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Does Koo's Statement That "Sustaining Fiscal Stimulus In Democracy During Peacetime Is Difficult" Mean War Is Coming?

Tyler Durden's picture


With the recent surge in geopolitical volatility (which nobody could have foreseen of course), it is easy to forget that the US economy is still deep in the abyss of a transfer process that sees trillions in capital needed to be funded by the government and plug holes in the private sector. This is not news and anyone who has followed Richard Koo over the past two years is fully aware of this: all of this is fully recreated in his latest presentation reproduced below. What is interesting is the addition of exhibit 23, which notes something very important: namely reality. Koo observes, very keenly, that "sustaining fiscal stimulus in democracy during peacetime is difficult" (of course, in authoritarian regimes nobody cares about stimulus until inflation surges to the point where the bulk of the population, which knows it has no other recourse, sees no other option than to revolt). Which leads to the question: so what? If fiscal stimulus is difficult (and virtually impossible after trillions have already been spent with little/no effect) in peacetime, does this mean that democracies are forced to turn to war as the only possible recourse (it worked with the Great Depression)? Or, alternatively, continue relying on the Fed for monetary stimulus, which however as we have all too vividly seen, is the bluntest instrument available, and tends to lead to the very same regime destabilizing revolutions that one may say are pursued by the abovementioned "democracies." The natural outcome is that instead of building up resentment against the political system, the population personifies the chairman of the Federal Reserve with the Devil, thereby deflecting anger from an impotent cadre of politicos. Yet regardless of the nuances, the bottom line is that without continued trillions of debt-funded injections in some form, the economy stagnates, and becomes another Japan case study.

Koo's prophetic exhibit:

Latest always informative Richard Koo presentation:



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Mon, 02/21/2011 - 16:33 | 982649 Motorhead
Motorhead's picture

Silver, bitchez!

Mon, 02/21/2011 - 17:14 | 982795 Thomas
Thomas's picture

Errata: Richard Coup.

Mon, 02/21/2011 - 16:36 | 982663 snowball777
snowball777's picture

Beating those plowshares into swords, are we?

Mon, 02/21/2011 - 16:52 | 982729 tmosley
tmosley's picture

Well, that is what you do once you have been conquered and enslaved.

Mon, 02/21/2011 - 16:36 | 982665 Bob
Bob's picture

Abrams M1A2's rolling up Wall Steet, bitchez!

Mon, 02/21/2011 - 16:37 | 982666 TooBearish
TooBearish's picture

Bens gotta engineer a run into the greenback quick to knock down these commds and quick cause earl is primed to rocket, reckon might pull the bid in the spoos

Mon, 02/21/2011 - 16:37 | 982668 tony bonn
tony bonn's picture

"Does Koo's Statement That "Sustaining Fiscal Stimulus In Democracy During Peacetime Is Difficult" Mean War Is Coming?"

that is precisely what those words mean. there are so many assholes in the pentagon and cia who believe that war is a remedy for depression that they are actively pursuing war...of course they have been doing that since 9/11/2001....the bush crime syndicate still runs dirty tricks for the plutocrats - fuck you david rockefeller....

Mon, 02/21/2011 - 16:51 | 982721 Michael
Michael's picture

Oh please lets start our 3rd war soon. I need to see the quickening of US Bankruptcy II.

Mon, 02/21/2011 - 16:57 | 982745 topcallingtroll
topcallingtroll's picture

I hope you are kidding because you sound young enough to be drafted.

Mon, 02/21/2011 - 17:14 | 982790 Michael
Michael's picture

A 3rd war for the US would mean an immediate crash in the treasury market. What part of broke don't people understand? Lets get this bankruptcy party started.

Mon, 02/21/2011 - 17:13 | 982789 Confused
Confused's picture

All kidding aside, no one really wants war now, do they? Bankruptcy would be devastating enough for some, but in this day and age war will be much worse. 

Mon, 02/21/2011 - 17:57 | 982981 CH1
CH1's picture

Consider this scenario:

Start a proxy-ish war with China, in some out of the way corner. Then as soon as some dead American boys show up on the news, we declare all debts with the evil Chinese government null and void.

