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$253 Billion In Bills Redeemed MTD, $4 Trillion In Total Redemptions YTD, Treasury Down To $7 Billion in Cash

Tyler Durden's picture




 

And the government keeps on chugging along in its merry Keynesian way (and to those who believe that just because the USD is the reserve currency for the time being and have yet to hear about a country called China, we have one thing to say: just keep buying Treasuries). After burning through $91.1 billion in operating cash in the first 14 days of May, the government is down to just $7.2 billion in cash (ex the $200 billion in the untouchable, for now, SFP account). Not only that, but the little problem of ever increasing rolls in Bills just keeps on reminding about itself, although with $253 billion redeemed so far in May, we don't think little quite captures it. But once again, do not be concerned: the deflationists out there will say that this is all good as the government can just print infinite amounts of reserve pieces of paper (all the while deflation still paradoxically rages, with gold, oil and the Dow all rushing to hit 36,000 first). Back to facts: in the 7 months since the beginning of fiscal 2010, the US has redeemed $3.6 trillion bills, $400 billion notes, and $5 billion bonds. This 150% roll in sub 1 year debt when we are just 7 months into the fiscal year is also nothing to write home about, you may occasionally hear. But at least today's DTS still has not logged the $100 billion or so in yet unsettled debt (and the $120 billion in upcoming issues that will be announced tomorrow). When that happens we will solidly push right past $13 trillion in total debt subject to limit. This, is the last thing that you should not be concerned about. Because worry about unsustainability is merely an artifact of a simplistic Austrian school of economics, which as Greenspan and Bernanke have demonstrated so well, is nothing but a total joke to those sophisticated enough to grasp all the nuances of Keynesianism.

 

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Mon, 05/17/2010 - 17:12 | 357056 faustian bargain
faustian bargain's picture

Debt limits are so quaint.

Mon, 05/17/2010 - 19:05 | 357246 mikla
mikla's picture

+1

And, wait until people realize "debt limit" is really "debt subject to limit" (allowing us to go ever-higher), that we don't even need a vote to blow past the "debt subject to limit" (it's merely a polite non-binding formality), just like this year's Federal budget is a polite non-binding formality (which we've ALSO decided to not even bother to address with a vote this year).

This is going to be FUN.

Mon, 05/17/2010 - 17:22 | 357062 Ragnarok
Ragnarok's picture

Timmy and Ben must be action junkies.  I can just picture them around a roulette table in Vegas, in tuxedoes with bow ties undone letting the deed to America ride on "00".

Mon, 05/17/2010 - 17:16 | 357063 etrader
etrader's picture

They should dig out & dust of their 1975 hardback addition of Adam Fergusson's

When money dies: The nightmare of the Weimar collapse.

Mon, 05/17/2010 - 17:22 | 357073 Goods
Goods's picture

How do you know they aren't intentionally playing out that script? 

Mon, 05/17/2010 - 17:26 | 357076 hedgeless_horseman
hedgeless_horseman's picture

Or just look to Bloomie today:

German Households Are More Indebted Than Greeks: Chart of Day...

http://www.bloomberg.com/apps/news?pid=20601109&sid=awnKMEx2eVqE&pos=15

...and way to go Ireland!  If only debt was an Olympic event.

Mon, 05/17/2010 - 18:19 | 357181 Gwynplaine (not verified)
Gwynplaine's picture

That's an excellent book. I read it while the von Mises Institute still had it for free on their website.  They had to take it down at the request of the publisher.   It became too popular I guess.

Mon, 05/17/2010 - 17:16 | 357064 Mitchman
Mitchman's picture

Let's face it:  There just isn't that much to say.  It's like watching a slow motion video of a car wreck you know is going to happen.  It's not as if you can scream out at one of the drivers "Look out!" and make a difference.

Mon, 05/17/2010 - 17:31 | 357089 reading
reading's picture

It's actually like watching a slow motion replay of the same wreck over and over again.  Yet each time you still want to scream, but no one is listening.

 

Mon, 05/17/2010 - 17:35 | 357097 Apostate
Apostate's picture

Yup. It's coming time to start taking actions to prepare for the whirlwind. It's been happening for a while, of course, but it's now percolating throughout the wider society.

People who only watch television tend to have short historical memories. Anything that's not being mouthed by the pagan gods on the telescreen appears to be heresy.

Now the heretics are being proven right...

Depressions make generals. Hard times make for stronger men and women. We'll do fine... it's just a question of how to handle all the hopeless ones, the madmen, the killers, the drunks, the addicts, the displaced...

