At Least Karl Denninger Gets It!!!!
So let’s cut the crap - we are in a Depression right now. We are pretending we are not, just like you can pretend you didn’t really lose your job so long as your credit card does not reach its limit. We have been in that depression for about 18 months and there is no evidence that we will exit it, as we have yet to find a way to pull back the deficit spending without an instantaneous collapse in the economy.
Yet at some point we must and will stop. We will either do so of our own volition, or we will do so when the cost of borrowing skyrockets, as others get tired of funding our profligacy. If we attempt to “print” our way out of it the cost of petroleum products will shoot the moon and destroy our economy anyway.
You haven’t seen the half of what happened though - not yet. It appears that AIG - the company we have bailed out (thus far) to the tune of some $100 billion plus, in fact isn’t done. It appears they may have written credit protection on Greece. If this allegation by the German equivalent to The New York Times is true Americans are going to be asked to pay billions of dollars - or more likely, hundreds of billions (since Greece is almost certainly not the only place - try Spain, Portugal, Ireland, etc) to bail out a bunch of FOREIGN NATIONS.
Do you both think Americans can and will pay that bill? A bill that has been forced on us, and yet benefits not The United States economy, but foreigners?
Wars - big wars - start over much less, my friends.
How Long Before You Wake Up, Politicos?
None of this was hard to see....we simply have become an economy of debt pimps. Our money market funds are debt, our retirement accounts are debt, our pension funds are debt, our community banks are debt, our life insurance policies are debt, our real estate is valued on debt and occupied by the dealers of debt.
Not too long ago, our real estate was occupied by businesses that produced things....things we exported, and debt was issued to support that PRODUCTION. Recently, debt was created to consume.....granite countertops, welfare, and health care......and we built lots of silly buildings to support our consumption....like second and third homes, silly shopping centers, and bank branches to sell even more debt. Just take a look at all the tall buildings in any downtown in America...they are the dwellings of debt dealers.....insurance companies, banks, and "investment" houses.
Many confused consumption with production.......but in the end, we levered our economy up on things simply exist to support needless consumption. And many got rich buying, selling, and then issuing derivitives on debt. Our economy morphed into a casino of debt and derivitives....production was simply the byproduct of debt.
If you think about it, our entire economy, retirement accounts, and most of our jobs simply revolve around debt and the sales and servicing of debt.....and now that we have run out of savings lending foolishly to each other......our nation is simply shutting down....schools, hospitals, cities, police departments, fire departments, businesses and families.
Pretty soon, anger will rise as private citizens who lose jobs, run out of savings, and get kicked out of their homes ask...why can Wall Street banksters borrow unlimited amounts of money for free and loan it back to government at massive profits simply so government workers can maintain a very high standard of living and the rest of the nation suffer???
It is amazing that things havn't broken down already......but it is clear more and more are figuring it out.