Poof! A whole lot of the problem vanishes with a pen stroke!

War: Serving liars and killing sheep for 6,000 years. A long and glorious tradition.

Mon, 02/21/2011 - 19:11 | 983195 SilverRhino
SilverRhino's picture

And the Chinese immediately retaliate by offering a gold backed currency and nationalize every western company in operation over there. 

Mon, 02/21/2011 - 20:53 | 983598 RKDS
RKDS's picture

Good.  Fuck the globalists.

Tue, 02/22/2011 - 00:55 | 984344 Mikey3211
Mikey3211's picture

Problem with that plan is that the Chinese know this is coming. You can't start a war on your own.

The Chinese have studied very carefully how the USA beat the USSR - though forcing the USSR to 'keep up' with the apparent spending of the USA, however the USSR didn't have the economic strength and innovation to keep up due to its own massive, overbearing beaurocracy, and decades long stifling of innovation through supression of intellectual freedoms. Political freedom of thought is not that different from any other freedom of thought after all.The USA exploited weaknesses of the (predominately) Russian mentality where their people crave highly authoritarian power structures. Russia was literally a Feudal government until 1914 after all.

Now the Chinese are doing similar tricks to the USA. Out competing economically while encouraging innovation. The Chinese are still trying to control political freedom of thought while opening up intellectual freedom of thought. It seems to be working. China is exploiting the USA's weakness where it gives in to the worship of 'Money' in a Scrooge McDuck kind of way.

China knows what is going on, and they've been watching it and probably encouraging it, as well as snarfing up every bit of gold, precious metals, and strategic goods (food multinationals, resources, manufacturing) as possible.

Tue, 02/22/2011 - 01:14 | 984380 prophet_banker
prophet_banker's picture

communism would have failed with out any help from the west; that's socialism's end result.  I think the concept of war saving economies is the greatest lie of history, war saves for the profit of the owners, and saves nothing for the rest of us.

Tue, 02/22/2011 - 07:43 | 984600 fx
fx's picture

In the very moment China will likely drop its entire Treasury bonds holdings - and will telegraphe the move for everybody else to run for the exit door asap. All those $$ printed by the fed will suddenly buy a lot less oil, metals, etc. And prices in the US will skyrocket one all these cheap chinese garbage disappears. I'd guess the guy sitting in the white house at that time will have a hard job rallying the people behind him

Mon, 02/21/2011 - 16:51 | 982722 Ragnarok
Ragnarok's picture

War is Peace.  Re-read that chapter last night, Orwell was on to something.

Mon, 02/21/2011 - 17:00 | 982749 topcallingtroll
topcallingtroll's picture

I will second that fuck you. Whe need to track down all the rockefellers.

Mon, 02/21/2011 - 19:12 | 983200 SilverRhino
SilverRhino's picture

They're the ones busy giving rimjobs to the Rothschilds.  

Mon, 02/21/2011 - 19:12 | 983201 zaknick
zaknick's picture

Man, you're finally making some sense. It's not anti-Americanism but anti-fascism.

Mon, 02/21/2011 - 16:38 | 982669 Misean
Misean's picture

First, we get the underwear....step2???...step 3 PROFIT!

Damned cartoons have it right, again.

Mon, 02/21/2011 - 16:39 | 982670 Pladizow
Pladizow's picture

Celente and Faber have been well documented saying Washington will turn to War.

Mon, 02/21/2011 - 18:12 | 983033 hardcleareye
hardcleareye's picture

They have been calling for a complete collapse since 2009.  Are you saying that C&F have been well documented to have "SAID" or that C&F "HAVE" documentation that Washington will turn to War?  If so can you share a link to that documentation I would like to "explore" that line of thought...


Mon, 02/21/2011 - 19:51 | 983380 Raymond K Hessel
Raymond K Hessel's picture

It's in English. They're on the record for saying Washington will turn to war.  Does Cass sign your paycheck personally or does he PayPal it to you?

