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alstry (35.44)

The Game Ends When Obama Can't Spend

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August 20, 2009 – Comments (19)

Right now, most of our economy is government spending.  Government spending on health care, welfare, defense, food stamps, unemployment etc.....government spending directly over $6.5 trillion dollars and indirectly probably resonsible for a few trillion more.  The Government is the primary driver of spending in America right now.......a role which has been reversed in recent years as the bankers have cut off the private economy from funds.

THE PROBLEM:  Tax receipts to government are evaporating at a historically unprecedented rate in absolute dollars.  The private economy is coming to a screeching halt.  Commercial Building sales in Manhatten in the first half of the year were down OVER 90% from last year.  Architecture firms are closing down across the nation as there is very little actual work from this point forward.

Our government is spending trillions that does not exist nor will ever likely to matierialize under current Zombulation policies.  No nation in the history of the world has ever been allowed to simply print money to support is population.  By simply printing, you are effectively counterfeiting your currency and destroying the underlying value....something very different than borrowing.

As Buffett alluded to in his recent op ed piece, this will lead to a disaster much worse than the one we perceive we recently avoided.

At this point, if Obama doesn't spend....Wal Mart is dead....so are many health care facilities......and drug stores.....and drug companies.....and defense companies.......and schools......and hospitals..........and local governments dependent on stimulous money........

Now the only problem is where is the money going to come from to support all of the above......without making us all broke?

Right now, our money center banks (that we are loaning money to) are the primary ones buying our debt (loaning us money)....in other words, they are loaning us money with our own money at a much higher interest rate......what do you think they are going to demand when they want to be paid back?

19 Comments – Post Your Own

#1) On August 20, 2009 at 12:11 PM, alstry (35.44) wrote:

The New American Standard?...Worse is Better

Heinz 1Q profit drops, but tops analysts' estimates

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#2) On August 20, 2009 at 12:14 PM, alstry (35.44) wrote:

From Our Buddy Karl Denninger:

*U.S. TREASURY TO AUCTION $27 BILLION IN 52-WEEK BILLS
*U.S. TREASURY TO AUCTION $42 BILLION IN TWO-YEAR NOTES
*U.S. TREASURY TO AUCTION $31 BILLION IN THREE-MONTH BILLS
*U.S. TREASURY TO AUCTION $28 BILLION IN SEVEN-YEAR NOTES
*U.S. TREASURY TO AUCTION $30 BILLION IN SIX-MONTH BILLS
*U.S. TREASURY TO AUCTION $39 BILLION IN FIVE-YEAR NOTES

This is the price of supporting the grift and fraud in our banking system.

I count $207 billion, coming two weeks after a $250 billion dollar week.

Let's annualize - that would be about $5 trillion a year in annualized issuance.  My-oh-my how long can this continue?

Who knows.  What I do know is that this is absolutely unsustainable, it is approaching 40% of GDP annually, and yet this is what is required to keep all the balls and plates in the air as a direct consequence of our government's decision to sponsor and permit massive financial system fraud to continue.

The world's tolerance for this will eventually end and before it does our government had better have changed their tune and cleaned up the mess, because if that has not taken place first the economic consequences will be catastrophic.

Wake up America (and Mr. President); your choice is to heed the alarm clock or you will still be asleep when the ceiling comes crashing down on your head.

http://market-ticker.denninger.net/archives/1356-Treasury-Insanity-In-Support-Of-Grift.html

If you don't think this is your debt too....you are not thinking.

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#3) On August 20, 2009 at 1:06 PM, ocsurf (< 20) wrote:

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#4) On August 20, 2009 at 1:36 PM, AdirondackFund (< 20) wrote:

This is all exactly correct.  Denninger is really quite right.  The fact that Buffet is now sounding the same alarm bell...though being quiet about it in not mentioning ALL of the accumulated debt, both public and private, should cause a few people to think. 

Look, this has been bad policy for a number of decades now and we're measuring the last straw here.  How Obama thinks he can revive an ecoonomy by blowing another Federal Debt bubble is a mystery to me.  It seems Buffet now agrees...at least publically.  So where are we going with all of this?  A higher stock market is no longer a reflection of anything real.  This is what makes the entire proposition untenable.  