As long as the bastards don't start bombing people randomly, we can make it. If they kept restaurants open in Baghdad, we can keep them open here. We have the intellect, the values, the technology, and the time.

Depression for them. Prosperity for us.

Mon, 05/17/2010 - 17:50 | 357119 Noah Vail
Noah Vail's picture

I'm starting a guillotine manufacturing biz. I foresee soaring demand for these once useful machines.

Mon, 05/17/2010 - 22:03 | 357464 TexasAggie
TexasAggie's picture

That can be very bloody. It was reported that the scaffold was very slippery with blood.  Also, how many before the blade must be sharpened?  I thing a 0.75" to 1" dia hemp rope, stretched by several drops of 200 pounds, should be considered. The scaffold wouold 10 ft off of the ground, a trap door placed in the floor, and then since the door may open and to comply with OSHA, and to keep the guest from breaking their legs, the safety rope would be secured to their neck and wiht the appropriate drop, they will be dead in less than 1 minute, and 30 minutes later, the process can be repeated. low cost, re-useable material, and every 200 or so executions, replace the rope.

Mr. Pierrepoint, the famous English hangman family never had a recedivism case and no complaints.

Mon, 05/17/2010 - 17:53 | 357126 Ragnarok
Ragnarok's picture

+1

 

But just for piece of mind I would leave the really big cities with historically high unemployment and crime rates.  That values thing you mentioned.  Personally I like Montana and the mid-west, cold winters help keep things in perspective.

Mon, 05/17/2010 - 19:05 | 357247 ColonelCooper
ColonelCooper's picture

One thing about the midwest: If you can't get a check from the gubbiment, and you don't like hard work, it ain't the place for you.  FIREWOOD BITCHEZ!!

Mon, 05/17/2010 - 18:15 | 357170 cossack55
cossack55's picture

"how to handle all the hopeless ones...." Easy, just keep re-electing them.

Mon, 05/17/2010 - 19:00 | 357240 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

Between caliber, muzzle velocity and accuracy, you can usually sort out most issues...

Mon, 05/17/2010 - 18:05 | 357155 Rebel
Rebel's picture

It is like watching a drunk teenager driving 120 MPH down the wrong side of the interstate at night with no headlights in an ice storm, saying, haven't crashed yet.

Mon, 05/17/2010 - 22:43 | 357515 Cursive
Cursive's picture

LOL.  My state senator (Louisiana), Joe McPhearson did this, sans the ice storm, in the 80's on an unopened portion of I-49.  State police nabbed him, which saved his life considering that he was approaching an unfinished span.  Been re-elected ever since and will be term limited later this year.

Mon, 05/17/2010 - 17:19 | 357068 living on the edge
living on the edge's picture

I'm moving to Greece!!

Mon, 05/17/2010 - 17:20 | 357069 EscapeKey
EscapeKey's picture

Who cares? We all know that deficits don't matter.

Mon, 05/17/2010 - 17:25 | 357080 Apostate
Apostate's picture

Dr. James Galbraith... Junior... has it all under control. You can trust him. He works for the University of Texas. His daddy was just as brilliant as he is.

And he has a beard. And we all know that beards mean wisdom. 

Mon, 05/17/2010 - 17:49 | 357117 Troublehoff
Troublehoff's picture

rofl

he's a dick..

'japanese lost decade' in their dreams!

Mon, 05/17/2010 - 17:58 | 357136 Troublehoff
Troublehoff's picture

Bernanke has a beard too..

Thank god we have Bernanke to save the world. Imagine if that crazy Greenspan was still jacking the hell out of the currency

..oh wait

Mon, 05/17/2010 - 18:38 | 357133 etrader
etrader's picture

"deficits don't matter."

Seems they're trying their best to go down the G.F Knapp chartalist school of thought.:eek:

Mon, 05/17/2010 - 17:26 | 357083 neophyte
neophyte's picture

Of course they don't matter (defecits).After all these are merely "byte to byte" transactions. The computers have been programmed to not have "circuit breakers". Heck one day they too will collpase due the weight of the endless 0000000's.

Mon, 05/17/2010 - 17:27 | 357085 buzzsaw99
buzzsaw99's picture

...just keep buying Treasuries).

http://www.youtube.com/watch?v=ORT5jdkK0u0

Well, that's what we was a figurin' on doin'!

