One of my favorite financial stories involves a time I was giving a speech in Hong Kong. I was waiting backstage to go on when a tall, professional-looking lady approached me to introduce herself. She presented her business card. It said she was a managing director of Goldman Sachs and her “boss” would like to meet me. I thought to myself, Gee, if you’re an MD, I wonder who the boss is? So I agreed to the meeting, which took place in an out-of-the way spot after my speech.

The meeting went well. The boss turned out to be the head of global trading for Goldman Sachs. He wanted to pick my brain on China’s appetite for gold. We had a good chat and both agreed that China would be a huge gold buyer in the years ahead.

When we were almost done, I asked him, “Well, now I have a question for you. Your research department recently called for $1,000 gold. We agree that gold’s going higher. So what’s up with that call for lower gold?” He laughed and said, “Oh, that’s just our research department. Nobody pays attention to them.”

Suddenly I got the joke. The Goldman research department is filled with ex-Fed economists using the same obsolete models the Fed uses and that I have criticized for years. That’s why their forecasts are usually off. But this article refers to a forecast that’s directionally correct yet has the wrong order of magnitude.

Goldman says the outlook for U.S. deficits and the national debt is “not good.” They are certainly right about that but have underestimated the problem. Goldman sees an increase in the U.S. deficit from $825 billion this year to $1.25 trillion by 2021. My forecast is for a $1 trillion deficit this year and $2 trillion by 2020.

So read this article closely. It’s full of bad news. But the real news is much worse.

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