And with that 8 word statement, the Fed Chairman announces the end of empire (not that empire was such a good idea), the end of Medicare, Social Security, etc...
The fact that a Fed Chairman has to make this denial should make it abundantly clear that most feel that the Fed has little choice. But what is the Fed to do? Speak plainly and truthfully? The Fed is, in fact, a government agency and a political body, irrespective of its claim of independence. It is not in the business of being truthful.
Governments with massive armies just miles away from their capital cities issue stirring orations of impending victory. Cancer patients speak of "beating this thing". The spouse is the last to know. That is how denial works.
But the emperor has no clothes. What engine is going to drive the repayment of the debt and fund all of those silly programs those dim-witted pols out of San Francisco City Hall thought were such a grand idea?
The Fed will monetize the debt. It will do it over time, like Chinese (American?) water torture, but in the end the Fed alone has the power to soak up all of that paper.
The truly sad and disturbing thing is that when one states the obvious, and lays it at the feet of those responsible, their minions, the "True Believers" come back with sarcastic remarks that anyone who dares to state said obvious must be a capitalistic pig whorefuses to pay his "fair share", a Nazi, a fire breathing right winger, supporter of Oligarchs, cruel to orphans, not to mention, when all else fails, "stupid".
My apologies to the converse sneaker and hip T-Shirt clad, pony tail sporting, testosterone challenged, trust fund benefited Man from Berkley. (sorry, that one got away from me)
YOUR IDEAS HAVE FAILED!! FAILED!!!
Get a new schtick!
Because once the Fed does its little monetizing trick, all those people your posse addicted to those social programs will not take to the streets to thank you for the wonderful largess you have supplied them with. But they will take to the streets, to cook trust fund brats over a garbage can fire - medium rare.
Mentatt
22 comments:
Monetizing the debt sure beats the hell out of taking private debt onto the national debt. Diluting the value of the dollar taxes all bondholders and other holders of cash equally. This crap of protecting favored groups by government bailout is just lousy. Further, when all of that bailing is done, there is no less debt to pay off. It turns us all into tax slaves. It's monetize or sink from where I sit.
Regards,
Coal Guy
You are being ridiculous. I've stated how popular the Federal programs are (80% of the Federal budget goes to five wildly popular programs), so those programs aren't ending. At the state level, you may or may not have a point (they are loaded with welfare too). However, there are also lots of countries (Israel, Iran & Venezuela come to mind) that, while getting external support or having oil resources, have lived with 10% inflation for years -- with monetizing their economies. The U.S. can also. And Scientist's disagreement with Mish notwithstanding, Mish says the Chinese will continue to buy our bonds because they have to, "by definition." It's going to be a long time before anything collapses. The lack of collapse to date should make that clear.
By the way, I'd prefer to see the excess debt end by default and bankruptcy, but since that is NOT ALLOWED TO HAPPEN, I'll take inflation over bailout any day. It's still a way to punish the bondholders who bought that crap.
Regards,
Coal Guy
Bureaucrat, inflation is not the issue, declining energy is. We can also live with that, until we can't.
Even as the Brit Empire was collapsing into dust from the end of WWI thru the 1950's or the German Empire became toast from WWI thru the 1950's, they instituted huge social safety nets. Somehow they were smart enough to do it, we probably will be too. Even the cheese eating surrender monkey French have been able to do it.
Are we dumber than the French.
Oligarchs and elites steal for a time and then the pendulum swings in the other direction.
Eisenhower Era 90% tax rates could even come back. Didn't hurt things in the 1950's too much.
Bureacrat:
Death is extremely unpopular, what does that have to do with inevitability?
Folks, in real terms the safety nets are going to crumble along with employment numbers.
You know what I think, now Let us watch how this unfolds.
I will be happy to eat mey words... but I doubt I'll have to.
Bureaucrat; Iran and Venezuela have surplus oil to sell, you do not. They are borrowing against future income; you don't have future income to borrow against. Israel has (had?) the USA to subsidise it, as you had China to subsidise you. Both are broke without the subsidies.
As for the,'The lack of collapse to date should make that clear'; I am constantly reminded of Wile E Coyote running off the cliff - you'll be ok as long as you DON'T LOOK DOWN!