 

 

Mon, 05/17/2010 - 17:28 | 357086 lucky 81
lucky 81's picture

i came to this site looking for porn and all i hear is negativity.

Mon, 05/17/2010 - 17:48 | 357115 Landrew
Landrew's picture

Reality is neither negative or positive my friend and that is what you get on this site like no other, REALITY! Profit is made from either side of the argument and in some cases using straddles both!

Mon, 05/17/2010 - 18:05 | 357153 Catullus
Catullus's picture

http://www.sec.gov/

You're welcome.

Mon, 05/17/2010 - 17:39 | 357088 Caviar Emptor
Caviar Emptor's picture

BazOOOOooKAAA!

The more they try to fix it, the more broke it gets! Like a machine with rusted bolts and stripped screws.

The Paulson "globally coordinated" Bazooka is still reverberating through the global economy. It had the effect of only temporizing the overall deflationary inevitability of a burst 30-year asset bubble of gargantuan proportions. But it also had an inflationary effect on energy and raw materials. Misallocations are the inevitable consequence of blindly flushing money into markets without letting market forces determine the allocation. 

So we have a financial sector that's still booming (though the engine is just starting to sputter) while the rest of the economy is in the tank. The TBTF's are still alive, quacking like lame ducks all the way to the grave and sucking huge resources as they go. Resources that might have been deployed usefully elsewhere. 

Their thinking is simple. Next time, use a Bazooka armed with a nuke! I think we get stimulus 2.0 by the end of the year, and QE 2.0 whenever the opportunity arises

Mon, 05/17/2010 - 17:32 | 357092 AR15AU
AR15AU's picture

So AAPL, KO, GOOG, MSFT, IBM, GE, and WMT all have more cash on hand than the UST right now?  LOL

 

Mon, 05/17/2010 - 17:59 | 357138 snowball777
snowball777's picture

An easily correctable situation...

Mon, 05/17/2010 - 17:33 | 357093 Common_Cents22
Common_Cents22's picture

Tim and Ben believe in fat finger finance.  Just add a couple zeros on the debt limit.

Mon, 05/17/2010 - 17:36 | 357100 EscapeKey
EscapeKey's picture

This guy taught Timmy and Ben all they know about maths

http://www.youtube.com/watch?v=yHZzObQUgE8

Mon, 05/17/2010 - 17:39 | 357104 neophyte
neophyte's picture

+1000. Awesome. Wish I had learned my math this way!!

Mon, 05/17/2010 - 17:53 | 357127 Cognitive Dissonance
Cognitive Dissonance's picture

LOL

Well I'm convinced. Who wants to buy my physical Gold? I just found out 7 X 13 = 28

Mon, 05/17/2010 - 21:31 | 357422 LeBalance
LeBalance's picture

The smarter person is always convinced by the idiot to take a back seat as the idiot is threatened by the smart person and in turn threatens the smart person who would never resort to the violence of the idiot as it is beneath their level of conduct.  Or at least that's what the smart person has been taught in the "school of manners."  Now in the school of "idiots and psychopaths are running the show as smart people are asleep" what is to be done?

Mon, 05/17/2010 - 17:35 | 357098 neophyte
neophyte's picture

Perhaps this is a reminder of where we are headed. If you had this note in 1914 you would be very very wealthy.

http://www.screencast.com/users/neophyte/folders/Jing/media/429d6f34-dad...

Mon, 05/17/2010 - 17:47 | 357113 alexander-delarge
alexander-delarge's picture

Can someone please answer my rookie question ? here goes = why isn't the govt issuing longer dated treasuries to try and capture low(er) rates for a longer period of time ? Is it b/c no one, no lender will buy this paper if it's too far dated ? Or at least not w/o being paid more for it ?

I have another, please; what's the 'need' from european central banks for US $'s via the Fed swaps ? What investments or transactions are they servicing that requires US$'s ?

Many thanks in advance !

Mon, 05/17/2010 - 17:50 | 357121 Nolsgrad
Nolsgrad's picture

would you lend to someone for 20years at 4% knowing inflation was going to be >10% between here and maturity? Nope.

Mon, 05/17/2010 - 17:51 | 357123 Landrew
Landrew's picture

Considering the mortgage/auto etc. loan market uses the ten/twenty year monies UST would crush the consumer loan market like a black hole.

Mon, 05/17/2010 - 17:51 | 357124 EscapeKey
EscapeKey's picture

Because it's cheaper to issue shorter term paper, which carry lower interest rates.

One of the way Clinton "fixed" the budget was to shorten the average maturity term.