Mon, 02/21/2011 - 16:40 | 982674 NOTW777
NOTW777's picture

put Exhibit 2 on the front page of every newspaper and internet news page

Mon, 02/21/2011 - 16:40 | 982682 Jack
Jack's picture

I reject Koo's premise.


Maintaining stimulus is extremely easy peacetime or wartime, boom or bust.  Withdrawing the stimulus is the hard part.  

Once you are obviously going bankrupt from constantly pouring temporary stimulus into the economy, that's when you start reaching the difficulties we see now.

Mon, 02/21/2011 - 17:06 | 982765 topcallingtroll
topcallingtroll's picture

My thesis too. If true, it means china suffers more because they are further along the malinvestment cycle than we are.

Mon, 02/21/2011 - 16:43 | 982691 digitlman
digitlman's picture

So, what the fuck to Iraq and Afghanistan count as?  Haven't we been at war, technically, for a few years already?

Mon, 02/21/2011 - 16:48 | 982708 Misean
Misean's picture

Noo, silly, those aren't wars. Those are democracy spreading actions. Our imperial storm troopers have flowers thrown at there feet by the locals for all the freedom they spread around.

The Pentagram and other delusional statist and keynsian ebbublegnomist only see war when an entire ebbublemy is turned into a vast military camp, and millions on all sides die.

Mon, 02/21/2011 - 16:52 | 982719 aheady
aheady's picture

I reject your reality and substitute my own.

Mon, 02/21/2011 - 16:56 | 982738 topcallingtroll
topcallingtroll's picture


Mon, 02/21/2011 - 16:57 | 982743 Misean
Misean's picture

The Pentagram always prefers a big boom!

Mon, 02/21/2011 - 17:01 | 982753 tmosley
tmosley's picture

Ah, Mythbusters quote.  I loved the early years.  Sadly, they seem to have run out of myths...

Mon, 02/21/2011 - 17:04 | 982761 aheady
aheady's picture

They could audit the Fed?

Mon, 02/21/2011 - 17:24 | 982848 Misean
Misean's picture



That is friggin' sweet!

And test the myth of gold in Fort Knox as well.

Mon, 02/21/2011 - 17:41 | 982928 aheady
aheady's picture

Even better!

Mon, 02/21/2011 - 17:54 | 982972 Yen Cross
Yen Cross's picture  As of December 2010. No need to bust any myths.

Mon, 02/21/2011 - 18:50 | 983139 penisouraus erecti
penisouraus erecti's picture

Oddly enough, the one guy that has been pushing that they are now trying to paint as a 'vicious anti-Semite'. Go figger

Mon, 02/21/2011 - 19:53 | 983381 Raymond K Hessel
Raymond K Hessel's picture


Tue, 02/22/2011 - 09:45 | 984783 blindfaith
blindfaith's picture

Econ 101: can't have guns and butter too.

Why can't we learn this simple truth?

There was a time in recent memory where the Military told the politicians if there was a need for an 'encounter'. 

Now, the politicians tell the Military to go 'encounter'. 

THIS is why we have these wars that no one wants to declare, it is a politians' and special interests wars, not a defensive action which WAS the military's prime directive in the past.

Mon, 02/21/2011 - 16:56 | 982737 Pringsh Peensh
Pringsh Peensh's picture

No...we're talking FORMAL declaration of war where all manufacturing activity and efforts/output are dedicated to the war effort. Including scrap drives, austerity, etc. Conservation and focus are impossible (not whiney wisconisn) , but austerity might be possible if they wrap a flag around it?

Mon, 02/21/2011 - 17:21 | 982828 silver_serf
silver_serf's picture

The real wars are now economic, technology ensures M.A.D. on a real battelfield, so the empires seek financial domination.  The invasions and occupations of these 3rd world nations are all battles taking place in the global economic war.

Mon, 02/21/2011 - 18:49 | 983137 hardcleareye
hardcleareye's picture

The following is an example:

The Pakistan military says it needs more nuclear weapons to counter and deter India's more conventional military might.

