"Huge outflows have struck from US-based bond funds, while the outflows continue for stock funds since may 2010."
One must be careful here of projecting their own pet theory into these outflows. There are a couple of very simple mechanical reasons for them.
1. A large portion of stock and bond funds are held by institutions in the form of retirement mutual funds and by insurance companies for things like annuities. Starting in January of 2010, about 10,000 Americans per day, on average, will begin to retire for about the next couple of decades. So beginning in January, these retirement accounts stop accruing assets and begin drawing own assets. They go from net accumulation to net liquidation.
Also, 2, the high unemployment and layoffs over the past couple of years has resulted in people retiring long before they had originally planned on doing so. These accounts are coming out of stocks and bonds and going into more stable cash. Annuities are starting to pay out meaning the investments underlying them are going to be sold off to meet the payout. Overall there will be a huge liquidation of stock and bond funds over the next 20 years as the boomers "eat down" their retirement accounts. As they die, the accounts will be liquidated wholesale and proceeds turned over to beneficiaries (minus "death tax").
So expect shrinkage of stock and bond funds to be the norm for the next couple of decades as the boomers liquidate assets at a greater rate than newcomers to the workforce accumulate assets.
You can see the author's prejudice in the statement "A public boycott seems firmly in place. ". No. It is a public that is liquidating its retirement accounts to live on, retired or not.
"The public has grown jaded by stories of flash trading smears of the stock market, insider trading scandals, and incessant internal reports of stock support from the Working Group for Financial Markets."
Maybe, but 300,000 people a month leaving the workforce and living on those accounts, moving the investments to cash to preserve capital, is a pretty powerful force. That's 3.6 million accounts per year that go from net accumulation to net liquidation and once retired, only the economically retarded is going to keep their money in a bond or stock fund. They might purchase actual bonds that they intend to hold until maturity (that preserves the capital) in order to create an income stream but they aren't going to put their retirement money in a fund that will lose money when interest rates rise.
I pretty much discount the rest of the article, he doesn't come across as a person who knows what he is talking about to me. He does get the general result correct, but doesn't appear to understand the real reason for it and attributes his own pet reasons and projects those reasons onto the general investor community.
The Long Cold Winter
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Oh, I don't think I am being dismissive of the problem of the outflows, that is going to cause huge turmoil in the markets. I am, however, being dismissive of that person's *reasons* for those outflows.
I do dismiss his analysis but not his observation.
I do dismiss his analysis but not his observation.
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geekster
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RE: Gold and silver. Yes, according to his graph, it is approaching a support level so that there would be a break in one direction or the other is no surprise. Which direction it breaks will be dependent on the US Dollar. Lately the dollar has been strengthening a bit. But we will see how things look after the next major treasury auction.
If the fed pumps a massive amount of dollars into the system by purchasing a large amount of US treasury debt, the dollar will fall. If the fed doesn't have to, the dollar will be stable. We just have to wait and see.
If the fed pumps a massive amount of dollars into the system by purchasing a large amount of US treasury debt, the dollar will fall. If the fed doesn't have to, the dollar will be stable. We just have to wait and see.
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geekster
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This will give a more accurate picture, in my opinion:
http://www.economics21.org/blog/fed-sho ... nd-economy
and this:
http://www.businessinsider.com/bullard- ... on-2010-12
and this:
http://www.zerohedge.com/article/guest- ... ation-risk
and this
http://blogs.wsj.com/economics/2011/01/ ... he-greeks/
http://www.economics21.org/blog/fed-sho ... nd-economy
and this:
http://www.businessinsider.com/bullard- ... on-2010-12
and this:
http://www.zerohedge.com/article/guest- ... ation-risk
and this
http://blogs.wsj.com/economics/2011/01/ ... he-greeks/
Pabst Blue Ribbon - The beer that made Gerlach famous.
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Geekster, this is no reflection on you but, the 4 links are almost entirely pablum. It's pure MSM BULLSHIT . Here's a couple quotes that I like;
"Even if the Fed stops buying bonds at its January 26 meeting, as it should"
NOBODY with a pulse has any illusions of what will happen should the FED stop buying almost the entire issuance of treasury notes. Default on bond-service will take place within 1 day
"has the power and, under its reading of its full employment mandate" Sure, the FED has the power. It hasn't got a FUCKING CLUE of what to do about unemployment.
"leveraging itself to over $3 trillion in assets" "Despite having little in the way of equity capital"
I like this shit. It has $3 trillion in assets but, NO EQUITY. That's like saying "I've got a 1,000 water bottles but, no water."
The "FED laugh track" should scare the shit out of everyone. They're so helpless and clueless that all they can do is to make "gallows humor'
The paper from Bullard is perfect shit for MSM. Energy and food have gone up 15% in 90 days but, that has nothing to do with run-away money printing.
I try not to post stuff where shitheads are talking out both sides of their mouths. Nobody who reads outside MSM believes that the FED will stop printing to buy bonds. Nobody believes that TARP was paid back. You have to keep in mind that every bond that rolls over and is replaced by a FED-bought bond is a shift by an investor OUT of the bond market
"Even if the Fed stops buying bonds at its January 26 meeting, as it should"
NOBODY with a pulse has any illusions of what will happen should the FED stop buying almost the entire issuance of treasury notes. Default on bond-service will take place within 1 day
"has the power and, under its reading of its full employment mandate" Sure, the FED has the power. It hasn't got a FUCKING CLUE of what to do about unemployment.
"leveraging itself to over $3 trillion in assets" "Despite having little in the way of equity capital"
I like this shit. It has $3 trillion in assets but, NO EQUITY. That's like saying "I've got a 1,000 water bottles but, no water."
The "FED laugh track" should scare the shit out of everyone. They're so helpless and clueless that all they can do is to make "gallows humor'
The paper from Bullard is perfect shit for MSM. Energy and food have gone up 15% in 90 days but, that has nothing to do with run-away money printing.
I try not to post stuff where shitheads are talking out both sides of their mouths. Nobody who reads outside MSM believes that the FED will stop printing to buy bonds. Nobody believes that TARP was paid back. You have to keep in mind that every bond that rolls over and is replaced by a FED-bought bond is a shift by an investor OUT of the bond market
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
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geekster
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I like to get a fairly broad perspective if I can. Now because I linked to an article doesn't mean I agree with everything in it. Often there is a nugget in there, though, nestled in all that crap.
Sometimes it is just a matter of showing someone's general mindset. Like it or not, many of these people are the one's making the policy. But really important was the one talking about how the fed seems to want it both ways at the same time making what appears to be self-contradictory statements.
That is an indication of an organization that is still flailing. They don't really know yet what they are going to do so they are leaving the door open to any eventuality. No matter what happens they can say they anticipated it. Sort of like forecasting relentless drought in Australia due to global warming, lobbying (successfully) to stop dam construction and instead use the funds for desalinization plants which are completed just in time for another 20 to 30 year wet cycle and currently sit mothballed in a Queensland awash in water ... only to now say that "oh, yeah, expect lots of floods now from global warming".
