will need to go through 'some sort of accelerated bankruptcy', and the sooner the better. The longer the Obama administration delays this, the worse things will become, and the greater the risk of 'recessions for a decade' as in Japan. We have to 'face the music', and now.
- This mess will prompt a necessary and long-overdue re-evaluation of American values and consumption at the household level (something your faithful correspondent has long been forecasting...)
Do yourself a favor and take the 20 minutes to view the whole thing. Here's the link again: http://www.pbs.org/now/shows/511/index.html
And read his paper (with Carmen Reinhart) on the aftermath of financial crises (previously recommended): http://www.economics.harvard.edu/faculty/rogoff/files/Aftermath.pdf
Next time you hear Cramer, Kudlow, Luskin and all the rest of trained seals on CNBC et al, keep the much-better-informed Rogoff in mind
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