Until such time as the US produces and exports something, we are all in big, big trouble.  It is that simple based solely on the numbers.  There is no other way out of debt other than the production of goods and services...or the forgiveness of that debt, neither of which is even likely to occur.  Sad, but we've destroyed our own economy by letting the Banksters like GS lead the country down the wrong path.  Since they're still leading US at GS, then whatever path they choose will take all of us over a cliff.

And now Buffet knows it too and is willing to speak about it in Public.  This can't be good.   

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#5) On August 20, 2009 at 2:01 PM, OneLegged (< 20) wrote:

This is what has me very curious/worried(?).....

 

http://market-ticker.denninger.net/archives/1350-Whistling-Past-The-Graveyard.html 

 

 

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#6) On August 20, 2009 at 2:47 PM, detroitdea (< 20) wrote:

http://news.yahoo.com/s/ap/20090820/ap_on_go_pr_wh/us_obama_budget

The last estimates for the 2009 Budget deficit have dropped from $1.75Trillion to $1.58Trillion.  

"Even at $1.58 trillion, the deficit this year would be three times larger than last year." 

"The nation's debt now stands at $11.7 trillion." 

"Economists predict that an improved economic climate could help reduce the deficit in 2010 fiscal year to $1.3 Trillion"

" the budget year that ends Sept. 30 also will predict Washington will spend $3.653 Trillion this year. "

" Revenues, however, would reach only $2.074 trillion"

 These are the latest estimates. 

 

 

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#7) On August 20, 2009 at 3:43 PM, skeptic86 (94.02) wrote:

onelegged:

 any idea where that data comes from?

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#8) On August 20, 2009 at 5:20 PM, JerseyShoreGirl (< 20) wrote:

Looks like the Mrs. (Obama) likes to spend our money too ...

First Lady Now Requires 26 Servants:  Recession, Depression, What, Michelle Worry? Mrs. Obama Demands Small Army of Attendants

http://canadafreepress.com/index.php/article/13827

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#9) On August 20, 2009 at 8:44 PM, SuperPicks (29.09) wrote:

Great posts and great follow up comments.  Thanks Alstry.

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#10) On August 20, 2009 at 8:55 PM, OneLegged (< 20) wrote:

pv, I don't think Denninger revealed his source.  I don't know where he got it.  I would like to see it in context too.

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#11) On August 20, 2009 at 9:00 PM, OneLegged (< 20) wrote:

Never mind.  Here it is.

 

http://www.treasurydirect.gov/instit/annceresult/press/preanre/2009/2009_cmb.htm

 

Click on "70 Day 8/19" 

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#12) On August 20, 2009 at 11:53 PM, alexxlea (66.91) wrote:

It is my personal opinion that a government should not spend in a year more than it can tax from its corporations and businesses within that same period of time.

If that is not true, then something is very, very, wrong with the system, and there is.

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#13) On August 21, 2009 at 6:26 AM, JerseyShoreGirl (< 20) wrote:

The problem is .. when the bubble inflated, so did the government's budget .. local, state and federal levels .. but since property values were going up, unemployment was low, credit available and homes used like piggy banks, people weren't complaining .. Now the problem that is setting in is that the tax revenue isn't there to sustain these bloated budgets ... and we have an admin in place that LOVES big govt, wants the people to believe that govt will solve your problems .. as opposed to an admin that would stimulate growth of small business .. my bet is that they'll sock it to us with more taxes before they'll seriously cut back ... not to hard to figure out when you see Obama spending like a drunken sailor! 

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#14) On August 21, 2009 at 7:10 AM, dudemonkey (40.07) wrote:

OneLegged,

 

Now check the results of the other auctions.  Doesn't sound so alarming when you realize that right after the march lows the interest rates were basically the same.  I think this blogger you guys are reading is an alarmist with a bad research department, or he's got an agenda.

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#15) On August 21, 2009 at 7:42 AM, Jimmy2008 (< 20) wrote:

dudemonkey,

I read that the Fed bought as much as half of the treasury auction. That kept the rate low. I wonder how long this can last.