The U.S. analysis is based on the recent increase in the production of plutonium and highly enriched uranium and some experts put the figure for nuclear weapons as high as 110.

Many of these have been miniaturised to be mounted on ballistic missiles with ranges of more than 1,245 miles bringing many Indian cities within reach.

The revelation of the growing size of its nuclear weapons will throw the spotlight on the massive aid packages given to Islamabad by the West, especially the U.S..

China is thought to have played a critical part in Pakistan's nuclear programme, and is said to have helped it manufacture many of its weapons.

Mon, 02/21/2011 - 16:56 | 982741 Pringsh Peensh
Pringsh Peensh's picture

No...we're talking FORMAL declaration of war where all manufacturing activity and efforts/output are dedicated to the war effort. Including scrap drives, austerity, etc. Conservation and focus are impossible (not whiney wisconisn) , but austerity might be possible if they wrap a flag around it?

Mon, 02/21/2011 - 16:44 | 982695 asdasmos
asdasmos's picture

Does anyone have a download link?

Mon, 02/21/2011 - 16:45 | 982697 demsco
demsco's picture

We go to war with Libya 

Mon, 02/21/2011 - 16:46 | 982702 bunkermeatheadp...
bunkermeatheadprogeny's picture

Yes! Yes! And, Yes!

So formulaic, our sit-com writing elite.

Mon, 02/21/2011 - 16:48 | 982704 velobabe
velobabe's picture

i have fear with this empending war, guess that means they have won. we have to figure out how to take back our country back. the natives will help us, i am sure. why can't someone come and arrest these idiots in dc and wall street. just get our constitution back by rule of law, by men that know how to do this.

Mon, 02/21/2011 - 16:51 | 982715 topcallingtroll
topcallingtroll's picture

The people willing to do it are probably too crazy and extreme to be trusted with the resultant power.

Mon, 02/21/2011 - 17:11 | 982780 bunkermeatheadp...
bunkermeatheadprogeny's picture

Polyester will make a comeback due to high cotton prices.

Fashion style after that: Tar and feathers for Manhattan and D.C.

Mon, 02/21/2011 - 16:48 | 982706 topcallingtroll
topcallingtroll's picture

Who needs fiscal stimulus when you have monetary stimulus? If you are going to stimulate can anyone explain why the distinction matters?

Mon, 02/21/2011 - 16:51 | 982713 Misean
Misean's picture

In the former you get charged for the reach around up front.

Mon, 02/21/2011 - 16:53 | 982731 topcallingtroll
topcallingtroll's picture

It seems that attempting to hide who is ultimately paying the bill is better!

Mon, 02/21/2011 - 16:50 | 982707 GeneMarchbanks
GeneMarchbanks's picture

de-leveraging for another decade in the US is silly stupid. The Bernank will hit the panic button after the next crash... coming soon... to a western country near you

Mon, 02/21/2011 - 16:49 | 982709 nline6
nline6's picture

War - The ultimate Keynesian stimulus. Forget the Baker's window, bring out the Paveways.

Mon, 02/21/2011 - 17:03 | 982762 penisouraus erecti
penisouraus erecti's picture


Mon, 02/21/2011 - 16:50 | 982711 Horatio Beanblower
Horatio Beanblower's picture

For your perusal...


"James Turk, Director of the GoldMoney Foundation and Founder of GoldMoney, interviews GATA's Secretary/Treasurer Chris Powell. The 34-minutes interview, recently shot in London, offers deep insights into the workings of the gold market. Chris discloses in detail all of the different actions that GATA is currently taking. The gold price suppression scheme is being explained from A to Z. This video is a must-watch for anyone with a clear interest in gold and free monetary markets."

Mon, 02/21/2011 - 17:00 | 982714 Cleanclog
Cleanclog's picture

Huge thanks for ZH. Main stream media doesn't really want to examine how incredibly distrustful people have become of our "institutions". As I wrote in mid-January, so many no longer trust their Governments, Banks and Financial institutions, Education systems and schools, main stream media, religion or hospitals.  

