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Guest Post: The Dirty Secret of the Debt Ceiling Debate: Nobody Wants Treasuries
Submitted by Mark McHugh
The Dirty Secret of the Debt Ceiling Debate: Nobody Wants Treasuries
On this side of the rainbow, “How much
money should an uncreditworthy entity be allowed to borrow?” is a
rhetorical question. In Washington DC, it’s a topic of much
rhetoric. In fiscal year 2009 Congress borrowed 53.5 cents of every dollar they spent. In FY2010 they borrowed 48 cents of every dollar (*check your numbers, Santelli). So they’ve borrowed and spent 3.5 Trillion to produce 255 Billion in GDP growth (7%
efficiency!), never even bothered to pass a budget for FY2011, and
still haven’t managed to get a single bankster put in jail. Now these
whores are lecturing us about “moral obligations.” They also swear
they’re gonna straighten up and fly right this time.
There is one little detail they forgot to mention – no one actually wants to lend them money. Welcome to the last resort.
Everybody knows that the Federal Reserve
has the unique ability to create money out of nothing. What most don’t
know is the Fed, not the Treasury, provides most of the explanations
as to who is buying Treasuries (read the footnotes). So to those who
said, “I told you so!” when the Treasury revised China’s holdings by
$268B in February, welcome to the pee-pee in your coke moment. That
revision brought China’s purchases to $577B in the two years period
ending June 2010. That was:
- More than 5.5% of China’s GDP.
- 116% of China’s trade surplus with the US.
- More than 4 times China’s defense budget.
And you swallowed it. Of course had you
done even a little research you’d have understood that the data is
about as helpful as an eight month old snapshot of the Universe:
“The
collection of accurate country-level data on cross-border financial
activity ranges from straightforward to virtually impossible, depending
on the type of data to be collected and the method of collection”
~From “Why Treasury’s Data is Crap”
by The Federal Reserve
I
can hear you still clinging to your Scooby-Doo thesis, but anyone who
speaks of “demand” in the US Treasury market at all displays their
ignorance. Like this is some giant game of Hungry, Hungry Hippos. Take a peak at this report
and you’ll see that ownership is an antiquated concept when discussing
US debt. Transactions of long-term Treasuries with foreigners during
the last two fiscal years totaled more than $50 TRILLION, ($160,000 per
US citizen) . So if you insist on having a six year-old understanding
of things, I suggest Gnip-Gnop.
Speaking of six year-olds, I blame the tooth fairy for
all of this. Most American children’s first brush with economics is
the notion that somebody or something out there is actually willing to
pay money for their crummy, little teeth. It is a convenient lie that
distracts children from the pain and anxiety of losing body parts. Most
of us evolve beyond this delusion, the rest become US congressmen and
TV pundits. Face it America, no one wants your debt. The tooth fairy
is all you’ve got left, and it’s been that way for a while.
When I fill up at the local gas station using my debit card, the
money is gone from my account before I can drive home and log on to my
bank’s website (less than 5 minutes). Details about Treasury purchases
are trickled out at an agonizingly slow pace that literally takes years
to complete. That’s right, years. This
time delay, combined with explanations that are vague at
best make intelligent discussion about purchasers of US Treasuries
impossible. The more you dig into the data, the less sense it makes. With the recent release of the Fed’s discount window activity,
I’d like to know how many believe demand for the last 3.5 Trillion of
US debt wasn’t fueled entirely by the Fed. Now they’re playing Got your nose with us.
So the next time Maria Bartiroma asks Lady Gaga, or whatever
sock-puppet she happens to have on her show, “Who will buys US
Treasuries when the Fed steps away?” An enlightened response might be,
“I have no idea who was buying US Treasuries before the Fed stepped in.
Do you Maria?” To which she will most likely reply, “So what sectors do
you like going forward?”
***
?
*Generally I shy away from correcting hot-headed
Italian-Americans, but I believe Rick Santelli values truth and
accuracy. I’m not sure how Rick calculated his recent claim that the
government borrows 43 cents of every dollar they spend, but here’s how I
calculated my numbers:
In FY2009 & 2010 government spending was $3.5177T and $3.4558T respectively.
