Thursday, June 10, 2010

Tim Geithner And The Theatre Of The Utterly Ridiculous...

I see Geithner is on the stump today bestowing his infinite wisdom on the world and exercising his belief that he has the right to explain to China how they should manage their monetary policy: 
“The distortions caused by China’s exchange rate spread far beyond China’s borders and are an impediment to the global rebalancing we need,” Geithner said in prepared testimony before the Senate Finance Committee today. A more flexible yuan would allow China to pursue “a more effective, independent monetary policy, which is particularly important now, with China’s economy facing a risk of inflation in goods and in asset prices.”   Here's the link:  Absurd Grandiosity
The fact of the matter is that the primary "distortion" in the global economy - and one that FAR dwarfs any other imbalance - is being caused by the massive imbalance between spending and savings in the United States. Not only does every level of Government in the U.S. operate on a massive spending deficit, but U.S. citizens also, as per net debt levels, engage in deficit spending. I believe Hemingway's bell is tolling for Tim, not China.

I'm not sure how seriously the Chinese will regard Geithner's comments, considering this the same person who cheats on his income taxes, was so upside-down on his home mortgage that he was forced to rent his house rather than sell it and has helped create and enable the biggest financial catastrophe in history.

My best guess is that, best case, Geithner's comments will be rightfully ignored.  Worst case, it might trigger some sort of subtle adverse response in order to remind Geithner/Obama/Summers/Bernanke that China controls the U.S. financial destiny via its massive Treasury holdings and its willingness to hold them - for now.

Personally, I would love it if China let its currency revalue to a much higher level because it will have the effect of making gold a lot less expensive in terms of yuan, and thereby turbo-charge China's already massive appetite for gold and silver.  In the meantime, I can say with complete conviction that Tim Geithner is one of the biggest baffoons to ever have served in the U.S. Government.


  1. Bernanke says "Gold Acting Differently than Rest of Commodities Group" - I Agree; New Mortgage Applications at 13-Year Low


    ""Gold is Different" Says Bernanke

    Proving that even monetarist clowns can sometimes say something that makes sense, I have to agree with Bernanke on this idea: “Gold is out there doing something different from the rest of the commodity group.”

    Indeed it is. The reason has nothing to do with inflation, but everything do with default risk.

    Our little bout of an inflation scare from March 2009 through April 2010 has possibly come to a close. 2007 and 2008 were deflation years in my model and we are back in deflation now given that credit marked to market is clearly plunging once again.

    Gold is Money

    Gold is acting differently because gold is money, and equally important, money that was not borrowed into existence and is no one else's liability.

    How do we know gold is money? Because it acts like it! Please see Misconceptions about Gold for a complete discussion.

    Gold will not default. Good luck with everything else."


  2. The fact of the matter is that the primary "distortion" in the global economy - and one that FAR dwarfs any other imbalance.


    Dave for future reference please refrain from using the word "DWARF" and Geithner in the same post. Hahahaha

    Great post as always


  3. LOL Hopium. Guess that would apply to Bernanke too.

  4. Narb, trust me, Bernanke knows EXACTLY why gold is doing what it's doing. He also knows that if gold keeps doing what it's doing, eventually it will strip the Fed of all of its power (i.e. control over the money supply).

    I believe the Fed/BOE/ECB crooks completely underestimated the massive movement of Asia/ME CB's into gold and out of fiat.

    They got too greedy. History once again repeats. The die is cast...

  5. @ Dave in D,

    I agree.

    Also, just wanted to point out that the post came from...

    Mish, AKA Mike Shedlock!

    Told ya he's one of the good guys!

  6. Mish is myopically dogmatic on Deflation. He also thinks Gold is not manipulated and once said GATA needs to get a new life. I shy away from these types as a blind squirrel does indeed find a nut every so often.

    Joe M.

  7. "I can say with complete conviction that Tim Geithner is one of the biggest baffoons to ever have served in the U.S. Government"

    And that is the requirement to serve at a high level in the USG. Buffoons and easily bought/influenced persons are what the true powers desire.