No matter what happens, hot, cold, dry, wet, heck, if potatoes fell from the sky it would be due to "climate change".
The *only* thing keeping this economy out of the toilet right now is the fact that the Euro is tanking faster than the dollar and the fact that the Federal Reserve is keeping interest rates artificially low. That won't last much longer. It just can't. The Fed is going to need to print so much money to make up for the Social Security shortfall soon that the dollar will soon overtake the Euro in the race to the sewer.
It can be stopped but in order to do that, the government has to stop spending. It is going to have to cut wholesale a lot of entitlement programs. The checks are going to have to stop and people are actually going to have to go back to work. The Democrats don't want that to happen. If those checks stop, then Americans are going to start taking those jobs that immigrants are doing. They aren't taking them now because they are just sitting at home collecting checks. But once those checks stop, they are going to want those jobs and the people currently holding those jobs are a dear political affinity group for that political party. Basically, the Democrats are buying jobs for the illegal immigrants by paying the rest of us to take a seat. That won't last much longer either.
Sometimes it is just a matter of showing someone's general mindset. Like it or not, many of these people are the one's making the policy. But really important was the one talking about how the fed seems to want it both ways at the same time making what appears to be self-contradictory statements.
That is an indication of an organization that is still flailing. They don't really know yet what they are going to do so they are leaving the door open to any eventuality. No matter what happens they can say they anticipated it. Sort of like forecasting relentless drought in Australia due to global warming, lobbying (successfully) to stop dam construction and instead use the funds for desalinization plants which are completed just in time for another 20 to 30 year wet cycle and currently sit mothballed in a Queensland awash in water ... only to now say that "oh, yeah, expect lots of floods now from global warming".
No matter what happens, hot, cold, dry, wet, heck, if potatoes fell from the sky it would be due to "climate change".
The *only* thing keeping this economy out of the toilet right now is the fact that the Euro is tanking faster than the dollar and the fact that the Federal Reserve is keeping interest rates artificially low. That won't last much longer. It just can't. The Fed is going to need to print so much money to make up for the Social Security shortfall soon that the dollar will soon overtake the Euro in the race to the sewer.
It can be stopped but in order to do that, the government has to stop spending. It is going to have to cut wholesale a lot of entitlement programs. The checks are going to have to stop and people are actually going to have to go back to work. The Democrats don't want that to happen. If those checks stop, then Americans are going to start taking those jobs that immigrants are doing. They aren't taking them now because they are just sitting at home collecting checks. But once those checks stop, they are going to want those jobs and the people currently holding those jobs are a dear political affinity group for that political party. Basically, the Democrats are buying jobs for the illegal immigrants by paying the rest of us to take a seat. That won't last much longer either.
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Geekster, here's an example of what you're saying. The FED is catching a LOY of shit for their actions. In this doc, they point the [middle] finger at congress.
http://www.johnmauldin.com/images/uploa ... 011511.pdf
They say that congress is responsible for all the spending problems. Their selective amnesia seems to have erased all the FED spending that did not originate in congress.
Something to keep in mind; The "finger pointing" usually starts after the crash. Congress is starting to become aware that it will take continual printing to keep bonds from collapsing. The collapse of the Euro will tend to help the dollar BUT, that will only give us a credit card to exponentially increase our debt-service costs.
This is a very interesting article. It claims that we have severe deflation. It claims that all the inflation is just from speculators driving up prices.
http://theautomaticearth.blogspot.com/2 ... -real.html
There is something to be said for that. Petroleum consumption is falling in the West. The price is going up. This is what happened in the bubble a couple? of years ago. The more the price goes up,,, the less the consumption.
As speculators find fewer and fewer places to park their money, many will park their money in the banks. The banks will do as they've always done and "sweep" these accounts. That will buy some time for the banks.
Same thing happened in Japan. GOV holds most people's savings in the Postal Bank. They spent all that money that wasn't theirs. The Japanese are going to be crying the loudest.
We are starting to see Malthusian shortages as the emerging countries try to raise their standard of living. This will tend to kill off those who aren't busily producing. This doc has a good overview. http://www.gata.org/files/HindeCapital- ... 7-2011.pdf
The hunter-gatherers will still be able to eat,,, as long as flood and drought doesn't kill them. The producers will still be able to eat. The non-producers will get shoved farther and farther out.
http://www.johnmauldin.com/images/uploa ... 011511.pdf
They say that congress is responsible for all the spending problems. Their selective amnesia seems to have erased all the FED spending that did not originate in congress.
Something to keep in mind; The "finger pointing" usually starts after the crash. Congress is starting to become aware that it will take continual printing to keep bonds from collapsing. The collapse of the Euro will tend to help the dollar BUT, that will only give us a credit card to exponentially increase our debt-service costs.
This is a very interesting article. It claims that we have severe deflation. It claims that all the inflation is just from speculators driving up prices.
http://theautomaticearth.blogspot.com/2 ... -real.html
There is something to be said for that. Petroleum consumption is falling in the West. The price is going up. This is what happened in the bubble a couple? of years ago. The more the price goes up,,, the less the consumption.
As speculators find fewer and fewer places to park their money, many will park their money in the banks. The banks will do as they've always done and "sweep" these accounts. That will buy some time for the banks.
Same thing happened in Japan. GOV holds most people's savings in the Postal Bank. They spent all that money that wasn't theirs. The Japanese are going to be crying the loudest.
We are starting to see Malthusian shortages as the emerging countries try to raise their standard of living. This will tend to kill off those who aren't busily producing. This doc has a good overview. http://www.gata.org/files/HindeCapital- ... 7-2011.pdf
The hunter-gatherers will still be able to eat,,, as long as flood and drought doesn't kill them. The producers will still be able to eat. The non-producers will get shoved farther and farther out.
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
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Devvy Kid has an encyclopedic knowledge in several areas. This is an article talking about what to expect in the future.
http://www.devvy.com/new_site/true_economy_011711.html She makes a lot of comparisons to conditions before and during the Great Depression I. She also gives a few links to articles from 2004 and 2005. If she's been correct all along, i don't see any particular reason to doubt her predictions.
She and many other writers make the point that FDR made Great Depression I much worse by trying to stop the correction. Hopefully, there won't also be a repeat of Smoot-Hayley. Her opinion is that, then and now, GOV is trying to establish a collectivism that she refers to as communism. Martin Armstrong refers to our system as the "welfare-warfare" state. Ayn Rand had her own, well-know views.
I suppose that it is tolerable when GOV plays "robin hood",,, takes from the rich and gives to the poor. The rich seem to have grabbed the reins of power and reversed the situation. Some of the rich became rich by great entrepreneurial efforts. They aren't the problem. They create wealth by their efforts.
Those who got rich by stealing due to their complete lack of other abilities, should also be compensated commensurate with their abilities.
If the rich and dishonest don't deserve huge compensation, what do the poor and honest deserve? What do the poor and dishonest deserve? Should everyone be compensated commensurate with their efforts? What about those who don't have necessary skills and / or intelligence? How should they be compensated / supported?