Source: http://www.cbo.gov/ftpdocs/120xx/doc12039/HistoricalTables%5B1%5D.pdf (page 1)
Total borrowing was $1.8851T for FY 2009; $1.6518T for FY 2010
Source: http://www.fms.treas.gov/bulletin/b2011_1.pdf (Table OFS-2)
US GDP 2008: $14.369T (World Bank – 2010 data not available)
Source: http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mktp_cd&idim=country:USA&dl=en&hl=en&q=gdp
US GDP 2010: $14.624T (IMF)
Source: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
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Manipulating Bitchezzz!!
Wow. Would it not be interesting if the "Tea Party" wing of the Repubs stated that if they raise the debt ceiling the TP will all convert to Independents. What would that do to control of the House of Horrors? More importantly, would it matter?
i think they should call themselves the 'no more debt party' that would freak the republicans and the democrats way out , and maybe make room for rand paul to leave the republican party to become an independent. I would like to see a few honest republican and democrat sentators leave and form a party of independents at the national level.
The boat has sailed, the horse is out of the barn, add few platitudes of your own but we are past the point of fixing this. Focus on what can happen from here. At the minimum "what can I do to protect me and my own", but hopefully some will expand that to "what will come after this system fails what can I do to make the transition easier?" Bullish on pitchforks.
Fred, I have been an optimist all my life but I now agree with you. If, just if we had the right people with the right ideas in power right now we'd have a chance, but we do not. Even the well meaning Republicans are too little and too late to do much. A lot of the ideas are wrong and will cause pain, too. Raising retirement ages, means testing...makes it all welfare and raises new problems in the future. No one will downsize government 40-50% which is what is needed. It needs to get down to Constitutional size. No one will escape this mess unscathed. I just want to see some jailed politicians and bankers when it's done. I actually want them to hurt a little too, a nice form of redemption.
FreedomGuy - "If we had the right people with the right ideas in power right now we'd have a chance."
Good luck with that 'thinking' ....or is it blind faith and hope based praying?
The premise of all believers in democratic Govt is that the Titanic and its course to the iceberg is 'adjustable'. That the sack of parasitical shit we call Govt is a possible good system and can be steered away from an icy shambolic death by some good men at the helm. What part of your wishful thinking, what shred of realistic evidence, ever gives people like yourself that remotest of all ideas?
The alternate view, one all voters should more seriously consider, grounded in reality and actual experience rather than hope, is that it's not the goodness of the people in Govt that matter, but the badness of the system that is Govt. Govt is structured as a monopoly (parasite) power structure hoarding decision-making for society. Unlike the free market where power is distributed between all the people and producer, which in turn allows all manner of diverse and novel opinions to exist in contrast to the Govts single one-size-fits-all policy.
The problem with Govt is Govt.
Everything Govt touches turns to crap.
You and 50% of the voters that vote are delusional to think this system will ever work. Face facts the Greeks who thought up this novel idea of resting power away from the people and into an all-knowing, all-wise social structure also couldn't make it work. And this illusory idea hasn't fuking worked on any level or from any angle ever since (ie. Govt is a truly shit idea, RIP).
You're also delusional to ever entrust your best interests with someone elected who you've never met and are never ever likely to have any working relationship with (ie. democratic representation is a joke). Why are you even wishing for someone else to save you and the nation?
Representative democracy is a sham from start to finish. A free society and free markets do work and do deliver democracy by you representing and governing yourself, no parasitical Govt required
I agree with most everything you post. I am not at all delusional. In my other posts I muse that perhaps in a few hundred years we will realize after innumerable failures that the collective does not work...in fact government does not work. It is the immense difference between voluntary and involuntary associations. However, we did it pretty well in 1776 and later with the Constitution strictly limiting the power of government. We set up rational rules for self governing. But even the founders realized that it was an experiment to see if self rule could be successful.
Unfortunately, we are going to prove it unsuccessful at its end. No government seems immune to the frailties of man and the seduction and corruption of power. I even wonder what would happen to an idealistic guy like myself if I had immense power.