Once revered professionals are no longer trusted - teachers, doctors, journalists, religious leaders, captains of industry..  Most of the systems are obviously gamed now and cynicism is on the rise.  

There will come a point where the powers that be cannot hope to quell the disgust, disdain and contempt of the populace without violence.  Tunisia just went over that tipping point.  They may be the first in 2011, but they won't be the only.  This is fermenting everywhere and it will hit the boil in many more locales.

Yep, less than a month later, Egypt, Libya, coming soon, Yemen, Bahrain, perhaps Algeria, Iran, Syria, etc etc etc.  And Wisconsin style protests will soon be moving to Indiana, Ohio, than Illinois, and eventually the west and east coasts - which is where I would have thought it would start, but the good people of the mid-west are setting the tone.  Here we go.


Mon, 02/21/2011 - 16:51 | 982717 jmc8888
jmc8888's picture

Monetarism leads to most wars.  Since that's what we are doing, if we don't notice our monetary errors and go Glass-Steagall, then the central bankers of the worlds characterized best with what Benocide is leading the charge in, will lead exactly to that.  How it plays out exactly, and at what point we pass the threshold, we'll only know when it starts.  But since we can see this beforehand we can stop it.  Will we? A greek tragedy if we don't.



Mon, 02/21/2011 - 16:51 | 982723 A_MacLaren
A_MacLaren's picture

Revolution - The fight of the people against the elitist corporatist banksters and their minions (political chumps)


Global War (WWIII) - The distraction of the sheeple enabling the elitist corporatist banksters to maintain control and slavery

When banksters profit from both sides of organized conflict, you can bet they'll try to pull it off.

Mon, 02/21/2011 - 16:55 | 982733 lynnybee
lynnybee's picture

oh god no ........ just implode already ......... let it all go .......... get rid of them, THE FEDERAL RESERVE BANK & the old-money EUROPEAN BANKING FAMILIES (jewish), the ROTHSCHILDS .   How did it ever get this bad ?   Who is really responsible for this mess ?   I don't remember things being like this until about the time of NIXON & KISSINGER !!!  or was it in 1913 ? 

Mon, 02/21/2011 - 17:01 | 982752 topcallingtroll
topcallingtroll's picture

Dont forget the rockefellers

Mon, 02/21/2011 - 19:28 | 983288 zaknick
zaknick's picture

It was this bad their first go around in control of the gov. They were called the "Progressives" back then and Woodrow Wilson was their Obamao.

Same people same policies. Ethnic cleansing authorized by "Supreme Court of Shit" justice Oliver Wendell Holmes (google "three generations of imbeciles are enough") and rigged black markets (prohibition I and now II).

It is their MO.

Mon, 02/21/2011 - 16:55 | 982736 Kassandra
Kassandra's picture

I have a feeling the Bernank is putting on the Depends today....

Mon, 02/21/2011 - 16:58 | 982746 Misean
Misean's picture

Why? His models are all working just fine...

Mon, 02/21/2011 - 16:57 | 982744 kaiten
kaiten's picture

Yes, perhaps new wars are coming, I only have one question. Can broke countries wage wars?

Mon, 02/21/2011 - 17:16 | 982805 Hacksaw
Hacksaw's picture

Yes, perhaps new wars are coming, I only have one question. Can broke countries wage wars?


A better question is, can a country without manufacturing wage and win wars?

Mon, 02/21/2011 - 18:36 | 983099 hardcleareye
hardcleareye's picture

It all depends on what kind of war and how long the war is fought.

Mon, 02/21/2011 - 20:47 | 983583 onthesquare
onthesquare's picture

The 'New World Order' NWO sees a better world with the population down to 500 million.  That would be best achieved with the neutron bomb but that may not be available so off to biological and chemical.  Nuclear causes too much damage to infrastructure and its residual last to long.



Mon, 02/21/2011 - 17:00 | 982750 BeerGoggles
BeerGoggles's picture

how does war solve debt?

Mon, 02/21/2011 - 17:07 | 982766 tmosley
tmosley's picture

I guess you never saw the end of Fight Club.