Free-market capitalism tried to compensate commensurate with ability and motivation. The dishonest and powerful took that away. A true collectivist state would kill motivation. How do you maintain motivation and only give minimal support to those who can't or won't put their labor into the economy? It can't very well be done with universal suffrage. That's why all socialist systems fail.
Power corrupts. That seems to include the power to vote. If we create nascent corruption at all levels, what is the answer to obtain an honest system?
How do we build a system that maintains the exact right of balance so that it doesn't morph into fascism -on one hand OR socialism - on the other hand?
Beats the shit outa me
http://www.devvy.com/new_site/true_economy_011711.html She makes a lot of comparisons to conditions before and during the Great Depression I. She also gives a few links to articles from 2004 and 2005. If she's been correct all along, i don't see any particular reason to doubt her predictions.
She and many other writers make the point that FDR made Great Depression I much worse by trying to stop the correction. Hopefully, there won't also be a repeat of Smoot-Hayley. Her opinion is that, then and now, GOV is trying to establish a collectivism that she refers to as communism. Martin Armstrong refers to our system as the "welfare-warfare" state. Ayn Rand had her own, well-know views.
I suppose that it is tolerable when GOV plays "robin hood",,, takes from the rich and gives to the poor. The rich seem to have grabbed the reins of power and reversed the situation. Some of the rich became rich by great entrepreneurial efforts. They aren't the problem. They create wealth by their efforts.
Those who got rich by stealing due to their complete lack of other abilities, should also be compensated commensurate with their abilities.
If the rich and dishonest don't deserve huge compensation, what do the poor and honest deserve? What do the poor and dishonest deserve? Should everyone be compensated commensurate with their efforts? What about those who don't have necessary skills and / or intelligence? How should they be compensated / supported?
Free-market capitalism tried to compensate commensurate with ability and motivation. The dishonest and powerful took that away. A true collectivist state would kill motivation. How do you maintain motivation and only give minimal support to those who can't or won't put their labor into the economy? It can't very well be done with universal suffrage. That's why all socialist systems fail.
Power corrupts. That seems to include the power to vote. If we create nascent corruption at all levels, what is the answer to obtain an honest system?
How do we build a system that maintains the exact right of balance so that it doesn't morph into fascism -on one hand OR socialism - on the other hand?
Beats the shit outa me
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
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It looks like the theme for 2011 is budget cuts. Reportedly, it will get much worse in 2012. Here is a page that lists some of the problems. Unfortunately, it looks like crime will get much worse.
"#14 Oakland, California Police Chief Anthony Batts has announced that due to severe budget cuts there are a number of crimes that his department will simply not be able to respond to any longer. The crimes that the Oakland police will no longer be responding to include grand theft, burglary, car wrecks, identity theft and vandalism."
OK, so you have burglar coming in. You don't have to waste a bunch of time calling 911.
http://theeconomiccollapseblog.com/arch ... ry-painful
That is going to be the norm for the near future. You'll get way more tax and way less service. All that money is needed to service the debt.
http://beforeitsnews.com/story/356/645/ ... video.html
Speaking of money, we somehow seem to have slipped into a "silly season".
"Bottom line: The Fed, who capitalizes the treasury by buying treasury bills, now needs to be 'recapitalized' by the treasury, who will now write cheques to the Fed, so it can continue to write cheques to the Treasury."
http://www.financialsense.com/contribut ... pproaching
Moodys said that they will lower the U.S. credit rating in 2012. i suspect that the change will come sooner than that.
http://www.americanthinker.com/2011/01/ ... on_ii.html
Niall Fergusun has plenty to say about this whole mess;
http://www.zerohedge.com/article/niall- ... t-pax-amer
HOLD ON TIGHT
"#14 Oakland, California Police Chief Anthony Batts has announced that due to severe budget cuts there are a number of crimes that his department will simply not be able to respond to any longer. The crimes that the Oakland police will no longer be responding to include grand theft, burglary, car wrecks, identity theft and vandalism."
OK, so you have burglar coming in. You don't have to waste a bunch of time calling 911.
http://theeconomiccollapseblog.com/arch ... ry-painful
That is going to be the norm for the near future. You'll get way more tax and way less service. All that money is needed to service the debt.
http://beforeitsnews.com/story/356/645/ ... video.html
Speaking of money, we somehow seem to have slipped into a "silly season".
"Bottom line: The Fed, who capitalizes the treasury by buying treasury bills, now needs to be 'recapitalized' by the treasury, who will now write cheques to the Fed, so it can continue to write cheques to the Treasury."
http://www.financialsense.com/contribut ... pproaching
Moodys said that they will lower the U.S. credit rating in 2012. i suspect that the change will come sooner than that.
http://www.americanthinker.com/2011/01/ ... on_ii.html
Niall Fergusun has plenty to say about this whole mess;
http://www.zerohedge.com/article/niall- ... t-pax-amer
HOLD ON TIGHT
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
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This is a report from GEAB. They have a lot of info that seems to prove that the world is less prepared to deal with a crisis than it was 4 years ago.
http://www.globalresearch.ca/index.php? ... &aid=22862
"Therefore, we have to wait for a time between Spring and Autumn 2011 for the explosion of the quadruple bubble of Treasury bonds, public debt (10), bank balance sheets (11) and real estate (American, Chinese, British, Spanish,... and commercial (12)), all taking place against a backdrop of a heightened currency war (13). "
They didn't mention any problems with the "Burn" so, we should be OK.
http://www.globalresearch.ca/index.php? ... &aid=22862
"Therefore, we have to wait for a time between Spring and Autumn 2011 for the explosion of the quadruple bubble of Treasury bonds, public debt (10), bank balance sheets (11) and real estate (American, Chinese, British, Spanish,... and commercial (12)), all taking place against a backdrop of a heightened currency war (13). "
They didn't mention any problems with the "Burn" so, we should be OK.
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
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geekster
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[youtube][/youtube]
Gets really good at around 10 minutes.
"The more the plans fail, the more the planners plan".
He says something I had thought of a long time ago. It would be cheaper for the government to simply give money directly to the needy than to have a program that manages it.
Gets really good at around 10 minutes.
"The more the plans fail, the more the planners plan".
He says something I had thought of a long time ago. It would be cheaper for the government to simply give money directly to the needy than to have a program that manages it.
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geekster
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uh, oh
http://www.nytimes.com/2011/01/21/busin ... &src=busln
http://www.nytimes.com/2011/01/21/busin ... &src=busln
The best idea I have heard so far is if a state goes broke, it reverts to "territory" status. It loses its Congressional delegation until it straightens itself out and returns to solvency.Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.
Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign.
But proponents say some states are so burdened that the only feasible way out may be bankruptcy, giving Illinois, for example, the opportunity to do what General Motors did with the federal government’s aid.
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There is NO way of escape. "get out from under crushing debt,,,, including pensions" True, the pensions were far too generous. Any bankruptcy would be used as an excuse to shaft the bondholders. Millions of honest investors get bent over so Ca can be a welfare state. Millions of retirees with pensions and / or investments get a serious haircut. That should make the state a real happy place. What kind of haircut can investors expect???????
http://globaleconomicanalysis.blogspot. ... ffers.html
Here's a paper from Bill Bonner on default.