The current alternatives to our form of government are worse. I would trust libertarian types, in general because they have the ideological underpinnings to persist in dismantling the leviathan state we've created. I would go with a Ron Paul and similar types. I believe most all the founders would be classified as libertarian, today. After doing my taxes yesterday and paying a breathtaking amount I wish I could trade today for back then. I would trade all the comforts, modern medicine and technology just to be able to do what I want and go where I please and voluntarily make a living with my fellow free man. I would be Nathaniel-Hawkeye in Last of the Mohicans.
I guarantee the founders would never have stood for the absolutely complete intrusion into our lives that we have these days with government. We are in fact subjects today, not citizens. We cannot drive, invest, save, buy, sell, change locations, travel, breathe or eat without government forms and permission. We are in fact, not free any more. What is worse, we accept it. I think the founders would find us a sad docile lot, except for the statists who protest and take over captial buildings to get more of other people's stuff. They are vocal and active, well organized and generally stupendously stupid.
I dunno. Let's start with these fucktards and see what happens.
http://www.mediaite.com/tv/gma-takes-on-tea-party-darlings-on-the-dole/
If we cut them off, can we keep the funding for homeless, disabled vets?
Not for the homeless...
Disabled veterans, as servants of the National will, if disabled in the performance of such duties, should be rightfully compensated from the national treasure. This is not charity, but a rightful responsibility of the nation who called on them to sacrifice.
I officially want to tell all farmers who get subsidies to go screw themselves. I realize that is like insulting the Pope as farmers are a revered and protected class. However, I printed out an article years ago about a Missouri farmer making record profits on the higher commodity prices and still getting a $500k check from the government. He said he felt guilty but he didn't send it back. I hope he at least spent it on some new John Deer equipment.
I just finished my taxes this afternoon and I could not believe my effective tax rates as a single guy without preferred tax deductions like a home. When I consider the fact we run 50% deficits and my real tax rate should therefore be double to balance the books I nearly vomit and pass out simultaneously. I officially have no tolerance now for lazy scumbag public union employees demanding double the private sector income and benefits, parasitic farmers or any other subsidy taker, worthless government programs that are black holes for money and results...government largess in any form.
The truth is the Democrat-socialist-statist-collectivists have nearly completed their victory. When even the TP candidates are on the dole its all a charade. God help us in the productive class.
The TEA Party movement is made up of Independents.
That's the biggest disconnect most people have with what is happening politically in the US since Bush's agenda was rejected with a Democrat win in the White House.
The tragedy is that nobody understands this movement is not a republican thing.
"So they’ve borrowed and spent 3.5 Trillion to produce 255 Billion in GDP growth (7% efficiency!), never even bothered to pass a budget for FY2011, and still haven’t managed to get a single bankster put in jail. Now these whores are lecturing us about “moral obligations.” They also swear they’re gonna straighten up and fly right this time."
Now that is a blistering indictment! Thank you Mark McHugh.
Congress cuts to spending are always in the future. Grandiose plans to bring down the deficit in the future. Deficits plans that Congress is free to change and ignore when the future arrives. The fact that Congress now struggles to pass even a token cut means there is no end to the reckless spending for the foreseeable future. Perhaps Congress should operate more like the States that are forced to do a better job of balancing the budget now not just in the future.
Sadly, that is all meaningless until the FED is erradicated. As I read above, they will just pick up the slack and you won't even know nor will your CONgress scum.
I actually don't blame the Fed. I don't like the Fed but it is just trying to make the impossible numbers our Congress gins up work. Fundamentally, Congress' budget, entitlement promises, willingness to tax and other promises don't work. The Fed has to balance it with funny money and shady accounting. If we had a balanced budget Congress, the Fed would not really have to do all this crap. I start with Congress before the Fed. Fed is next, though.
I view them as an unholy alliance.
And the bulls really expect that this sham of a market will continue? Buy physical PMs and sit on the sidelines and figure how you are going to survive when the banks and food stores are closed, the unwashed are roaming the streets looking for victims, and the price of gas is meaningless since all of your tires have been stolen.
Anyone on ZH who reads this article and continues to live in a large city deserves to have their tires stolen.
