A Tale of Two Tsunamis

One of the most misused words in the English language right now is tsunami. You almost never heard of the word until late 2004, when the most powerful tsunami of our lifetimes struck the Indian Ocean off Sumatra, killing 220,000 people in several nations. Ever since then, people have used, overused, and misused the word repeatedly to describe any kind of a great change or event. Everything's a tsunami nowadays. If instead, a half-mile-wide asteroid had struck Sumatra killing 220,000 people, everything now would be an asteroid strike. Especially galling is the use of the term to mean the coastal wave that floods and demolishes coastlines during a hurricane (or typhoon or cyclone). That's a storm surge, not a tsunami.

So here we have two people using the word tsunami to mean something, namely Jim Kunstler and Alan Greenspan. In his Clusterf_ck Nation Chronicles for this week, Mr. Kunstler describes this whole credit crisis as a tsunami. He said that what we are seeing now is the withdrawal phase of a tsunami, namely the deflationary recession that seems to be developing as a result of so many mortgages foreclosing and the resultant credit freeze. He compares it to the hundreds of feet revealed by the withdrawing waves of the ocean, describing the flotsam and shipwrecks that are revealed. Then he says that the tidal wave part is coming, namely runaway inflation, and that will wipe all the financial stuff clean. He says that all the money that the Fed put in will come sloshing back. I am not too sure that such an inflation will result, but it seems plausible to me. In any case, he used the word tsunami properly.

Not so Alan Greenspan. Today he said, "We are in the midst of a once-in-a century credit tsunami". He then says, that whatever regulatory changes are made, "they will pale in comparison to the change already evident in today's markets." But he does not show how the credit crisis is like a tsunami. Nowhere in his words do I hear him speak of a withdrawal phase and a tidal wave, and nowhere do I see any other valid reference to a tsunami, other than it is a big change. He is one of these people that use tsunami to explain anything and would have used "asteroid strike" instead if the great destructive event of late 2004 had been an asteroid strike instead of a tsunami.

So please use tsunami sparingly and properly, and beware of upcoming inflation that could destroy the economy in the next few years.