Still, in the spirit of civic betterment, today exceptionally, we offer a bit of advice to financial authorities all over the world. In a word:
Default!
When you have more debt than you can pay, it is always best to own up...default...hang your head...say you're sorry...promise not to do it again...
..and go about your business. And do it as soon as possible.
Whence cometh this august advice? From the pages of history - recent...and not so recent.
In the second half of the 19th century, the Arab states borrowed heavily from Europeans. The Ottoman Empire was an anachronism. The modern state had already been developed by Napoleon and Bismarck. Meanwhile, in America, the War Between the States sealed the fate of the founding fathers' republic. The limited government of Jefferson became the runaway military government of Lincoln...and later the all- powerful social welfare state of Franklin Roosevelt.
Back in the Old World, in the 19th century, modern technology gave Europeans a huge advantage over their neighbors. The Ottomans - who governed from the Balkans to Morocco - were being left behind. Their economies were less productive, so they lacked the tax base needed to sustain modern armies. So, they brought in European entrepreneurs and European capital to build railroads, canals and other improvements.
Then, as now, declining economies were supported by more dynamic ones.
"China's lending hits new heights," says a headline at The Financial Times today.
China has the most dynamic economy in the world...with $2.8 trillion in reserves, most of it in dollars. It is lending money all over the world. It is America's biggest creditor. And now it is helping wobbly European nations go deeper into debt too.
Foreign money comes at a cost. When the Ottomans couldn't pay, they tried austerity...and then borrowed more. The natives grew restless under the austerity measures. The debt grew larger too...as more and more money was needed to support previous borrowing.
Soon, there was no way out. Backed by better armies, the Europeans foreclosed. France's general Bugeaud laid waste to Algeria's fertile plains. Later, France found a pretext to invade Tunisia. Italy took Libya. Britain invaded Egypt. Soon, Europeans were in control of all of North Africa...and much of the Levant.
Lesson # 1 - don't borrow from foreigners.
Lesson #2 - if you get into trouble, don't borrow more from the foreigners. Default.
And we return to our theme...
Next, it was the Europeans' turn to be the borrowers. They got into a nasty, pointless war in 1914. The French borrowed from the English. The English borrowed from the Americans. The Germans couldn't borrow, so they printed money.
Then, when the war was over...everybody waited to get paid. The Americans waited for the English to pay. The English waited for the French. And the French waited for the Germans. The Huns were supposed to pay reparations, but they were broke...so they printed more money. In the end, after many disasters, no one got paid...neither the Americans, nor the English, nor the French. Instead, they all suffered a worldwide depression and then another worldwide war.
Same lessons: if you can't pay; don't try; don't pretend. Default.
And now the European states are in debt again. Not because of war, because of the social welfare system...aging populations...and bank debt. They cannot pay. So they try austerity measures and borrow more. The Chinese and Japanese are the latest benefactors.
In the US...the problem is similar. The government runs at a loss. Debt mounts up. The states implement austerity efforts; they have no choice. The central government, like Germany, prints money.
Now, both America and Europe are the Old World. Their social welfare model is failing. It was developed as a response to the needs of the nation state in the early days of the industrial revolution. It was suited to an era with expanding populations, fast-growing wealth, large pools of factory labor and almost unlimited resources. Governments needed to keep the urban masses under control. It was no good to provide them with security, insist that they obey the laws, and let it go at that. The politician that promised only a dollar's worth of benefit for a dollar's worth of taxes was soon replaced by one who promised to give back $1.20...or $1.50. In theory, this made perfect sense. Once government became recognized as the servant of the people, rather than their master, the people had a right to get their moneys' worth. And then, why would anyone willingly submit to the authority of a government if it delivered no more than the citizen could get on his own? Why allow yourself to be forced to pay into the government's social security program, for example, if it paid out no better than a private plan? Or, if the government's health care system delivers no more or better service than you can get from private plans, what's the point?
The promise of government's social welfare projects was that they would take money from the few rich and the many as yet unborn in order to give it to poor and middle class voters. That is, voters thought they could get something for nothing. And, for a very long time, governments could deliver. They simply relied on the next wealthier, larger generation to make good on promises made to the previous one. It worked for 150 years. But now the next generations are often smaller. And maybe poorer. The old live longer. And there are more of them. The rich are too few to pay the bills. The rate of growth has slowed down. The return on additional inputs of debt have turned negative, while trillions in unpaid debt and commitments comes due.
Again, governments in the Old World have borrowed and promised too much. But rather than default honestly and openly, (forcing the people who lent imprudently to take the losses) they try to put the burden of the losses onto the innocent citizen...and the unenlightened investor.
He will pay higher taxes. He will get less in services. His money...his savings...his pension - all will be devalued by inflation. If he has stocks...they too will likely be sold off in the financial crises to come.
But let's look at another, more recent example. Iceland.
You may remember, two years ago Iceland was a mess. Its banks had borrowed, lent, and speculated recklessly. Iceland's feds squirmed and winced. At first, the government decided it would do what Ireland was doing. It would rescue the banks...that is, it would bail out the banks' lenders with public funds.
But when the public caught on to what was going on, a referendum was held. Voters rejected the bailout as if they were voting against sin itself. More than 90% of voters cast ballots against a taxpayer bailout. We were impressed. We wrote about it. The "Patsy Revolt of 2009" we called it.
Unable to stick the voters with the losses, the government left the banks to default.
Was this the end of the world? Did Iceland slip below the North Atlantic waves...joining the Titanic on the chilly, dark bottom of the sea? Did commerce break down? Did the Icelandic money become worthless? Was this the "end of time"...the apocalypse forecast in the Bible?
Nope.
"Iceland is doing better than anyone could have hoped," reports Bloomberg.
Inflation fell from 18% down to 5% last year. The cost of insuring Icelandic debt fell to less than a third of the price in early 2009. Unemployment is barely 6%.
"Thanks to its rescue plan," says the IMF, "the recession in Iceland has been less deep than expected and not worse than in the other countries deeply affected."
How did they achieve this? Are the Icelanders smarter than the Europeans?
Not exactly. They tried the typical dead-end solution. The trouble was, no one would lend Iceland more money. And once the public revolted, after realizing that it would be left holding the bag, the Icelandic feds had no choice. They had exhausted all the bad ideas. They were forced to go with a good one.
The foreign debt was consolidated into a few banks...which then went broke. The remaining banks were left intact, ready to keep the country's financial machinery in business.
Lesson learned: got too much debt? Default quickly. Make it clean. Make it fast. Make it work.
There. That's all the advice we're going to give today. Any European or American government that would like more details could contact us on our mobile phone...if we had one.
Regards,
Bill Bonner
http://globaleconomicanalysis.blogspot. ... ffers.html
Here's a paper from Bill Bonner on default.
Still, in the spirit of civic betterment, today exceptionally, we offer a bit of advice to financial authorities all over the world. In a word:
Default!
When you have more debt than you can pay, it is always best to own up...default...hang your head...say you're sorry...promise not to do it again...