War resets the debt, at least for the victor.  America has never had a major loss before.  But now is an era of many firsts.

Mon, 02/21/2011 - 17:56 | 982979 BeerGoggles
BeerGoggles's picture

The US is in debt to everyone so whadda they gonna do?!

Mon, 02/21/2011 - 17:12 | 982784 johnQpublic
johnQpublic's picture

well targeted smart bombs to hone in on and destroy the debts in a surgical strike


or we can use nukes to destroy the entire planet

either way the debtburg melts in the ensuing fires

Mon, 02/21/2011 - 17:30 | 982877 Meatier Shower
Meatier Shower's picture

Two ways I can think of:

1. The winner erases the debt it owes to the loser(s) as part of the spoils.


2. War kills people. Less people = smaller economy. Smaller economy = less money. Less money = less debt.

Mon, 02/21/2011 - 19:31 | 983294 penisouraus erecti
penisouraus erecti's picture

Ever hear of the great depression? We were still in it through the 30's and in to the 40's. But, then WWII came along, we ramped up our manufacturing base BIG time, blew the snot out of most other countries manufacturing capacity, and basked in that glow through the 50's. 


The older I get, the more I realize that most people have no clue about history - what has gone before us that we could learn from. But given reading some good history books or watching DWTS I guess DWTS would win almost every time.  Kinda sad........

Mon, 02/21/2011 - 17:01 | 982755 thinx
thinx's picture


Are there any efforts to have a JASMINE flashmob here in the US?

Mon, 02/21/2011 - 17:02 | 982757 aheady
aheady's picture

I love how CNN throws this bullshit al Quaeda story up front and center:

"The burgeoning democracy movement across the Middle East appears to have caught al Qaeda off guard, and threatens to reduce the terror group to irrelevance, CNN terror analyst Paul Cruickshank finds..."

Mon, 02/21/2011 - 19:23 | 983260 penisouraus erecti
penisouraus erecti's picture

Soros want al Queda to be involved in the governmental process, so need to whitewash them a tad

Mon, 02/21/2011 - 17:05 | 982760 tickhound
tickhound's picture


Mon, 02/21/2011 - 17:21 | 982764 Miles Kendig
Miles Kendig's picture

Reading Koo is a good way to keep an eye on the pulse of the JMK centric crowd.  Fact remains that this intrepid group of folks believe ANYTHING is better than disinflation.  Anything. 

Perhaps instead of comparing Bernanke & his associates to Soviet era types we should compare them to Mugabe and his associates.  At least Soviet leaders knew better than to mess with the household farming plots (at least after famine and "blue Monday" activity changed perspective).  Bernanke, Koo and the rest of 'em, to include the pols of the era would rather see famine & rebellion than disinflation.

Many folks forget how often Italy used to change governments.  Now it's Japan that is flopping around while Belgium has completely foregone the process of national government.  Belgium is doing better than Japan, or Italy, which speaks volumes.

Mon, 02/21/2011 - 17:07 | 982767 sschu
sschu's picture

One of the most powerful motivators for people is envy, especially when these same people see others getting unfairly rewarded when they should be punished.  The manifestation of this envy is anger, often nasty and sometimes violent.

This is why we have government, to insure that true justice is administered.  During this most recent financial catastrophe the people clearly see that the perpetrators have not only escaped punishment, but have been handsomely rewarded.

The people have been betrayed by their leaders, Bennie etal could have been prevented if our leaders did their job.  Because they did not, the people will administer this required justice, and it will not be pretty.  It is satanical, the devil shrieks with glee as he sees what will happen in the next few years.


Mon, 02/21/2011 - 17:28 | 982869 Misean
Misean's picture

ROFL! We have government because it's the tried and true, least cost method for the rich and powerful, to remain that way.

Mon, 02/21/2011 - 18:48 | 983133 sschu
sschu's picture

We have government because it's the tried and true, least cost method for the rich and powerful, to remain that way.

It is that way to a large extent now, but it has not always been that way nor does it always have to be that way. 