Mon, 05/17/2010 - 18:27 | 357193 Sespian
Sespian's picture

I don't call that a fix, I call it a band-aid.

Unless you're using it in terms of "the fix is in."  Then I agree.

Tue, 05/18/2010 - 01:22 | 357643 EscapeKey
EscapeKey's picture

I agree. Hence the quotation marks.

Wed, 05/19/2010 - 13:16 | 361069 Sespian
Sespian's picture

Sorry, didn't take my vitamin B-12 before that reply and was a little grumpy.

Mon, 05/17/2010 - 18:16 | 357172 Hansel
Hansel's picture

I don't think this will be a completely satisfying answer to your second question, but the ECB can only reduce the euro money supply to strengthen the euro.  With the fx swaps, the Fed becomes a buyer of euros, thus strengthening the euro vs. the dollar without the ECB having to contract liquidity.  Central banks can't print money to defend their own currencies.

If your looking for a more fundamental reason why the ECB 'needs' dollars, you'll need to look at their counterparties and the ultimate goals of central banks.

Mon, 05/17/2010 - 17:48 | 357114 SilverIsKing
SilverIsKing's picture

Does anyone have a view they can share on what they anticipate the sequence of events will be when the SHTF, i.e. failed bond auction, bank holiday, etc etc.

Everyone talks about all hell breaking loose and I've scared enough people with stories of the horrors that will ensue and for which they should be prepared but I haven't heard much from anyone regarding the specific events that might take place.

I know it's all just theoretical.

 

Mon, 05/17/2010 - 18:05 | 357150 Apostate
Apostate's picture

React to the data as it comes in. Have a flashlight, some emergency food, and access to clean water.

Be in good physical shape (this is the most important one).

Be prepared to leave behind the old, the sick, and the deluded.

Never gawk at explosions or gunshots. Stay the hell away from combat. 

Mon, 05/17/2010 - 17:51 | 357122 RobotTrader
RobotTrader's picture

Anytime they need to float bonds, all they have to do is engineer a "Flash Crash" and commodity and stock prices collapse.

Ergo, bond prices rocket and new debt is floated off with ease.

What's the worry???

Mon, 05/17/2010 - 17:53 | 357128 Landrew
Landrew's picture

What me worry ha! Let me ask how many times can UST go to the well? That is the TRILLION dollar question don't you think?

Mon, 05/17/2010 - 17:58 | 357125 plocequ1
plocequ1's picture

Wow, Thats alot of money. Will this unfortunate situation prolong the delivery date of my Ipad? I've been waiting three weeks fucking now.

Mon, 05/17/2010 - 18:01 | 357141 snowball777
snowball777's picture

You must be very chafed by now.

Mon, 05/17/2010 - 18:00 | 357140 MacedonianGlory
MacedonianGlory's picture

Greece x 1000000000 = USA

 

 

Mon, 05/17/2010 - 18:03 | 357144 snowball777
snowball777's picture

So, if the TBTF5 are in cahoots with Herr Helicopter on the monetization train, how are we supposed to experience a 'failed auction'? Won't our Euro-slinging friends chip in for the annual pledge drive as well?

 

Just askin'...

Mon, 05/17/2010 - 18:04 | 357149 Arm
Arm's picture

As has been stated before in this forum.  Inflation and deflation are mutually compatible.  This is because the money being "printed" does not flow evenly and simultaneously into the economy at the same time.  In a fiat system primary issuance is received directly by financial institutions.  These institutions are supposed to lend it out and spread (and multiply) it throughout the productive economy.  Unfortunately, there is a solvency issue and banks don't lend to insolvent individuals.  This means the money is staying with the bank and with a few select clients deemed credit-worthy.  Meanwhile insolvent clients continue to default, and the solvent ones continue to pay their debt, while no new loans come out.  This is DEEPLY deflationary.

However, the banks have to do something with this money.  They turn around and speculate it bidding up asset prices.  They buy oil, junk bonds, stocks, etc.  This makes sense because banks believe that they can trade these assets at more profitable levels and with more safety than loaning to small firms (they assume erroneously they can unwind their trades quickly even if a sudden crash comes along). This new casino is inflationary.

Which process will eventually dominate?  The deeply deflationary delevering process or the inflationary printing press? 