..and go about your business. And do it as soon as possible.
Whence cometh this august advice? From the pages of history - recent...and not so recent.
In the second half of the 19th century, the Arab states borrowed heavily from Europeans. The Ottoman Empire was an anachronism. The modern state had already been developed by Napoleon and Bismarck. Meanwhile, in America, the War Between the States sealed the fate of the founding fathers' republic. The limited government of Jefferson became the runaway military government of Lincoln...and later the all- powerful social welfare state of Franklin Roosevelt.
Back in the Old World, in the 19th century, modern technology gave Europeans a huge advantage over their neighbors. The Ottomans - who governed from the Balkans to Morocco - were being left behind. Their economies were less productive, so they lacked the tax base needed to sustain modern armies. So, they brought in European entrepreneurs and European capital to build railroads, canals and other improvements.
Then, as now, declining economies were supported by more dynamic ones.
"China's lending hits new heights," says a headline at The Financial Times today.
China has the most dynamic economy in the world...with $2.8 trillion in reserves, most of it in dollars. It is lending money all over the world. It is America's biggest creditor. And now it is helping wobbly European nations go deeper into debt too.
Foreign money comes at a cost. When the Ottomans couldn't pay, they tried austerity...and then borrowed more. The natives grew restless under the austerity measures. The debt grew larger too...as more and more money was needed to support previous borrowing.
Soon, there was no way out. Backed by better armies, the Europeans foreclosed. France's general Bugeaud laid waste to Algeria's fertile plains. Later, France found a pretext to invade Tunisia. Italy took Libya. Britain invaded Egypt. Soon, Europeans were in control of all of North Africa...and much of the Levant.
Lesson # 1 - don't borrow from foreigners.
Lesson #2 - if you get into trouble, don't borrow more from the foreigners. Default.
And we return to our theme...
Next, it was the Europeans' turn to be the borrowers. They got into a nasty, pointless war in 1914. The French borrowed from the English. The English borrowed from the Americans. The Germans couldn't borrow, so they printed money.
Then, when the war was over...everybody waited to get paid. The Americans waited for the English to pay. The English waited for the French. And the French waited for the Germans. The Huns were supposed to pay reparations, but they were broke...so they printed more money. In the end, after many disasters, no one got paid...neither the Americans, nor the English, nor the French. Instead, they all suffered a worldwide depression and then another worldwide war.
Same lessons: if you can't pay; don't try; don't pretend. Default.
And now the European states are in debt again. Not because of war, because of the social welfare system...aging populations...and bank debt. They cannot pay. So they try austerity measures and borrow more. The Chinese and Japanese are the latest benefactors.
In the US...the problem is similar. The government runs at a loss. Debt mounts up. The states implement austerity efforts; they have no choice. The central government, like Germany, prints money.
Now, both America and Europe are the Old World. Their social welfare model is failing. It was developed as a response to the needs of the nation state in the early days of the industrial revolution. It was suited to an era with expanding populations, fast-growing wealth, large pools of factory labor and almost unlimited resources. Governments needed to keep the urban masses under control. It was no good to provide them with security, insist that they obey the laws, and let it go at that. The politician that promised only a dollar's worth of benefit for a dollar's worth of taxes was soon replaced by one who promised to give back $1.20...or $1.50. In theory, this made perfect sense. Once government became recognized as the servant of the people, rather than their master, the people had a right to get their moneys' worth. And then, why would anyone willingly submit to the authority of a government if it delivered no more than the citizen could get on his own? Why allow yourself to be forced to pay into the government's social security program, for example, if it paid out no better than a private plan? Or, if the government's health care system delivers no more or better service than you can get from private plans, what's the point?
The promise of government's social welfare projects was that they would take money from the few rich and the many as yet unborn in order to give it to poor and middle class voters. That is, voters thought they could get something for nothing. And, for a very long time, governments could deliver. They simply relied on the next wealthier, larger generation to make good on promises made to the previous one. It worked for 150 years. But now the next generations are often smaller. And maybe poorer. The old live longer. And there are more of them. The rich are too few to pay the bills. The rate of growth has slowed down. The return on additional inputs of debt have turned negative, while trillions in unpaid debt and commitments comes due.
Again, governments in the Old World have borrowed and promised too much. But rather than default honestly and openly, (forcing the people who lent imprudently to take the losses) they try to put the burden of the losses onto the innocent citizen...and the unenlightened investor.
He will pay higher taxes. He will get less in services. His money...his savings...his pension - all will be devalued by inflation. If he has stocks...they too will likely be sold off in the financial crises to come.
But let's look at another, more recent example. Iceland.
You may remember, two years ago Iceland was a mess. Its banks had borrowed, lent, and speculated recklessly. Iceland's feds squirmed and winced. At first, the government decided it would do what Ireland was doing. It would rescue the banks...that is, it would bail out the banks' lenders with public funds.
But when the public caught on to what was going on, a referendum was held. Voters rejected the bailout as if they were voting against sin itself. More than 90% of voters cast ballots against a taxpayer bailout. We were impressed. We wrote about it. The "Patsy Revolt of 2009" we called it.
Unable to stick the voters with the losses, the government left the banks to default.
Was this the end of the world? Did Iceland slip below the North Atlantic waves...joining the Titanic on the chilly, dark bottom of the sea? Did commerce break down? Did the Icelandic money become worthless? Was this the "end of time"...the apocalypse forecast in the Bible?
Nope.
"Iceland is doing better than anyone could have hoped," reports Bloomberg.
Inflation fell from 18% down to 5% last year. The cost of insuring Icelandic debt fell to less than a third of the price in early 2009. Unemployment is barely 6%.
"Thanks to its rescue plan," says the IMF, "the recession in Iceland has been less deep than expected and not worse than in the other countries deeply affected."
How did they achieve this? Are the Icelanders smarter than the Europeans?
Not exactly. They tried the typical dead-end solution. The trouble was, no one would lend Iceland more money. And once the public revolted, after realizing that it would be left holding the bag, the Icelandic feds had no choice. They had exhausted all the bad ideas. They were forced to go with a good one.
The foreign debt was consolidated into a few banks...which then went broke. The remaining banks were left intact, ready to keep the country's financial machinery in business.
Lesson learned: got too much debt? Default quickly. Make it clean. Make it fast. Make it work.
There. That's all the advice we're going to give today. Any European or American government that would like more details could contact us on our mobile phone...if we had one.
Regards,
Bill Bonner
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
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geekster
- Posts: 4865
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The only way to avoid borrowing from foreigners is to run a consistent trade surplus. That means that your country produces more than its people can afford to or is willing to buy and then you become a net lender to foreigners. That is just how the balance of payments works. If you run a trade surplus, you run an investment deficit, if you run a trade deficit you run an investment surplus. Generally, trade surpluses are bad over the long term. A trade deficit says that your country is wealthy enough to purchase more than it produces. The money paid for those foreign purchases returns as either loans or investments that increase production and the wealth of the country even more.