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#16) On August 21, 2009 at 9:49 AM, detroitdea (< 20) wrote:

JerseyShoreGirl:

The 2009 Budget of the US Federal Government was submitted by George W. Bush to the 110th Congress.  

The 2009 US fiscal year runs from Oct 1st, 2008 - Sept. 30th, 2009.   

In that proposed budget the estimated debt was already $11.3T 

Within that budget, the deficit was estimated at $611B but due in part to the nearly $800B bailout that was signed by the previous Administration, this year's deficit is estimated to be closer to $1.58T.

Congress writes, debates and passes bills that include appropriations (spending) that either gets signed or rejected by the President.

You might then say that Obama, as part of Congress at the time, was one of the "Drunken Sailors" on the Congressional Titanic just before hitting the iceburg. 

Others may say that it was a sobering decision in order to keep the system running.

The fact is that many of us on board our Nation's ship were drunken sailors intoxicated with the financial myths that were being marketed to each of us in our daily lives.  I know I took a large swig from the barrel.  

Regardless, Alstry and other bloggers have helped me to sober up and open my eyes to see the drunken fool that I have been. Each has contributed lessons from history and current events that slaps me out of this drunken stuper. 

Let's continue analyze the events that got us here and find way to fix them for the sake of our Nation's future.

If we are better informed, maybe we can be more engaged to hold our Congress and President more accountable in the future.

Thank you JerseyShoreGirl, Alstry and all of you who post their comments here and on the other Fool blogs.  

Its a real education.  

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#17) On August 21, 2009 at 10:56 AM, jddubya (37.36) wrote:


#8) On August 07, 2009 at 2:05 PM, alstry (99.37) wrote:

prose,

We have not hit 9.09.

I have pretty much said my peace.

We have about 50 days left.

Going forward I will substantially reduce my blogging as this post pretty much sums things up.

If by the end of September, MOAP never matierializes, Alstry will dematerialize into cyber ether.

This is from this blog

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=240107&t=01002130057764754273

Obviously you've never been one to keep your word

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#18) On August 21, 2009 at 1:57 PM, JerseyShoreGirl (< 20) wrote:

detroitdea  Thanks for your insight as well.  One of the biggest problems this country is currently suffring from is a reality crisis.  There are so many sources of info out there .. cable news, papers, blogs, etc. and given the high stakes right now, people who are genuinely concerned and desperate for the truth.  But since we're all getting information from so many sources, we all have our own perceptions of 'reality' that each of defends.

When I was in Financial Services Sales, I had an amazing Sales Manager who continually told us that (our client's) PERCEPTION IS HIS REALITY.  This country is suffering from a reality crises because not everyone is peeling back the onion and digging a for the truth and views are based on incomplete information.  Make no mistake, our government wants it to be that way, given its influence on the main sources of media.  (I even heard that Chief of Staff, Rahm Emanuel has a conference call every morning with the major news outlets to discuss daily talking points.  Don't you think its funny when you turn from one channel to the next, they're all parroting the same terms of the day ... 'birthers,' 'right-wing extremists,' 'deathers' .. by the way notice how the new trend of the media is to label people and isolate them in a group according to their views?  This is straight out of Saul Alinsky's Rules for Radicals playbook .. and it's growing more obvious and transparent every day they're using that playbook.

Anyway, after reading your comments, I truly hope what I share is of value .. and I'd have to say that we BOTH AGREE that WE, THE AMERICAN PEOPLE DESERVE BETTER THAN THE VAST MAJORITY OF THE POLITICIANS (INCLUDING BUSH) WHO ARE IN IT FOR THEMSELVES and not to represent the best interests of the American people and future generations.  

Now's a great time for Americans join together .. forget squabbling over parties .. "my guy vs. your guy" and channel our energy into getting better people in office.  It's all about DEFENDING OUR CULTURE and what has made this country like no other.  What we have here doesn't come free and just because we were born into it, does not mean it can't be taken away.

 

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#19) On August 21, 2009 at 2:02 PM, prose976 (< 20) wrote:

Hear! Hear!

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