Friday, September 9, 2011

You Can't Be Serious

We have a monetary system that is accountable to no one and that’s a very good start. If you think about it, the way that the monetary system is structured, the government at this point can literally spend money on anything. They talk about capping the federal deficits and all that, but they’ll get past that in no time at all.
That quote is from a must-read interview:  LINK  Please read this so you are not just hearing this truth from people like me.

I didn't bother watching The Big Speech last night, mainly because I had a competitive tennis match (which I won) but I would have found something otherwise productive or value-added to do with my life in lieu of watching a snake-oil salesman get in front of the nation and put out a program of massive Government spending that is nothing more than an enormous attempt to buy votes from what is now his largest constituency:  the rapidly growing and large segment of the population that is dependent on direct Government transfer payments.

For anyone not familiar with the details of the prosposed "stimulus" program, a good summary can be found HERE (Link)  The most ABSURD idea is his proposal to spend $105 billion on school modernization, transportation projects and vacant land rehabilitation.  Vacant land rehabilitation?

To be sure some of the ideas are based in good intent (I guess).  Like updating schools and keeping teachers to work.  But these are the luxuries of a country that can easily afford programs like that.  Not the vote-buying effort of the failing President of a country with spending deficits and debt obligations that are beyond manageable and growing everyday - at an accelerating rate.   Vacant land rehabilitation?

The proposed spending cut "off-sets," which is the part that Obama promises will "off-set" the cost of the Government's funding of his massive proposal, would occur over the next decade.  Quite honestly, it takes brass balls for someone who just transferred $500 million of Taxpayer money to the failed solar company of a wealthy campaign contributor to get up in front of the American public and ask them to believe in the tooth fairy. Seriously.

There is no easy fix to our country's ongoing systemic failure.  I have said for many years that we need a financial and political "do over."  The former would entail figuring out a way to "re-set" the nation's debt-balance to zero, which will unfortunately require a massive decline in the standard of living for everyone but the most wealthy (those with enough ready-cash to own their own Congressman or President - Buffet, for example).  This will never happen without one big systemic collapse.  And a political "do over?"  Unfortunately, if put to the test of human history, these never happen without a revolution or war.

To end with a note of humor, I thought I would put in a video link to what it was probably like for Obama to learn about the business of Wall Street after he was elected, since he had absolutely no real world work experience in his entire life:

Have a great weekend!


  1. Chico,

    The Mighty USD. All bow to her power.
    The USD goddess affords us the golden opportunity
    to buy more precious as she rises from the ashes.

    Hail USD. She is your friend. Your lover. Your torch
    that leads you to the GoldenLand of precious.

  2. (Dave)

    LOL. You two sound like a couple of bookies to me

  3. Having the rules changed means never having to say you're sorry...FOR BAD BETS!

    View: Gambling Bankers Need a Capital Intervention

    Unfortunately, he’s right. As Bloomberg View has written, Europe’s leaders -- particularly Germany’s Angela Merkel and France’s Nicolas Sarkozy -- are running out of time to avert disaster. Their least bad option is to exchange the debts of struggling governments for jointly backed euro bonds and recapitalize banks. European banks have invested so heavily in the debt of Greece and other strapped governments, and have borrowed so much from U.S. institutions to do so, that the alternative would probably be the kind of systemic financial failure that could send the global economy back into a deep recession.

    At the same time, bankers are campaigning against regulators’ efforts to address a root cause of the problem: Big banks’ addiction to excessive leverage, or to using borrowed money to boost their shareholders’ returns. In a recent flurry of letters to the Basel Committee on Banking Supervision, which is in the process of setting new rules for the largest global institutions, various banking groups warn that higher capital requirements -- tantamount to putting limits on leverage -- will reduce credit availability and stunt the economy’s growth.