China, for example, is getting itself into a position where it holds a LOT of foreign currency. It NEEDS to buy foreign debt. They actually can't refuse to even if they wanted to. If they want to run a trade surplus with the US, then they need to invest those dollars here. If they don't, then the value of their currency relative to ours adjusts to make up the difference. By not allowing their currency to float naturally, they force an imbalance into the system.
They have a few choices:
They can continue to keep their currency at the current levels in which case they MUST invest it here to prevent their becoming awash in dollars that they can't do anything with. That is what they are doing today.
They can allow their currency to float naturally against the dollar. This will adjust the value of their currency according to the balance of payments. If they hold dollars and do not buy US debt or otherwise invest them here, the value of their currency will rise relative to ours making their goods more expensive for us and reducing trade. (in other words, when the supply of dollars in China increases, the value of them relative to their own currency goes down). They seem to be reluctant to take this path though it is the most efficient in economic terms. It allows markets to self-regulate. That is something that scares the living crap out of Communists and "Progressives".
They can base their currency on a "basket" of other currencies so any imbalances are not borne completely against one particular currency. This seems to be the mechanism they are looking at but is the most complicated and most likely to result in unintended consequences, particularly as adjustments are made to that basket.
They can adopt the US dollar as legal tender in China. I haven't thought that one through yet but it would eliminate one set of problems yet create a different set.
China, for example, is getting itself into a position where it holds a LOT of foreign currency. It NEEDS to buy foreign debt. They actually can't refuse to even if they wanted to. If they want to run a trade surplus with the US, then they need to invest those dollars here. If they don't, then the value of their currency relative to ours adjusts to make up the difference. By not allowing their currency to float naturally, they force an imbalance into the system.
They have a few choices:
They can continue to keep their currency at the current levels in which case they MUST invest it here to prevent their becoming awash in dollars that they can't do anything with. That is what they are doing today.
They can allow their currency to float naturally against the dollar. This will adjust the value of their currency according to the balance of payments. If they hold dollars and do not buy US debt or otherwise invest them here, the value of their currency will rise relative to ours making their goods more expensive for us and reducing trade. (in other words, when the supply of dollars in China increases, the value of them relative to their own currency goes down). They seem to be reluctant to take this path though it is the most efficient in economic terms. It allows markets to self-regulate. That is something that scares the living crap out of Communists and "Progressives".
They can base their currency on a "basket" of other currencies so any imbalances are not borne completely against one particular currency. This seems to be the mechanism they are looking at but is the most complicated and most likely to result in unintended consequences, particularly as adjustments are made to that basket.
They can adopt the US dollar as legal tender in China. I haven't thought that one through yet but it would eliminate one set of problems yet create a different set.
Pabst Blue Ribbon - The beer that made Gerlach famous.
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Rabbi Dali Rick
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Roberto Dobbisano
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geekster
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I don't believe the federal reserve is going to be able to keep interest rates artificially low much longer. Particularly in the face of this:
http://online.wsj.com/article/SB1000142 ... TopStories
http://online.wsj.com/article/SB1000142 ... TopStories
Pabst Blue Ribbon - The beer that made Gerlach famous.
According to the chart in the article it appears that the US has experienced deflation.geekster wrote:I don't believe the federal reserve is going to be able to keep interest rates artificially low much longer. Particularly in the face of this:
http://online.wsj.com/article/SB1000142 ... TopStories
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geekster
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It did ... until the end of the graph, see the uptick? And reading the article, that uptick is likely to accelerate.
Ok, take for example Chinese inflation. As the economy inflates in China, they are going to start demanding a higher price for their goods. EVERYTHING we buy in this country is made in China. When China inflates, we inflate.
What caused most of the deflation in the US was housing. Most of that has worked its way out, we aren't likely to see a drop over the next three years as great as we have seen over the past three years. As other economies inflate and as we need to spend more to purchase their goods, so will our economy inflate.
Actually, that is what this administration wants. They are trying to get out of the housing value collapse by inflating the entire economy. The problem is, they have to suddenly STOP the inflation once their goal is met. That is going to be *really* hard to do.
Ok, take for example Chinese inflation. As the economy inflates in China, they are going to start demanding a higher price for their goods. EVERYTHING we buy in this country is made in China. When China inflates, we inflate.
What caused most of the deflation in the US was housing. Most of that has worked its way out, we aren't likely to see a drop over the next three years as great as we have seen over the past three years. As other economies inflate and as we need to spend more to purchase their goods, so will our economy inflate.
Actually, that is what this administration wants. They are trying to get out of the housing value collapse by inflating the entire economy. The problem is, they have to suddenly STOP the inflation once their goal is met. That is going to be *really* hard to do.
Pabst Blue Ribbon - The beer that made Gerlach famous.
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geekster
- Posts: 4865
- Joined: Wed Sep 08, 2004 2:53 pm
- Location: Hospice For The Terminally Breathing
- Contact:
Also, this whole "inflate the economy" bullshit works out great for the bankers, but not for us. Here is why.
Lets say a house costs $200,000. Lets say a cup if coffee costs $1. So a house costs 200,000 cups of coffee.
Now lets say you have a $200,000 mortgage. Bank is on the hook for that amount. Housing prices fall to $100,000. Bank finds the asset backing a $200,000 loan is only worth $100,000. Bank must show a $100,000 liability on the books. Even though you are making the payments, your loan is a negative carry on their books every month.
Now we inflate the economy 4x.
House is worth $400,000, cup of coffee costs $2. House is still worth 200,000 cups of coffee. BUT the bank now has a $200,000 loan on a $400,000 asset. Bank makes out, you .. not so much. If you sold the house at $400,000 you won't be able to do anything more with it than when it was worth $200,000. It has just the same purchasing power as it did before but the bank shows a "profit".
So ... but inflating the the economy 2x and raising the home price from $200,000 to $400,000, the bank shows a $200,000 profit, you would need to pay tax on a capital gain of $200,000 ... but the house is not worth any more than it was at $200,000
Inflation is a tax generator for government and an asset appreciation wonder for the banks. It allows them to release reserves sooner.
Lets say a house costs $200,000. Lets say a cup if coffee costs $1. So a house costs 200,000 cups of coffee.
Now lets say you have a $200,000 mortgage. Bank is on the hook for that amount. Housing prices fall to $100,000. Bank finds the asset backing a $200,000 loan is only worth $100,000. Bank must show a $100,000 liability on the books. Even though you are making the payments, your loan is a negative carry on their books every month.
Now we inflate the economy 4x.
House is worth $400,000, cup of coffee costs $2. House is still worth 200,000 cups of coffee. BUT the bank now has a $200,000 loan on a $400,000 asset. Bank makes out, you .. not so much. If you sold the house at $400,000 you won't be able to do anything more with it than when it was worth $200,000. It has just the same purchasing power as it did before but the bank shows a "profit".
So ... but inflating the the economy 2x and raising the home price from $200,000 to $400,000, the bank shows a $200,000 profit, you would need to pay tax on a capital gain of $200,000 ... but the house is not worth any more than it was at $200,000
Inflation is a tax generator for government and an asset appreciation wonder for the banks. It allows them to release reserves sooner.
