It is, er, ‘puzzling’ that the markets, after recovering most of their value (for no apparent reason) have suddenly ‘reversed course’ (again, for no apparent reason.) Which begs the question of who is Wall Street ‘screwing’ now? Because you KNOW the so-called equity markets have NO BASIS IN REALITY.
Officially, it is, er, ‘fear’ over Greek insolvency that is behind the latest market ‘hiccup’ but honestly good citizen, we’re talking a nation roughly the size of the State of Michigan with a population of ‘only’ 11 million…
Think about it good citizen, if a tiny nation like this can cause the global economy to go into a tailspin, we’ve got much larger problems than the corporate owned MSM is willing to admit to.
On the other hand this could be an indication of just how, er, ‘false’ the world’s fiat currency regimes really are…which begs a different question, what the hell are you killing yourself for?
Or, why doesn’t everybody have to bust their balls AND do without the way you’re forced to?
It is only through ‘currency manipulation’ that the ‘cheaper there’ even exists…one major screwjob right there in front of your eyes! How else are you being played for a ‘chump’? (Not that there is very much you can actually do about it...if you want to continue to live indoors and eat regularly…what? You’re not doing that either? Well, don’t look now but it looks like you’re taking it in both ends! How’s that taste anyway? [Purloined from: Some Assembly Required]
"I Don’t Think They’ve Learned Anything"
Those are the words of David Roche of Independent Strategies, who is "well known for his outspoken but prescient views" according to his website. Roche is referring to the U.S. government in general and the Federal Reserve in particular. He believes our beloved Central Bank should be raising rates now, not waiting for an "extended period." He's right, of course, but the U.S. economy still requires emergency life-support. Without that intervention, we would have the Depression we so richly deserve after a 25-year credit bubble.
First the CNBC video (ht Tim Iacono) and some selected quotes followed by some commentary. [Video is interesting (if you like busty blondes) but not particularly ‘worthwhile’ from an informative perspective. (Nothing ‘new’ here.)]
Roche: What they’re trying to do is start off more bubbles. If you look at consumer spending, it is picking up. Of course it’s picking up. U.S. households now get more money from the government than they pay in taxes … So, what the authorities are trying to do is actually to add state leverage, government bond leverage to private sector leverage so that the bubbles go on and the consumption goes on. At the same time, of course, because money is free to the banks, the banks don’t want to lend that much, so they will actually buy government bonds — which enables the government to give out some more money...
The real problem in America is that the consumer needs to save and not borrow to buy the American Dream. He needs to earn it, not borrow... Until that lesson is learned ... [will it be learned?] Yes it will be learned. It will be learned when the next credit bubble, which will be a sovereign credit bubble, goes [belly-up]. There will be no more policy tools left to bail the world out of its own profligacy. That's when it will be learned. [Um, once again we have a capitalist ‘nitwit’ who totally ignores the level of ‘control’ the average individual has over their ‘paycheck’. If we restrict the market for housing only to those who write their own paychecks, the pool of ready buyers shrinks to virtually nothing…which leaves the banking sector in a mighty, er, ‘bloated’ position.]
Roche is contemptuous of U.S. government policy. And why wouldn't he be? America does not have a real economy. America has a phony stimulus-driven "free money" economy. Public debt has replaced private debt in a futile attempt to keep the credit-based consumption party going.
I don't know where Roche got the idea that our government is giving away more money to households than they pay in taxes. Yes, we had/have cash-for-clunkers, the 1st-time home buyers credit, a few ineffective attempts to keep people in their houses, etc. And then there's all the unemployment payouts and food stamps. Despite all of this spending, most of the "free money" is going to the insolvent financial system, not to households. [Um, don’t forget all of those states who are using federal dollars to fund their now exhausted unemployment funds…and those frigging ‘food stamps’ aren’t ‘free’ either!]
Other than that nitpick, I agree with everything Roche says. We truly do have a money merry-go-round as he describes. In fact, I don't think Roche goes far enough. Things are worse than Roche believes. So many Americans can not save any money. They're living paycheck-to-paycheck or couldn't raise $2000 dollars in a pinch if their lives depended on it—which they might. People in the middle or at the bottom can't boost their savings and the people at the top don't have to. News comes today of a study published last February that shows who is unemployed by income level.
Unemployment_income_decile
Unemployment Rates in the U.S. for Workers in Selected Deciles of the Household Income Distribution, 4th Quarter 2009 (in %). You can see who takes it in the shorts when the house of cards falls down.
That's clear enough, isn't it? We have well-entrenched class system in the United States based on money. Much of this inequity is the result of an insane policy in which Americans effectively traded good-paying jobs for cheap foreign goods during the Era of Globalization. I described how this worked in “When In Doubt, Blame China.” [Rather than the REAL culprits, the fucking capitalists who directly benefit from this unsustainable ‘race to the bottom’.]
Suppose you have a phony economy like this one. If you're a policy-maker in the White House, the Treasury or the Fed, you either know the economy is phony or you don't. If you don't know it, you are clueless, and David Roche's criticisms apply. If you do know it, and you're partly responsible for it, you will certainly want to cover-up that reality for as long as possible, at least until 1) you're out of power or 2) dead.
So, have "they" learned anything? Well, no, and they're not going to. It makes no difference whether you were sold down the river knowingly or unknowingly—you're still between a rock and a hard place. It makes no difference whether Ben Bernanke just recently figured out what a bubble is. Over the longer haul, it makes no difference if the Fed raises rates now or later after an "extended period." The damage is already done. That's why the Empire is in Decline. [But not for those responsible for the ‘gutting’ of our nation, they’re doing fine!]
I can trot out the numbers, and you will believe me or you won't believe me. In one forum I ran across, DOTE was described as a "doomerish" website. Let me correct that superficial perception. DOTE is a reality-based website. You could just as well label David Roche a doomer, or all of the other smart people I've quoted on this blog who are warning that we're up shit creek without a paddle.
I'm sorry—that's just the way it is.
At the risk of ‘belaboring the obvious’, I too consider these pages (My blog) to be ‘reality-based’ even if the content and my ‘take’ upon it could be considered…er, ‘suspect’.
The ‘value’ I offer you good citizen is a ‘different perspective’ you won’t find elsewhere. There is not ‘capitalist’ solution to this, er, ‘crisis’ and you can believe me when I tell you, the only ones who will ‘suffer’ once what passes for our economy ‘evaporates into nothingness’ will be the suddenly ‘superfluous’ worker.
Those who extracted their fortune from you will have expanded their ‘market share’ in the same places they sent your job to…so they will do just fine.
If nobody needs you here in the hollowed out wasteland formerly known as the USA, it’s not their problem…it’s yours.
If you think they have you beat, then you’re beat.
If you can see that you still have a job to do…well, carpe deim, soldier!
Thanks for letting me inside your head,
Gegner
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