The Roof Is On Fire

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DrKrbyLuv's picture
DrKrbyLuv
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 1995
The Roof Is On Fire

- Link to complete Market Ticker article

The Euro Zone is in serious trouble, and Britain and we are next.  The game's up folks.

Many people talk about us "printing" money. Indeed, there's a large brokerage that runs advertisements on CNBS with that exact claim, over and over and over.  Ron Paul and Peter Schiff have run this mantra for years. - (bold emphasis is mine in this case, the rest is Denninger) 

This chart says something else entirely:

THERE HAS BEEN NO PRINTING GOING ON!

No, what's been happening is worse.

Worldwide governments have borrowed and spent huge percentages of their GDP in a puerile attempt to protect a criminal class that has looted the public and bribed the legislature - THE BANKS.

There was always a point where this would fail, but it is flatly impossible for anyone to know exactly where it was beforehand.  But mathematically, there was a point where it would fail. The gamble that Bernanke, Trichet, Obama, Bush, Paulson, Geithner and everyone else in the world took is that we could do this for a short period of time and that in doing so private demand would pick up and return us to "stability."

THESE PEOPLE DID NOT STUDY THE ABOVE CHART, AND THEY'RE F^#KING IDIOTS FOR BELIEVING THAT WHICH WAS TRIED IN 2003-2007, WITH A HIGHER DEBT LOAD THAN WE HAD THEN, WOULD WORK NOW WHEN IT FAILED IN 2003.

Failed?  Yes, FAILED.

O'Neill was on Bloomberg the other day. He was Bush's Treasury Secretary during part of his first term, until he resigned under pressure from the administration. Why did he resign in 2002?  BECAUSE HE KNEW THAT WHAT THE BUSH ADMINISTRATION WAS DOING WOULD NOT WORK.

A study he ran in 2002 showed that the United States would be running budget deficits of more than $500 billion going forward, and that to fix it we would have to enact an across-the-board tax increase of more than 60% or radically cut entitlement spending.

We did neither, of course, and Bush pushed through a huge entitlement increase in an attempt to appease Democrats. It did, but it also created a structural $500 billion budget deficit that we couldn't get rid of.

The remaining years of the "boom" from 2003-2007 were all fueled by fraud. Unable to generate positive GDP through organic growth and productivity we instead imported 20 million illegal Mexicans (who our current President refuses to send home and seal the border against, even though Calderon, who wants us to legalize them all, arrests and deports more illegal immigrants a year from Mexico than we catch!) and blew a huge housing bubble, giving anyone with a pulse a loan to buy a house irrespective of their ability to pay.

Three years ago I said we couldn't get away with the intervention. Those who have been reading The Ticker since the beginning know that I have written several open letters, have faxed tens of thousands of pages to Congress, and have offered to get in a car or on a plane and come testify - under oath - as to the mathematical certainty of what we face and what we must do.

When debt loads rise to the point that you can no longer buy both today's hamburger and pay for the one you ate last week the impact is deflationary, because today's demand, having been pulled forward from yesterday, can no longer be sustained. Without demand sales collapse and without sales there is no profit - and no employment.

But prayer doesn't work when you're asking God to intervene against a mathematical reality that you created by your own hand, and thus what's coming - and you're asking for the divine to stop - is something you deserve.

Karl, welcome to the zany world of exponential debt. growth, you should have taken the Crash Course years ago.  Our economy is writhing on the floor in convulsions, like a cold turkey addict, as our debt can no longer be sustained.  The private sector could not grow indefinetly so the government stepped in to borrow what it could.  Alas, no matter how much we pump into our veins, the bubbles can't be restarted.

Maybe you should have been talking about monetary reform a few years ago while we had more time?

Larry

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