Your cynicism leads only to anarchy or chaos, I prefer neither.


Mon, 02/21/2011 - 19:58 | 983401 Raymond K Hessel
Raymond K Hessel's picture

Anarchy is the way.  NO governments.  No taxes.  No jackass from Washington telling you what to do. 


I vote for anarchy.

Mon, 02/21/2011 - 21:27 | 983706 sschu
sschu's picture

I vote for anarchy.

I can only assume that this response is in jest.  Of course, anarchy precludes that you have a vote, your statement is a non-sequitur . 

A constitutional republic with limited and defined powers provides the best alternative, however bad, for man to rule himself.  If you want to submit you and your family to the law of the jungle, good luck. 


Mon, 02/21/2011 - 17:09 | 982773 reader2010
reader2010's picture

yeah, they need never-ending big wars. 

Mon, 02/21/2011 - 19:38 | 983332 penisouraus erecti
penisouraus erecti's picture

Was it Orwell's "1984" or Huxleys "Brave New World" where they had the never ending wars. I think it was 1984 but my memory not what it once was - very interesting.

Tue, 02/22/2011 - 01:32 | 984396 prophet_banker
prophet_banker's picture

3 regions in the world alway at war, 1984

Mon, 02/21/2011 - 17:13 | 982785 Dr. Porkchop
Dr. Porkchop's picture

What if they held a war, and nobody came?

Mon, 02/21/2011 - 17:17 | 982812 lolmaster
lolmaster's picture

According to JM Keynes, Dick Koo, and other failed orthodox stimulatarians, if we nuke the world and rebuild it we will have doubled world GDP. 2012 here we come!

Mon, 02/21/2011 - 17:35 | 982891 JR
JR's picture

It is a critical mistake to assume that America’s political class and the owners of the Federal Reserve act with an aim to benefit American citizens and the American economy.  Investment bankers and political leaders, in fact, appear to be pursuing the opposite course -- making policy for their own interests and for the interests of their friends and lobbyist supporters.

A case in point: The American system no longer operates as a democracy.  In fact it barely qualifies as a representative government in that corrupt political parties derail the primary and general election results to benefit lobbyist and special interest groups.

The bottom line is that financial stimulation almost always goes to benefit the owners of the Federal Reserve cartel and its purchased puppet politicians.

The same as the mechanisms of America’s former Republic have been overtaken by outsider forces, so have Europe’s self governments been co-opted by an un-elected financial power, i.e. a “European Union” controlled by representatives of the international bankers' cartel acting in tandem with the Fed/IMF. It’s not extreme to say that western governments are being operated by alien forces.

And what a propaganda joke to say that Obama is a closet Muslim who would allow such groups as the Muslim Brotherhood when every policy decision he makes is cleared through a Jewish Brotherhood.

Mon, 02/21/2011 - 20:05 | 983422 Raymond K Hessel
Raymond K Hessel's picture

JR, you're a douche for your last paragraph.


And we do live in a's also known as mob rule. 


When you can enact any law so long as you feed your constituents all they entitlements they want, govt is reduced to its lowest denominator...mob rule. 


The rich are outnumbered by the middle class.


The middle class outnumbered by the working class.


The working class outnumbered by the poor.


The poor also vote. 


End game.  Shall we play again?

Mon, 02/21/2011 - 21:28 | 983704 JR
JR's picture

Speaking of outnumbering, the investment bankers outnumber us all with their control of the currency, foreign policy, tax policy, voting policy and selection of every important official all the way up to the president of the United States.  That’s what I call being “outnumbered.”

Sorry, but your position is what everybody thinks. But do you really believe the blacks get something the investment bankers don’t want them to have? 

Ours is a totally managed political system.

Anyone who believes that the masses or the mobs or the unwashed run this country is dramatically mistaken. The “designated” minorities, the so-called blue collar communities, the lower educated, the roped in rural dummies, the red-neck war mongers, are the grand leverage of the investment bankers who use them to elect puppets such as Bush and Obama.