My answer is that long-term we will have raging deflation, followed by a failed currency (much like Argentina).   Why?  Because bank lending accounts for 95% of money supply!!  For starters, to counter a 30% reduction in bank lending, the government would have to increase US government debt 6x.  Remember debt would be up 6x just to keep money supply unchanged.  However, remember these 90 trillion would be mostly in bank balance sheets ready for speculation (and there is little you can do about it unless you nationalize the banks).  In this scenario, primary asset price inflation would be in the triple digits, but the real economy would not have benefited and would not be able to pass on inflation costs, eg. most average firms would go broke. 

In other words, countries cannot monetize ad-infinitum or pretty soon the economy dies.  They tried it in Japan, and they had to stop.  A very similar path of short inlationary bursts followed by prolonged deflation is the more likely scenario

Mon, 05/17/2010 - 18:10 | 357163 Apostate
Apostate's picture

Very well written.

This is a tough process for non-ibankers to visualize. Even modern-day ibankers, with their giant institutions and over-specialization, have trouble figuring this out.

If you're the friend or family member of a hedge fund manager, you'll  have no pressing need for cash. If you're in some kind of industry that services their needs, you'll do well (i.e. "girlfriend experience" hooker, pseudo-artist, high-end lawyer).

It doesn't pay to have a real job anymore, that's for certain. Apparently now, it's all the rage for the little kids to make and re-make ridiculous little applications, hand it off to a half-dolt VC, and then go for an acquisition from a company that could create similar features all fucking day for a fraction of the cost.

Riiiiight.

Mon, 05/17/2010 - 18:31 | 357205 snowball777
snowball777's picture

Are the banks immune to the toxicity on their mark-to-myth books?

Do losses on defaults from junk bonds not affect them at all?

Does the purchase of said bonds and stock appreciation not imply at least some new hiring? I'll grant you the trickled used-champagne rolls downhill, but some of it must hit Main St if the supply-siders haven't been lying through their teeth all along.

Does none of the monetized debt get into aggregate demand through the grubby mitts of the plebescite?

Would Ben's helicopters even out the flow?

Did Japan have a 'lost decade' because of math? Or because of the cultural tendency towards saving of their populace that is sorely lacking here in the states?

Please forgive my ignorance in these macro matters, I am but a humble software engineer and a neophyte in this realm seeking an answer for the eternal quandary as to what I should do with the FRN I've moved out of equities into MMs and a smattering of inedible assets.

I appreciated your post very much, BTW...the goldbugs should read it carefully.

Mon, 05/17/2010 - 19:33 | 357280 murray
murray's picture

The banks are immune as long as they are allowed to mark-to-myth.  The health of the big TBTF skanks err banks is entirely based, I think, on the politics.. and the tide seems to be turning from support for to attacks on these institutions.  On the other side, of course, is the ever present flow of free dollers from the Fed.  Much of this money will be pocketed in bonuses by future residents of hell.

 

So the question on the banks is: do you believe government support for these institutions will continue unabated?  Interestingly, many investors whose past records seem very intelligent (John Paulson) are heavily invested in the big skanks.

 

The huge amount of debt and government spending has had two concrete effects: 1) A lower doller value (though this is unwinding recently) and 2) more money for those who receive it.  This combined with the increasing trend of people stopping mortgage payments and the "feel" of greater wealth that comes from "recovered" (in nominal value) 401Ks has created a temporary increase in consumption, which we all know drives the USSA's "economy." 

 

The problem is that there no longer exists room on the average U.S. citizen's balance sheet for sustained expansion in debt, which is what has driven the last 30-80 years of "growth."

 

In regards to your asset selection, buy high quality, undervalued energy, agriculture, water and precious metals assets.

 

Also be sure to be prepared for worldwide government bankruptcy by owning a share of significant local (accessible) assets in food, water, energy and precious metals in an area far away from the government-reliant masses.

 

Best wishes to us all

Mon, 05/17/2010 - 21:52 | 357451 LeBalance
LeBalance's picture

There are two completely seperate processes: One has to do with money supply, it is either being inflated or deflated.  Right now it is being unbelievably inflated.  This is the only time the word :: inflation or the word :: deflation should be used as they are cruely used to misinform.  This money supply will go to work somewhere and in the case of money from nowhere (fiat) it mostly goes to work in poorly allocated places, called malinvestments.  This results in bubbles which burst when the nonsense of the allocation is realised.

