The unemployment insurance system is in crisis due to a combination skyrocketing unemployment and – in some cases – poor planning. A record 20 million Americans collected unemployment benefits last year, and twenty-six states have run out of funds and been forced to borrow from the federal government, raise taxes, or cut benefits
Source: ProPublica.org Link
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/sp_en_6.gif)
Ok--so where in the federal financials do they likely show this? First, its a loan so it is not an expense so its not in any budget.
ReplyDeleteSecond, is the fed just printing and not recording liability of increased debt?
We know it smells bad, but out of curiosity I'd like to know how they are fudging it.
Same thing for health care bill and the push down of medicaid costs to states--the states are BK for the most part so the fed will print and "loan" (if I do that for my kids the IRS says its a gift)
FUBAR
Govt issuing debt - the debt is being funded largely by the excess bank reserves at the Fed -that's $2 trillion which can be borrowed on at like 10:1 and not show up in as an increase in money supply.
ReplyDeleteRead the Turk commentary in which he differentiates "cash currency" and "deposit currency." This will explain to you how the Fed can make money without "printing" money:
http://ftalphaville.ft.com/blog/2010/04/19/205571/acas-rather-disastrous-cdo-forays/
The US, with all its debt, is akin to a closed loop feedback system which will eventually go into "thermal runaway" and seize up. The only difference between now and utter collapse is a small amount of time.
ReplyDeleteJoe M.
Yup. "Thermal runaway" = Weimar-style hyperinflaton.
ReplyDeleteActually, I think this will be so bad we will be able to coin our own word for our hyperinflation.
ReplyDeleteBut there are so many that qualify for being instrumental in this--
(see what happens when I have to kill time waiting for a flight?)
"...twenty-six states have run out of funds and been forced to borrow from the federal government"
ReplyDeleteLOL, this is akin to one broke ass dude borrowing counterfeited notes from another broke ass dude.
Hal, may I suggest "FUBAR-flation"?
Hey Rodd - at least we have draft on Thursday to look forward to!
ReplyDeleteMust Germany bail out Portugal too?
ReplyDeletePortugal, not Greece, poses the greater existential threat to Europe's monetary union.
By Ambrose Evans-Pritchard
Published: 7:13PM BST 18 Apr 2010
More propoganda. I like the bit where he says:
"Brussels admitted last week that Portugal's external accounts have switched from credit in the mid-1990s to a deficit of 109pc of GDP. This has been caused by the incentive structures of EMU itself. "The more broadened access to credit induced a significant reduction in the saving rate, while consumption kept growing faster than GDP. This development led to an increase in Portuguese indebtedness,"
This is all total bullshit. As happened everywhere else banks caused a massive housing bubble in Portugal with deliberately stressed over lending. Portugal is as bad as Spain and now the CDS rates in London show that they are soon going after Spain and Portugal to target France where the CDS spreads are now rapidly widening just as they did on Greece before the take down.
I agree with Eric De Groot follow the money. They are going to take down the dollar. Just as soon as they have finished a decent leg down following the downgrade to AA after either a BIS default or a real payment default with the main lenders they will target the euro again. They are positioning themselves in the CDS market first to attack the largest and most liquid country France.
The swings in these markets are going to become vicious and if the authorities don't finish the banks the banks are going to finish the governments.
Thanks for the color, anonymous. Agree with everything you say except, especially in this country and in the UK, the banks are pretty much the Government. I think there's maybe two Congressmen, Ron Paul and Alan Grayson, who aren't bought and paid for by the banks.
ReplyDeleteAgree on coming volatility of mkts, except that I think gold/silver volatility will be heavily skewed to the upside as smart money flows out of paper and into metal at a faster rate.