As for anon's question asking 'Are you dumber than the French'? Well, based on recent financial performance, yes! In France you MUST have a 20% deposit to buy a house or car, by law, and you MUST clear your credit card balance at the end of every month, by law.
Also in France 80% of their electricity comes from nuclear. France has a 220mph rail network, and a fabulous autoroute toll-road network that you guys can only DREAM of. France has great food, not burger bars. I could go on, but I wouldn't want to embarrass you!
(I'm liking this "France" thing more and more every day. Total health care, didn't get caught up in the credit bubble, has nuclear electricity and real trains .. too bad they did such a bad job of conquering America, or we'd be speaking French today. :) )
From Matt Savinar today (LATOC site):
"Many of your friends are proably asking "if the oil inventories are high then why are the prices soaring." Keep in mind there is a bottleneck in many of the refinieries and that this bottleneck is *directly* related to Peak Oil. An increasing amount of the oil in "inventory" is heavy oil. Most of the currently operating refinieries were built to handle the light sweet varieties and reworking them to handle the heavier stuff is extremely capital intensive. With the credit markets nearly completely locked up at a time when oil prices have plunged in the last year, companies can't the loans they need to overhaul their refinieris to handle the heavier stuff."
Look at the recent EIA data. In the US, stockpiling of crude has slowed. Stockpiling of finished product continues. I don't think that refineries are the issue.
Regards,
Coal Guy
Also,
If refineries were the issue, crude would be cheap and finished gasoline and fuel oil would be expensive
I spoke with Greg about this 2 years back. How in the world can refineries be the issue when Crude production has topped and we are still increasing Refinery capacity. Refining capacity exceeds oil production by over 7 million barrels per day.
it was extremely unpopular in -2006 to say Tesero and Valero were going to zero but they are.
M.S. that was more like 3 years ago... and a great call.
With all due respect, I would not listen to any of Savinar's analysis. Analysis is not his line of business.
Bureaucrat;
Yes, I'd forgotten their healthcare system is officially the best in the World (W.H.O.), and their education is in the top 3 I think too.
Re: ' too bad they did such a bad job of conquering America, or we'd be speaking French today.' Maybe they just had wisdom and foresight! ;-)
And, the Democrats have proposed a new healthcare bill that will cost in excess of a $Trillion. They provide no indication of how it will be funded. There is no end to it. I suppose that they are passing all the spending bills now. If the budget gets out of balance, they will consider raising taxes.
Paraphrasing Everett Dirkson, "You spend a trillion here and you spend a trillion there. Pretty soon your talking about real money."
Regards,
Coal Guy
You act as if the health care spending we're doing right now does not fit into the funding of a U.S. universal health care system, as if we'd need all new funding!
What pays for health care now?
Medicare
Medicaid
State contributions to Medicaid
Veterans benefits
Military health care
Nursing home health care
County hospitals & health departments/clinics
Private health care insurance policies
Charity care
Out-of-pocket expenses
and on and on ... $2.2 trillion worth every year.
You can't tell me that every modern country on this planet can do this and we can't. And if Obama gets his medical records modernization, and decent preventative care that finds little problems before they become big problems, and everyone tries to be healthier ... that the current $2.2 trillion would EXCEED what we'd need for universal health care here.
I've heard tell that 50% of US healthcare spending goes to old people who die anyway within 18 months of the money being spent. In other words, 'wasting' it on terminal patients. Is that so? What do you think about that?
We ALL die anyway. When the day comes that some bureaucrat weenie determines that your butt just ain't worth saving, will you smile and praise him for allowing you to serve the common good by dropping dead?
Regards,
Coal Guy
Donal:
The statistic you mention is likely far worse than that... I would be willing to bet that 1/3 of healthcare dollars are spent on the last 3 weeks of life, although I am unable to find data supporting that assertion at the moment... but I will keep at it and would be willing to bet money that I am close.
In answer to Coal Guy's quesstion, that decision is made regularly by medical personnel and combat medics, it is called "Triage" and has been a fundamental component of medicine for well over a century.
When resources are short, you don't waste them on those who cannot be saved or who have little chance of being saved. Expensive tests and open heart surgery on 80 year old patients with heart problems, for instance.
Greg, this is old data but peer reviewed and well documented (see references).
Clicky for Link
Short answer - 40% of total health care costs occur during the last month of life.
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