Pabst Blue Ribbon - The beer that made Gerlach famous.
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can't sit still
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- Location: SoCal
Geekster, the banks are still operating on false assumptions,,,,, on an old paradigm. The results that you illustrate will NOT happen.
The 'Automatic Earth" makes good cause to show that we are in deflation with price increases in housing and energy caused by speculation. I can't really say.
Aside from that,,, the old paradigm has collapsed and is no longer valid. You illustrate relationships between inflation and house price. You have neglected the relationship between house price and wages. There will be NO wage-price spiral in this country. China,,, yes. Here,, NO.
Aggregate wages are dropping. Remuneration is dropping. The percentage employed is dropping;
http://theautomaticearth.blogspot.com/2 ... g-age.html
The houses are NOT going to sell ! It's that simple. Boneheads like Cramer haven't got a clue;
http://housingdoom.com/2011/01/21/scary ... s-is-over/
15 million jobs just failed to appear;
http://nationaljournal.com/member/magaz ... 120?page=1
There will be NO recovery without jobs. There will be no recovery. Capital costs and labor [to a smaller degree] preclude the return of manufacturing jobs. The price of a house is always dependent on the wages in the same area. As we gradually morph towards a global-mean wage, remuneration will continue to fall.
The 'Automatic Earth" makes good cause to show that we are in deflation with price increases in housing and energy caused by speculation. I can't really say.
Aside from that,,, the old paradigm has collapsed and is no longer valid. You illustrate relationships between inflation and house price. You have neglected the relationship between house price and wages. There will be NO wage-price spiral in this country. China,,, yes. Here,, NO.
Aggregate wages are dropping. Remuneration is dropping. The percentage employed is dropping;
http://theautomaticearth.blogspot.com/2 ... g-age.html
The houses are NOT going to sell ! It's that simple. Boneheads like Cramer haven't got a clue;
http://housingdoom.com/2011/01/21/scary ... s-is-over/
15 million jobs just failed to appear;
http://nationaljournal.com/member/magaz ... 120?page=1
There will be NO recovery without jobs. There will be no recovery. Capital costs and labor [to a smaller degree] preclude the return of manufacturing jobs. The price of a house is always dependent on the wages in the same area. As we gradually morph towards a global-mean wage, remuneration will continue to fall.
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
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can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
This takes a second post. It's obvious that the banks are looking out for,,,,, the banks.
The FED is looking out for the ,,,, FED. Here is an article that shows pretty well that GOV will look out for ,,,GOV,,,, with very little effort for anything,,,, or anybody else.
The first thing to be aware of is that GOV has TONS of money. They just come running to wring it out of the taxpayer regardless of how much they already have. For those of you who aren't aware of the annual report on finance from GOV, this will be a real eye-opener;
http://www.examiner.com/la-county-nonpa ... t-deficits
They stash it all away and scream "POOR" at all the taxpayers.
Here is the article. Much of it is speculation but,,, it fits the pattern well.
http://www.rense.com/general92/treasss.htm A couple of quotes.
Geithner, speaking about a default says, "Payments on a broad range of benefits and other U.S. obligations would be discontinued, limited, or adversely affected, including:
U.S. military salaries and retirement benefits;
Social Security and Medicare benefits;
veterans' benefits;
federal civil service salaries and retirement benefits "
etc
etc.
The article is by James West. he goes on to say;
"I personally am stunned. No mention is made of sales of assets held by the United States government. Rather than liquidate its own real estate to cover its debt, the defective and fiducially delinquent U.S. government plans to first eradicate the incomes of its poorest citizens.
If this document is not a harbinger of impending civil unrest on a national scale in the United States, I can't imagine what is. Big big changes are on the horizon though. Of that there is no doubt. "
Just imagine what the economy will look like if oil goes up WITH interest rates;
http://globaleconomicanalysis.blogspot. ... mains.html
The default scenario is not just conjecture. Even the Congressional Budget Office has said that it is unavoidable. Think about it. The "cheerleaders" are working overtime. BUT, Geithner talks about default. He was talking about a question of raising or not raising the debt ceiling The debt ceiling has been raised 70 times. Why is he talking NOW about the fallout if it is not raised?
Y'all might want to give some thought to what a default would mean to you.
The FED is looking out for the ,,,, FED. Here is an article that shows pretty well that GOV will look out for ,,,GOV,,,, with very little effort for anything,,,, or anybody else.
The first thing to be aware of is that GOV has TONS of money. They just come running to wring it out of the taxpayer regardless of how much they already have. For those of you who aren't aware of the annual report on finance from GOV, this will be a real eye-opener;
http://www.examiner.com/la-county-nonpa ... t-deficits
They stash it all away and scream "POOR" at all the taxpayers.
Here is the article. Much of it is speculation but,,, it fits the pattern well.
http://www.rense.com/general92/treasss.htm A couple of quotes.
Geithner, speaking about a default says, "Payments on a broad range of benefits and other U.S. obligations would be discontinued, limited, or adversely affected, including:
U.S. military salaries and retirement benefits;
Social Security and Medicare benefits;
veterans' benefits;
federal civil service salaries and retirement benefits "
etc
etc.
The article is by James West. he goes on to say;
"I personally am stunned. No mention is made of sales of assets held by the United States government. Rather than liquidate its own real estate to cover its debt, the defective and fiducially delinquent U.S. government plans to first eradicate the incomes of its poorest citizens.
If this document is not a harbinger of impending civil unrest on a national scale in the United States, I can't imagine what is. Big big changes are on the horizon though. Of that there is no doubt. "
Just imagine what the economy will look like if oil goes up WITH interest rates;
http://globaleconomicanalysis.blogspot. ... mains.html
The default scenario is not just conjecture. Even the Congressional Budget Office has said that it is unavoidable. Think about it. The "cheerleaders" are working overtime. BUT, Geithner talks about default. He was talking about a question of raising or not raising the debt ceiling The debt ceiling has been raised 70 times. Why is he talking NOW about the fallout if it is not raised?
Y'all might want to give some thought to what a default would mean to you.
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
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can't sit still
- Posts: 4645
- Joined: Tue Aug 23, 2005 4:21 pm
- Location: SoCal
The structural problems are the scary part. This article talks about them.
"actually slow job creation as businesses introduce more efficient processes."
"the President is frustrated by the dearth of new ideas for coping with widespread joblessness."
"Most of the benefits of growth went to the top 1 percent of the population."
"Without broadly shared prosperity, there is insufficient demand for what we are able to produce"
"The middle class must have the purchasing power needed to fuel future job creation without a return to excessive borrowing"
http://www.brookings.edu/opinions/2011/ ... whill.aspx
That's it in a nutshell. TWO problems. Business efficiency [and wage arbitrage] reduces the number of employees needed domestically. Purchasing power was on a steep downward slope. It was papered over with credit. Purchasing power has been in decline for decades. There is no way to pay higher wages, to increase purchasing power as long as billions worldwide are willing to work for far less. We would kill our exports if we raised wages. We continue to shop Wal Mart,,,, and scream about lost jobs.