After passing through the market system and finding its way into the consciousness of the retailer (a process that takes 36 months [low velocity change]) money inflation might result in an increase in price as more money supply is chasing the same goods.  In a high velocity environment (1923 Weimar Germany) this time to price increase as a *result* of monetary supply inflation is shortened.  In full-out hyperinflation supply increases are mirrored by good's price increase.  THIS creates the misunderstanding that SUPPLY inflation and PRICE increase are the same thing. ***They are not.***

Mon, 05/17/2010 - 18:06 | 357156 Caviar Emptor
Caviar Emptor's picture

String of tech downgrades this morning: BRCM, NETL, POWI, VLTR. CAVM, TIVO. It begins.

Mon, 05/17/2010 - 18:06 | 357157 mock turtle
mock turtle's picture

tyler

im with ya every step of the way until you attribute the our problems to keynesianism

what we have done is build a car with an accelerator and no brakes

jmk never said stimulate every day, frequently and often...he preached counter cyclical policy

and these b tards at the fed... and others have violated this and several austrian school principles all at once

Mon, 05/17/2010 - 21:37 | 357426 Iam_Silverman
Iam_Silverman's picture

"what we have done is build a car with an accelerator and no brakes"

Well, this seemed to work pretty well for Toyota!  And to think that there are several company's out there emulating their[Toyota's] "Lean" approach to running a business.

Mon, 05/17/2010 - 18:09 | 357161 plocequ1
plocequ1's picture

Seriously, This will continue until it can't continue. Math dosent lie.

Mon, 05/17/2010 - 18:19 | 357177 johngaltfla
johngaltfla's picture

The fun thing is that we are operating in an era of "new math" where assets are what one feels like, not what they are really worth.

 

Party on Wayne, Party on Garth.

Mon, 05/17/2010 - 19:11 | 357255 Dirt Rat
Dirt Rat's picture

Sometimes called "behavioral economics," I think. It's a favorite of Obama and crew. Reality is whatever they say it is.

Mon, 05/17/2010 - 18:35 | 357206 Caviar Emptor
Caviar Emptor's picture

I don't foresee a failed auction or bank holiday or such in the near term.

I see instead continuation and expansion of the Fed debt cycle and expansion on the fiscal side as well. With the attendant consequences. Here's why. 

The political and psychological precedents are overwhelmingly in favor of marching right over the cliff. Bush, Ben and Paulson all said they did not want to be remembered "as having presided over the next Great Depression" (close to verbatim). This is how all elected officials think, and HAVE TO think given our political realities. Simply put, they would not get re-elected, or worse they might be lynched for not providing the junkie with his smack.  There is no way that real "austerity" can be imposed without the threat of a national calamity caused by a deflationary spiral with massive unemployment.

Which brings up a flaw I've uncovered (and blogged about in the past) in our system of checks and balances in government. The framers of the Constitution did not conceive of a world of paper, with a purely fiat national currency not backed by a limited commodity such as gold. That did not exist at the time in the civilized world and was rightly feared. Fearing concentration of power they also did not conceive of a Central Bank. So they never devised a system of monetary checks and balances. Even the theoretical checks on fiscal policy have failed to have an impact as the debt ceiling keeps getting raised. Each successive administration leaves behind a growing debt out of political expediency. Many presidents got elected by promising what was in essence expansion of the debt (through unfunded "tax cuts" and programs). There is no mechanism in place to control this imbalance.

Tue, 05/18/2010 - 00:50 | 357634 hedgeless_horseman
hedgeless_horseman's picture

I had not thought of this flaw, or read abot it elsewhere.  Thank you for sharing.

Mon, 05/17/2010 - 19:08 | 357251 rlouis
rlouis's picture

Mises wrote in 'Human Action'

"What is called today financial war preparedness is merely the ability to procure by means of privileged and government controlled banks all the money a warring nation may need.  Radical inflationism, although not admitted explicitly, is an essential feature of the economic ideology of our age."  pg 439

Mon, 05/17/2010 - 19:25 | 357272 JW n FL
JW n FL's picture

SDR Valuation as of May 17, 2010
Disclaimer: The International Monetary Fund makes no warranties, express or implied, regarding these tables or the performance of this site. The Fund shall not be liable for any losses or damages incurred in connection with this site.
http://www.imf.org/external/np/fin/data/rms_sdrv.aspx?Month=05&Day=17&Year=2010&submit=Submit

Mon, 05/17/2010 - 19:41 | 357292 jkruffin
jkruffin's picture

Well, there is a simple and easy way for every country involved to end the madness quickly and painlessly.  But it will never happen, because of greed. Especially, that of the Wall St. bankers.

