By Karl Smith, Contributor There is really no way to make this interesting to non-geeks but I am elated/tickled that Paul Krugman is peddling Dark Matter like thinking on his blog as common sense. This is almost as good as when he titled a column “Kick That Can” For late comers I am long time proponent of Can Kicking. I mean we even have the infamous hedge fund analogy Because US assets are higher-yielding although riskier than US liabilities, we still earn more from our investments than we pay on our liabilities. In the aggregate, America is a bit like a hedge fund that borrows to make risky investments; that’s arguably not a good thing, but it’s not a story of living beyond our means. Granted there is clearly still some hesitation. I didn’t miss the “arguably not a good thing line.” But still, the Greatest Trade Economist of Our Time is now in our camp. Incenditially, I think Dark Matter is behind much of the UK Productivity Puzzle and is also behind “The Great Takedown.” The later is the not yet realized bombshell that the US in general and the US Federal Government in particular made out like gangbusters in the Great Recession. I am still trying to tie this all together but a full accounting of US Treasury “profits” from the Global Financial Crisis look to number in the trillions. As we will probably come to see – US households didn’t do to shabby either. The baseline is for net household wealth will be on tear over the next few years as the asset side of the ledger pays-in increasing real dividends and the liability side of the ledger pays-out near negative real interest rates. …read more

Source: FULL ARTICLE at Forbes Latest