Obama, for example, may be viewed as a spokesman for the minorities but he delivers without fail every package needed by the bankers and the Israeli lobby.

For the Democrats to deliver legislation for their special groups -- feminists, teachers unions, the Hollywood pornographers, the media, homosexuals, abortionists, the Jews -- millions of Hispanic newcomers from Mexico/Guatamala and other countries that simultaneously block immigration from Europe had to be brought in by the Democrats to swell the ranks against their greatest opponent -- the white male voter.

Accordingly, there are sections of the Republican Party that were very glad to accommodate multinational corporations, including the banks, for this influx of low-wage/welfare-supported workers to hold down payroll costs coming from American workers; a primary reason many Republicans embrace “paths to citizenship.”

Mon, 02/21/2011 - 22:24 | 983907 Raymond K Hessel
Raymond K Hessel's picture

On some level, we're saying the exact same thing.  Politicians are using entitlements to buy votes and thus lever their power to produce create opportunities for others willing to pay for the privilege to participate in things like POMO, bailouts, etc.


We're saying the same thing...and yet I still think you're a douche.

Mon, 02/21/2011 - 22:42 | 983982 JR
JR's picture

Ah-h. Does that mean we can't be friends?

Mon, 02/21/2011 - 18:13 | 983031 Bicycle Repairman
Bicycle Repairman's picture

"Does Koo's Statement That "Sustaining Fiscal Stimulus In Democracy During Peacetime Is Difficult" Mean War Is Coming?"


No it means democracy is leaving.

Mon, 02/21/2011 - 18:19 | 983053 michael.suede
michael.suede's picture

"the bottom line is that without continued trillions of debt-funded injections in some form, the economy stagnates, and becomes another Japan case study."

I disagree.

A stagnant economy is caused by trillions of debt-funded injections.

A contraction is caused by ceasing the injections, but this is necessary before a proper recovery can begin.

Mon, 02/21/2011 - 18:23 | 983068 gall batter
gall batter's picture

Democracy?  I can't remember it.

Mon, 02/21/2011 - 19:20 | 983249 penisouraus erecti
penisouraus erecti's picture

good point

Mon, 02/21/2011 - 18:36 | 983100 gwar5
gwar5's picture

Well, Mr. Koo, how come Japan didn't start shooting at North Korea a long time ago?


Mon, 02/21/2011 - 18:36 | 983102 ghostfaceinvestah
ghostfaceinvestah's picture

Of course the Fed will lead us to war.

Mon, 02/21/2011 - 18:49 | 983135 serotonindumptruck
serotonindumptruck's picture

I'll take Global Thermonuclear War for $100, Alex.

Mon, 02/21/2011 - 19:19 | 983235 penisouraus erecti
penisouraus erecti's picture

If that's what Soros wants.

Mon, 02/21/2011 - 20:08 | 983431 schadenfreude
schadenfreude's picture

Exhibit 19. US Flow of Funds Data is useless. priceless



Mon, 02/21/2011 - 20:12 | 983444 penisouraus erecti
Mon, 02/21/2011 - 20:37 | 983548 trendybull459
trendybull459's picture

hello everyone,will be happy to see you voting in my blog for existance of the FED:

Mon, 02/21/2011 - 21:06 | 983631 Itsalie
Itsalie's picture

Koo misses the most important lesson, what BoJ's shirakawa summarized in only one sentence:  "You can't buy off a recession". Unfortunately, americans, its politicians and the Fed are not smart enough to understand basic logic.

Tue, 02/22/2011 - 01:42 | 984405 prophet_banker
prophet_banker's picture

and all those years of Japan supporting the world's carry trade is over, it is the usa's turn; i'm just not sure what it means to me and joe sixpack

Tue, 02/22/2011 - 03:00 | 984467 AAPL_Short
AAPL_Short's picture

Come to think of it, the US preaches capitalism and free markets. But cannot possibly compete on those conditions. We invest more in the army than rest of the world combined. Face it folks: we are a militarist leech living off the rest of the world. Everything else is just lip service to sooth the sheeple.

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