    One-Man Lobby Dimon Presses Washington to Ease Bank Rules: Influential 50
    “Jamie is a talent,” Paulson told Bloomberg Television last year, lauding Dimon as a strong leader who was able in little time to pull together a difficult deal to save Bear Stearns.

    Secretary Dimon?

  4. Pretty good rant..don't know why he hates gold ie it is real money...


    A Greek default is considered credible by Germany and they are taking official actions related to that possibility. So much for the denials.

    German banks (and presumably French banks and all the other big banks too) are insolvent as they are carrying these bonds at well above their actual value in the marketplace. If the bonds were carried at the claimed "loss" values, which is quoted as 50%, then there would be no need to recapitalize them would there? This is an official statement of proof that the banks are lying about asset values and are in fact insolvent.

    Remember that we were just told days ago that these banks were fine and needed no capital and in fact calls for more capital by the IMF were officially refused. The same claim has been made about our banks. You were just told officially by Germany that their claim of adequate capital just days ago was a lie as they are now planning to recapitalize the banks. Do you believe our banks are not similarly exposed and also insolvent? YOU'RE BETTING YOUR FUTURE ON THE BELIEF THAT THEY ARE, SO THIS QUESTION IS QUITE GERMANE AND TIMELY: ARE YOU SURE YOU'RE NOT BEING LIED TO EXACTLY AS WE WERE ABOUT GERMAN BANKS?

    I said the Euro was going to par, and that might be too conservative. With that our stock market will get cut in half -- or more -- from here and once again the banks, insurance companies and everyone else will start crying poor mouth.

    The problem is that this time there's no money to bail them out with in the US and as a result if this outcome manifests they will fail. The embedded losses in those institutions on mortgages alone total trillions, which is several times the available debt ceiling and so far beyond the FDIC's reserves that there is no way to cover you, the average person.

    Nobody - and I do mean nobody - in our political establishment from either party gives a damn about the lies and outright fraud in our financial system. Neither political party, including some very specific representatives that have railed about various problems in capital markets, the IMF and similar over the last couple of years will even open their damn mouths, say much less demand structural changes and an end to the frauds.


  5. ..listen

    BANK OF AMERICA IS DOOMED, Says Chris Whalen—Stop Firing People And Just Declare Bankruptcy Now

    Read more:

  6. watch pisani(cnbc) get schooled by rogers

    Bob, (with attempt #2 to get Rogers to appear "bullish"): So you're bullish?

    Rogers: Bob, to your point, Bernanke has been lying to us again. He announced in early august that he was going to keep interest rates at a very low rate for two years. Now, Bob, how is he going to do that? You can't just say the words. You have to go into the market and force interest rates down. Come on. What is this, you believe in the tooth fairy? He's in there. That's the only way he can do it. If you don't believe the theory of monetary policy works, get out the unadjusted numbers since the beginning of august and you will see they shot up starting at the beginning of august as soon as he said we're going keep interest rates down. So he's in the market. He may be lying to us, they usually do, But he's in there. Be prepared.

  7. What a week. Congrats on the tennis match. Have a great weekend too.

  8. Dead serious....a class of people demolished!

    Bernanke “Let Them Buy Cake” Reveals Pathological Blindness

    6. Worse prospects for retirement. Bernanke also stunningly missed how the risk of retirement income has been shifted onto consumers. Defined benefit plans have become defined contribution. People who thought they had a secure pension have had them cut back. And how do you earn enough to retire these days? MyLessThanPrimeBeef did some math:

    If you make $50,000/yr before retirement and wish to have 60% of that after retirement, how much do you have to save in order to earn that much in your 0.5% bank account?

    Let’s see, $50,000 x 0.6 = $30,000

    @ 0.5% interest:

    $30,000/0.005 = $6,000,000.

    If you didn’t have to split it, throught out your working career, with the government and if you didn’t have to eat or support a family, it would only take you 120 years to save up $6,000,000.

    Assuming you started working @ age 12, it would mean you can comfortably retire when you’re 132 yr. old.