These are market forces. Obummer can't combat stupidity AND market forces. He can talk out both sides of his mouth but he can't do anything.
"actually slow job creation as businesses introduce more efficient processes."
"the President is frustrated by the dearth of new ideas for coping with widespread joblessness."
"Most of the benefits of growth went to the top 1 percent of the population."
"Without broadly shared prosperity, there is insufficient demand for what we are able to produce"
"The middle class must have the purchasing power needed to fuel future job creation without a return to excessive borrowing"
http://www.brookings.edu/opinions/2011/ ... whill.aspx
That's it in a nutshell. TWO problems. Business efficiency [and wage arbitrage] reduces the number of employees needed domestically. Purchasing power was on a steep downward slope. It was papered over with credit. Purchasing power has been in decline for decades. There is no way to pay higher wages, to increase purchasing power as long as billions worldwide are willing to work for far less. We would kill our exports if we raised wages. We continue to shop Wal Mart,,,, and scream about lost jobs.
These are market forces. Obummer can't combat stupidity AND market forces. He can talk out both sides of his mouth but he can't do anything.
I don't post things because I believe that they are the absolute truth. I post them because I believe that they should be considered.
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Simon of the Playa
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- Camp Name: La Guilde des Hashischins
- Location: BRC, Nevada.
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geekster
- Posts: 4865
- Joined: Wed Sep 08, 2004 2:53 pm
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Well, look at what the Obumbler is now proposing. After cranking up government spending to the highest level in history he wants to "freeze" it there for five year!
The LAST thing we need is a government spending freeze, we need a draconian and painful spending CUT.
Example:
Completely eliminate the Department of Education. It is completely useless and has no purpose that can not be served by other departments. Educaton in this country is owned by the state governments, not the federal government. If you want to give grants, etc. fine, the individual departments can give those out for people studying in fields that are appropriate for their departments. NASA for science, engineering, and math, same with transportation and energy departments. Foreign studies from State, etc.
That is the lowest hanging fruit. That entire department can be abolished with the stroke of a pen and everyone in this country would be better served.
The LAST thing we need is a government spending freeze, we need a draconian and painful spending CUT.
Example:
Completely eliminate the Department of Education. It is completely useless and has no purpose that can not be served by other departments. Educaton in this country is owned by the state governments, not the federal government. If you want to give grants, etc. fine, the individual departments can give those out for people studying in fields that are appropriate for their departments. NASA for science, engineering, and math, same with transportation and energy departments. Foreign studies from State, etc.
That is the lowest hanging fruit. That entire department can be abolished with the stroke of a pen and everyone in this country would be better served.
Pabst Blue Ribbon - The beer that made Gerlach famous.
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Simon of the Playa
- Posts: 22827
- Joined: Thu Sep 06, 2007 6:25 pm
- Burning Since: 1996
- Camp Name: La Guilde des Hashischins
- Location: BRC, Nevada.
it's funny, how it often takes years, or decades before the truth, or the consequences of a presidents actions are fully known.
Bill Clinton is a perfect example...I did not like the man at first, not one bit.
i worked for Gov. moonbeam in 92', and despised Clinton and his gang of DLC neo neo middle of the roaders.
after 8 years of unheralded peace and prosperity, i actually kind of dig Elvis now...he did a good job, even against the backdrop of puerile republican witch hunting and scape-goating.
now george the second, he really fucked shit up. REALLY fucked shit up.
And COMMANDER-IN-CHIEF OBAMA, PRESIDENT OBAMA was handed off a giant sack of said shit to clean up.
he is doing a good job, you are wrong and hasty in your judgements.
you are politically motivated in your posts and denigration of OUR president.
come see me in twenty years so i can remind you again of what short-sighted ugly hate-filled rhetoric you spewed against the man when the Historians tell us otherwise.
Yeah, I'm a Democrat, a Liberal and I'm damn proud of it, AND the job OUR president is doing to solve a terrible crisis that he inherited from a terrible administration.
Go Fuck yourselves, and your hypocritical nonsense based on lies.
Bill Clinton is a perfect example...I did not like the man at first, not one bit.
i worked for Gov. moonbeam in 92', and despised Clinton and his gang of DLC neo neo middle of the roaders.
after 8 years of unheralded peace and prosperity, i actually kind of dig Elvis now...he did a good job, even against the backdrop of puerile republican witch hunting and scape-goating.
now george the second, he really fucked shit up. REALLY fucked shit up.
And COMMANDER-IN-CHIEF OBAMA, PRESIDENT OBAMA was handed off a giant sack of said shit to clean up.
he is doing a good job, you are wrong and hasty in your judgements.
you are politically motivated in your posts and denigration of OUR president.
come see me in twenty years so i can remind you again of what short-sighted ugly hate-filled rhetoric you spewed against the man when the Historians tell us otherwise.
Yeah, I'm a Democrat, a Liberal and I'm damn proud of it, AND the job OUR president is doing to solve a terrible crisis that he inherited from a terrible administration.
Go Fuck yourselves, and your hypocritical nonsense based on lies.
Frida Be You & Me
more gas to the flame wars.....
showing examples of how the economy is f--cked, thanks in part to bad home loan derivatives, isn't necessarily awful if it makes someone realize that we humans don't matter on PL statements from med.insurance, banks,etc.
and
since when have witch hunts not existed?
i thought "burn the witch" was as effective as yelling out "boobs"
its always been an effective disorient tactic - now most folks remember clinton getting blown, & the extraordinarily weak denials that followed instead of nafta -
and while he certainly had his fair share of suckage, comparatively to W.,as the figurehead and the subsequent 00-08 cabinet,
ee-gah! bring back slick willie! roll some papers! get under that desk!
we should have better options though, and it can angry up the blood when we don't, especially after taking action.
so i'm going to roll into llc hq, proclaim that "god wanted me to do this job", start a war with gerlach and charge you $29,936 for my toilet seat covers.
showing examples of how the economy is f--cked, thanks in part to bad home loan derivatives, isn't necessarily awful if it makes someone realize that we humans don't matter on PL statements from med.insurance, banks,etc.
and
since when have witch hunts not existed?
i thought "burn the witch" was as effective as yelling out "boobs"
its always been an effective disorient tactic - now most folks remember clinton getting blown, & the extraordinarily weak denials that followed instead of nafta -
and while he certainly had his fair share of suckage, comparatively to W.,as the figurehead and the subsequent 00-08 cabinet,
ee-gah! bring back slick willie! roll some papers! get under that desk!
we should have better options though, and it can angry up the blood when we don't, especially after taking action.
so i'm going to roll into llc hq, proclaim that "god wanted me to do this job", start a war with gerlach and charge you $29,936 for my toilet seat covers.
your witty rejoinder just flew over my head.....
no trust fund getting supply buying self-reliant non-bankrolled questionable artistic contributor sacrificing electronics at will build it destroy it clean it haul it financially uninterested uber-bot
no trust fund getting supply buying self-reliant non-bankrolled questionable artistic contributor sacrificing electronics at will build it destroy it clean it haul it financially uninterested uber-bot