 

Cancel all debts worldwide, reset all FICO scores, and bam its no longer a problem for anyone.  At least until they go back and repeat history, which you would hope stricter rules would be in place to prevent it from ever re-occuring.  Economic boom across the globe, people back to work and off unemployment, etc. etc..

 

We had a chance to end it all when Obama was elected, yet they chose to give the money to the bankers instead of the people.  Now the pain is going to be felt, unless they do what I just stated above.

Mon, 05/17/2010 - 21:49 | 357447 Iam_Silverman
Iam_Silverman's picture

"Cancel all debts worldwide, reset all FICO scores, and bam its no longer a problem for anyone."

Can I have at least a months notice before they schedule the debt Jubilee?  I want to run out and buy stuff....Lots of stuff.

Really, if you were debt free (I am), or held a note and expected someone to repay their debt to you - I doubt very seriously you'd feel this way.  I worked hard, saved all of my life, lived at or below my means and have very ample savings.  Screw the deadbeats who don't want to pay their debts!  Repossess or foreclose on them and I will buy the distressed collateral at a reduced price.  I am tired of all of this talk of "debt forgiveness".  If you signed your name to a contract - promising to repay this debt, then you should repay (or die trying).  If you think that you can just walk away from your promises, then you should be stripped of your name (since it is obviously worthless), thrown out on the street and be known only as "Deadbeat".

OK, rant off.  It just annoys the heck out of me when I hear people whining about needing to cancel all debts.

Mon, 05/17/2010 - 23:37 | 357591 Magat Guru
Magat Guru's picture

 

So you're Debt Free -- whoop de fricken doo for you.

Unfortunately you're potentially out voted, what, 40- or 50- to one if the question should come up in a democratic fashion (a stretch, admittedly).

In claiming to be "debt-free" you also try to restrict the discussion to "things I signed up for" to the exclusion of things you may have blithely taken for granted up to now, i.e. U.S. citizenship, membership in the human race, etc. Sure you don't owe a nickel to that brain-damaged 1-limbed veteran shaking his cup in your face, even though he put his life on the line for his belief (deferring argument over factual basis for said belief) in a better world that happens to include you. Never mind the USMil screwed him out of his disability, his wife signed a payday loan to get some groceries while he was in Iraq, and now has to turn trix just to keep the car from getting repo'd. But screw 'em I got mine, right?

All that dreary moralizing aside, what about harm reduction?

Better I say to help your neighbor put out his house fire before it spreads to your house, as opposed to "serves him right for smoking in bed. Let 'er burn."

Better I say to fund needle exchanges and AIDS treatment and hope it saves some first responder from getting infected and passing the infection on, rather than "let 'em rot, they brought it on themselves."

So tell me, would you prefer your next door neighbor to feel like the American system works for him and allows him to hit the RESET if he got in over his head, or to feel that he's got nothing to lose, and might prefer eating your dog to starving? Sure you got a bullet for him, but what of the next 100 neighbors in his situation? 

 

This "I got mine, screw you" mentality is problematic as soon as you, Mammon forbid, find yourself needing a little kindness from a stranger.

 

 

Tue, 05/18/2010 - 05:38 | 357723 Iam_Silverman
Iam_Silverman's picture

"In claiming to be "debt-free" you also try to restrict the discussion to "things I signed up for" to the exclusion of things you may have blithely taken for granted up to now, i.e. U.S. citizenship, membership in the human race, etc. Sure you don't owe a nickel to that brain-damaged 1-limbed veteran shaking his cup in your face, even though he put his life on the line for his belief (deferring argument over factual basis for said belief) in a better world that happens to include you. "

Aside from your socialist diatribe, I take exception to the fact that you don't even know me and assume that I don't extend charity - and especially to a brother veteran.  Yes, I served my country for six years, my brother continues to serve, and all of my uncles, father, step father have honorably served MY country, so that you can come up with needle exchanges and other enabling programs.  And as far as the VA screwing him out of his benefits - I declined my partial disability check when I was Honorably Discharged in 1986 - I figured the money would be better served funding the hospital two of my Korean War disabled uncles regularly used.

If my neighbors house catches on fire due to them smoking in bed, I have more than enough acreage bewteen us to protect myself, but I am also a trained first-responder and member of the fire brigade at the power plant where I make my living (to pay my debts!).

When you say that I should feel compassion for someone who had gotten in over their heads, my reply is don't jump in the pool if you can't swim and it is marked as being 8 feet deep.  I know too many people to treat credit as a right, instead of something that must be earned and then promptly repaid!  Live within your means - not your dreams.

