I once respected Ken Fisher. I thought he had some interesting things to say about arbitrage pricing when he spoke at the San Francisco Money Show in 2002. I lost all respect for him when he spoke there again in 2006 after he claimed that American's home equity was a good substitute for savings in the bank.
Ken Fisher has now given me a reason to never consider respecting his opinion again with his call for massive increases in Americans' debt:
The U.S. has too little debt, not too much, Fisher says. The U.S.'s return on assets is high and interest rates are low, so our borrowing capacity is much higher than our current debt levels.
Also, Fisher says, you have to look at the U.S. in the context of the world, because the U.S. is only 25% of world GDP. The world is way under-leveraged, so one country's particular debt-to-GDP ratio doesn't matter.
Some financial icons manage to outlive their reputations for brilliance. Warren Buffett and Alan Greenspan come to mind. Now it's Ken Fisher's turn to be ignored. Apparently he hasn't watched I.O.U.S.A. or visited Perot Charts. Maybe he's still stuck in the 1980s when his acumen as a portfolio manager and analyst was at its peak.
Folks, please don't listen to Ken Fisher if you want to survive the next few years of malaise. Just stay out of debt for the foreseeable future. That's my own plan.