    Plan accordingly (for those without defined benefit plans)!

  9. Nice post Gold has risen for the tenth straight session to over $1,592 per ounce rallying over 7% in the last ten days. This rally matches a record set almost 40 years ago. Technical analysts are pointing to this strength as a reason they believe gold will go to over $1,700 per ounce by the end of the year.
    us gold coins

  10. More on Solyndra – The next move

    The plan put forward is a four-week sale of the company. The logic behind this very rapid schedule is that Solyndra is still burning cash at the rate of $1mm a week. How long will the $4mm DIP financing last? Four weeks. The terms of the DIP makes it a sure thing that Solyndra is going to be sold ASAP. That sounds good. But not for the DOE.

    The one-month period is a very short time frame. The likely result will be that no serious alternative buyer will appear. Should that happen, the senior creditor will get all of the assets of the company at the end of 30 days. That would be Argonaut. It's possible that Argonaut will end up owning a company that lists $850mm in assets for less than $100mm.

    The second item that pops out is the dual track marketing - where they will market Solyndra as a whole and as pieces. The affidavit talks about a 4 week marketing runway - that's crazy short even for a podunk company with 1/10th the size. No one can do Due Diligence in 4 weeks. It leaves the DIP lender in a great spot.

    In the next week the Court will rule on the proposal for a four week sale and the $4mm Argonaut DIP. If that plan is approved, what is left of Solyndra will go to Argonaut and the US DOE will suffer a loss of 100% of its $528mm loan.

  11. Boost Employment By Ending The Fed And Resurrecting Gold

    The foundation for a vibrant economy is faith in an honest market. Government is charged with protecting us from fraud and ensuring sound weights and measures. Money is the essential scale. It’s Washington’s primary economic purview. When it loses meaning and the Fed obfuscates the true cost of capital, the market’s foundation erodes.

    Compounding our difficulties, as the dollar slid over the past decade, our monetary masters simultaneously skewed another crucial benchmark. Interest rates reflect money’s price over time. As the Fed pushed real interest rates negative from 2003 into 2006, Americans plunged too much of our scarce capital into home construction and associated activities.

    The strongest rationale for a gold standard remains the protections it affords liberty. Yet, ending the Fed’s interest rate manipulation and forging the dollar back to gold would provide the surety capital seeks.

    When capital flows jobs will follow.

  12. makes you wonder...??

    The 9/11 Attacks and the Black Eagle Trust Fund

    The Vulcan’s drive to bring an end to the Cold War was fueled by a covert war chest invisible to congressional oversight. [32] This war chest would be known by several names: Black Eagle Trust, the Marcos gold, Yamashita’s Gold, the Golden Lily Treasure, the Durham Trust or Project Hammer. [33] The program also seems to have lined the pockets of the individuals that executed this policy. This was done to the tune of a staggering $240 billion dollars in covert and allegedly illegal bonds, which appear to have been replaced with Treasury notes backed by U.S. taxpayers in the aftermath of September 11.
    Reports vary, but documents in the public domain suggest the recovered treasure was in excess of 280,000 metric tonnes of gold, not including jewels and diamonds. [40] After the War [Lansdale] tortured Major Kojima Kashii – General Yamashita Tomoyuki’s driver – until he revealed and created a map of the gold sites. [41]

    Lansdale briefed Assistant Secretary of War John J. McCloy about the findings, and a U.S. Cabinet level decision was made to confiscate the gold and cover-up its discovery. The gold would be added to the Black Eagle Trust fund. It was McCloy, along with Secretary of the Navy Robert B. Anderson and Secretary of War Henry L. Stimson who created the Black Eagle Trust. [42]

  13. David Graeber about his book, Debt: The First 5000 Years.

    starts at 13 minutes..interesting conversation...
    debt/slavery/debt traps-failsafe=all debts cancelled-historically we are ass backwards.