As for the other 100 that would try to storm my property to find something to eat (lets say they want my cattle instead of my dog), yep, I have got wayyyy more than 100 bullets for them too.  Stealing is still WRONG.  Ask, I have been known to donate calves for the local food bank.  Steal and you will most likely end up buried in a muddy draw.

Tue, 05/18/2010 - 00:51 | 357635 hedgeless_horseman
hedgeless_horseman's picture

This is your notice of at least a month.  Happy shopping.

Tue, 05/18/2010 - 05:41 | 357727 Iam_Silverman
Iam_Silverman's picture

Woo Hoo!

How long does it take to get a credit card?  Or, do stores still chase you down while you are shopping trying to get you to apply for their plastic?

I could get a boat, airplane, vacation house, bigggg screen TV's - you know, all the stuff I deserve because I am an American!

Tue, 05/18/2010 - 08:17 | 357792 snowball777
snowball777's picture

Or food, or shoes for your kid, or cancer meds.

 

Tue, 05/18/2010 - 19:28 | 359366 Iam_Silverman
Iam_Silverman's picture

Nope, gub'ment assistance buys all dat stuff.  Dat's just stuff I need, I's going to buy the stuff I deee-serve!

(forgot in my original post - :/Sarcasm; S-off, end)

Tue, 05/18/2010 - 11:45 | 358205 jkruffin
jkruffin's picture

I'm not saying it is what I want(though I would not complain at all), I am only saying that is the only way at this point, to solve the problem worldwide.  Why is it when a consumer doesn't pay they become deadbeats?  But when bankers, businesses, etc... cannot pay its a business decision?  Please explain your logic? Because, it seems to me you care nothing but for yourself adn screw anyone else around you.  Some people who are in this mess are victims of the problems created by business and government, not because they didn't save.  They have spent those savings when they lost their jobs and they never returned. Not all, but many. Yes, we all know there are deadbeats(if thats what you like to call them) out there, but its a small fraction compared to those who do the right thing or have at least put forth their best efforts. If anyone is whining, it seems to me that it's you.

Tue, 05/18/2010 - 04:07 | 357701 Grand Supercycle
Grand Supercycle's picture

 

EURUSD / EURJPY continues to show buying support on intra day chart.

EURGBP daily chart gives mild bullish warnings.

http://stockmarket618.wordpress.com

http://www.zerohedge.com/forum/latest-market-outlook-1

Tue, 05/18/2010 - 05:21 | 357721 Johnny Moscow
Johnny Moscow's picture

To Magat Guru.

This guy plays by the rules, saves, doesn't overspend himself into oblivion, follows the government mandated rules and regulations and somehow he's the selfish bad guy in your world?

Huh???

RE Things he "blithely signed up for" let's include a gazillion taxes, paying for an incredible amount of "benefits" and forking over a lot to government entitlement programs that are either unsustainable or unnecessary. And supporting the mainstream societal rules which are clearly not working now.

I also saved, didn't overborrow and paid my taxes and was a good citizen and for what? So I can pay more and more, give and give to an overbloated bureaucracy. And now I have to bail out those who acted like complete idiots?

Look, I don't mind sharing the pain...I already am. And I'm all for banks trying to work something out with their borrowers and not simply foreclosing and shutting them off. I believe they are doing this - all while the FMA continues to promote stupid loans. But to say those that acted responsibly, saved and didn't live beyond their means is irresponsible. If everyone acted in this way we would not be in the situation we currently are.

And by the way my brother serves in the military, as did all my grandfathers and uncles. Yeah, I'm appreciative, but given what the idiots in Congress have done over the last few decades, we're in a different world now,

And oh by the way I can GUARANTEE you pretty much that about 1/2 the current native population and just about every new US citizen or illegal could given two sh*ts about what people fought or are fighting for now, or veterans for that matter. So if you're looking for loyalty from such a diverse, consumerist society that we now have in the US, I think it's going to be harder and harder to find.

 

 

 

Tue, 05/18/2010 - 05:45 | 357730 Iam_Silverman
Iam_Silverman's picture

Amen.

Tell all of the service men in your family that I said Thanks.  They'll know what for.

I show cattle, and before each show (since I volunteer to announce) I also pay tribute to our servicemen.  I lead a riderless steer in the arena while it carries the POW/MIA flag.  I get an overwhelming repsonse from that.  I tell them that I am just repaying a debt.  <- something apparently some have no concept about.

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