A note from an old friend in high school. Interesting perspective. Disintermediation is a disaster.
I’ve been in the RV business for 29 years now, and I own Travel Country RV center along with my business partner.... We have 3 stores located in Lake City Florida, Valdosta Georgia, and Augusta. And I can tell you that this is the toughest market I have ever seen, and I see no signs of improvement. We’ve lost our floorplan financing which was a credit line of $15 million and don’t know if we can replace it. The only two major players left are Bank of America, and GE and you know what’s been going on with them. So here we are, that small business that everybody talks about, and we’re on the verge of going down the drain just like so many others, and the government is doing nothing to help us. All the bailout money and stimulus, and we can’t get banks to lend to dealers for inventory, and we can’t get banks to loan to customers without making the conditions so unbelievably unreasonable that we lose 50% of the deals we write now. We’re hanging in there, and liquidating our inventory and hoping that something happens that will loosen this market up but it’s not looking promising, as your article so clearly points out.
He's referring to the Limbaugh Letter interview. It's not available without a subscription, but here is an excerpt:
What a pleasure to speak with the very insightful economist Dr. Mike Munger — chair of the political science department at Duke University, North Carolina’s 2008 libertarian candidate for governor, and all-around brilliant guy:
RUSH: Dr. Munger. I’m really looking forward to this — thank you for making time here.
MUNGER: I’m glad to speak to the leader of the entire conservative movement.
RUSH: (Laughs) First, I want to go back to something you said a while ago, and then ask you to update it. You had an interesting analogy from Milton Friedman to describe Obama’s economic policies: you said it’s like steering a huge ship with an old rubber band for a steering cable; the cable stretches, it gets hung up, and you turn it and turn it, nothing happens; finally it does turn, you go too far, and then you turn it back and you can’t stop it. Can you relate what you meant to Obama’s stimulus and budget, and whether things have changed since that analogy?
MUNGER: Milton Friedman, the Nobel Prize-winner in economics, said that there were two problems with monetary policy. One, people might not want to do the right thing. But even if people want to do the right thing — the Federal Reserve, the fiscal
policies of the federal government — the economy is like a giant ship; it takes a long time to turn it. But even worse, in our attempts to coordinate economic policy, the steering cable is like an old, stretchy rubber band. So if we turn one way, the ship does nothing for a long time, maybe months; and we pour in more and more
resources, and it looks as if nothing’s happening, and so we start to try to do too much. Eventually, the great ship of the economy starts to respond. But as it starts to turn we say, “Okay, okay, that’s enough,” and we start to turn back the other way, but nothing happens.
Now, in the time since I originally talked about that analogy Milton Friedman made famous long ago, the high-powered money supply of the United States has been growing at a rate that we haven’t seen I think ever. It’s grown at a rate of ten percent per
month over the last six months.
RUSH: Which means we’re printing money, right?
MUNGER: In effect, we’re printing money. We’re raising the pressures for inflation, to the point where there’s no way we can stop it. Once the ship does start to turn, we’re going to have inflationary pressures the likes of which we have not seen since the ’78, ’79 huge increase, which was then due to the Arab oil embargo. This time, we’re doing this to ourselves. I would say two or three years from now the inflation rate is going to be at least 12 or 15 percent, and it may be higher. We can’t turn that fast, and we’re trying to turn too much too quickly. We don’t know what we’re doing; we’re as likely to make things bad as good. But the one thing that we do know for sure is that there’s going to be a period of inflation.