    What might happen if another person of the intestinal fortitude of say Andrew Jackson or The Mr. Smith from Mr. Smith Goes to Washington (fiction I know) got a hold of true power?

    They might actually act on behalf of the people and upset the well-oiled machine of 'campaign contributions' (aka bribery) that run DC.

    These people ARE either stupid, or just doing what the will of the monied interests. Likely the latter.

  8. I really cannot believe both Giethner and Bernanke are still around. I have always said in life you get what you deserve and after decades of electing baffoons and idiots over and over again we sure are getting what we deserve. Where's my hat, I gotta puke.

  9. Various Blog site are honking all over Gold likes its over. Talk about Propaganda at it highets. They want you to sell you stash so they can buy it up. That is because it is becoming a tight market. For Physical that is.

    Gold is down to $1220,The way the bobble heads are talking, I should just find a bum in the street and give it away.


  11. Joe, I agree. RE: his finding an occassional "nut," that's why I say he basically regurgitates what is already understood and known by people who really get it. He does not get it, as his dogmatic stance on deflation, based on entirely incorrect principles and understanding of economics, says it all. But hey, he can grow a mean wood violet.

    His adherents are equally as zealous and dogmatice in their defense of him - for whatever reason. It's like Denninger, he has blindly loyal cultish following who accept everything he says like scripture.

    I'm actually neutral toward him - it's mind over matter: I don't mind and he doesn't matter. But I will shred anything posted in here that defends his views that go beyond regurgitation of the obvious.

  12. LOL GYC - what are you grilling this weekend? I got rid of my grill when I moved and I'm dying w/out one right now. I'm debating gas vs. coal, but I really want to find a good used green egg or keg grill - i refuse to pay full freight! LOL



  14. Dave in DENVER.

    Question for you. Colorado Buffaloes move to the PAC 10. Does this matter to you?

    If so, I may have a confession to make...

  15. If the Big 12 stayed intact in some fashion with Nebraska/Oklahoma/Texas/Okie St/Mizzou, I would be bummed if CU moved to the Pac 10. I'm bummed it's still not the old Big 8.

    On the other hand, CU needs something to help it reformulate its program, and hopefully it will be the catalyst that will help them pay to get rid of Hawkins.

    And your confession...

  16. "I'm bummed it's still not the old Big 8."

    That's all I need to know.

    Go BIg Red! Please don't ban me.

  17. ROFLMAO. Hey, I hate the Cornhuskers head-to-head, but I always rooted for them as Big 8/12 in bowl games and against Notre Dame LOL.

    Sounds like your boys are headed to the Big 10.

  18. Its a done deal. If/when Texas leaves, I can't wait to see how they will spin it as Nebraska's fault the BIG 12 imploded, even though the Buffs are already gone and UT were pursuing their own TV network and leaving the rest of the conference on their own. Sickening arrogance.

    I can't tell you how many times I've thought of the U of Texas as the BIG Wall Street banks, calling the shots and expecting everyone else to tow the line, good or bad for them.

    T.O. said, enough 11-1 votes, we will do what is in the best interests of the State of Nebraska, It's university, and athletics program.

    I will miss the NU/CU games on Thanksgiving. It was a special day to look forward too, even if the rivalry wasn't what it used to be.

    I digress.

  19. It is sad indeed. Will miss the NU/OU games as well. It's all about t.v. revenues. Like I said earlier, I miss the old Big 8.

    If all this unfolds in our system like it might unfold, we may not be watching football - college of pro - for much longer LOL

  20. I humbly recommend the green egg! We got one last summer, and I use it all the time. I never really liked grilled chicken breasts until I grilled them on the green egg. The difference is night and day.

  21. LOL. A good friend of mine told the same thing about his green egg. Well, it's decided - the die is cast LOL. I'm hoping a good used one shows up on craigslist or I'll bite the bullet soon and just get a new one.