This is an informed community that understands much of what is happening in Washington and New York. Many of you have bought farmland in the country. Do you have 2 years worth of fuel for your equipment? Are you a member of the local community? Does your community have a local disaster management plan for Flood, Earthquake & economic collapse?
Are the local farmers, ranchers, and orchardists organized enough to ensure the nearest city council that they can feed the population through the upcoming winter?
This group has some the the most intelligent financial minds, almost all of you have common sense and its why you came here looking for the truth. The truth is staring you in the face.
Each of you has prepared yourself and your family. It is time to become a leader in your local community. ZH is a community and this community needs to stand up and show you the rest how to handle the upcoming financial/govt collapse.
The civilizing of the barbarians to toil for the common good or civilization may be a worthwhile goal for some, if not a little overly utopian. There are others who take the more individualistic path of "I will take care of me and mine and you do the same." There are historical precedents for both. We now find ourselves in a Global Community and all I see are new and improved ways to slaughter each other and immediate 24/7 communications so I can tell everyone what I am chewing for lunch. I think I shall stick to the small cell, resilient shared tribalism that has the merit of Liberty. All else is new-age shit. No offense meant, just a different vision. This is afterall, Fight Club.
What I was describing is the resilient shared tribalism. I produce cattle, food, and lumber. My neighbors produce apples, cherries, and wine. We produce far far more than our families could ever eat. It is in our best interests to make sure the people in town are fed when SHTF. It is far cheaper to feed them than to shoot them and protect my borders 24/7. Also, theres a dentist, a couple doctors, a vet that I would sorely miss.
So I guess my goal is to have a bigger tribe. Not only for protection but because many of them specialize in things that I do not.
Sorry, I took it as a continuation of the status quo. It appears we are on the same sheet, just maybe different scales.
I would suggest most ZHers are on this sheet also, just different levels. I think the problem is in numbers, mainly, we are WAY outnumbered. I notice even FEMA is doing ads encouraging people to pul their collective heads out. So far I see no results. I have been sounding the alarm for years and other than my own contacts, to little or no avail. I am tired of warning others. If they haven't grasped the enormity of the situation by now, I don't think they ever will. Que Sara, Sara?
I believe as well most of the ZHers on the same sheet as well. Community plans are essential I've found. First look to your County Disaster Mgmt plan. Read it to see if its real or just shelf stock. Meet with your community council, or city council to work on updating or in our case creating a management plan. Focus on the earthquake preparation. You will have a loss of communication, food supply, and possibly power supply disruptions.
If your community 600-3000 ppl are aware and prepared for this. You will be able to keep order and feed the population. This will give you a 2 week advantage vs. the city dwellers. Enough time to get ready for mass exodus of the cities.
Just look at the Japanese response to the earthquake. How long it took to get any fuel/food/power to those poor souls. That nation is the best and most prepared nation on earth to deal with Earthquake/Tsunami.
The federal Govt will not be available to help/feed you.
See: Noramlcy Bias.
Damn, wish you lived near me. But then, we'd still be on our own. Like your attitude
Would those be the farmers that get government subsidies or the ones who grow unsubsidized crops?
The reality is not everyone can move to the country and grow organic squash. We will all be in this together and we will have to figure out how to buy and move essentials together. My favorite is to pay in PM's or barter for currency and other the other side we would have to organize neighborhood security details whether it's the burbs, your apartment building or rural areas. Decent people will band together. Bad guys will get shot without trial. Won't have the money to keep them in prison for life with weightrooms, a/c and HDTV.
The real fight to me will be the forces of liberty versus autocracy. In a meltdown the autocrats often do very well.
Freedomguy,
I know of a couple farmers that get subsidies. These are large acreage wheat and corn farmers. With the prices of corn and wheat going up, they will try again to get out of the govt. program but once your on the role the govt. doesn't let you off easy (it's a contract). Remember the govt. can give these subsidies because they feel they are doing the right thing by setting aside land for wildlife & soil conservation.
When things boil over it all comes down to food and fuel. If you live in a big city it will likely break down into ethnic tribes. Look around your city see if you can find someone from Russia who went through the breaking up the USSR or even better someone who went through that and the financial crisis of 1998-9.
Make friends with someone who has some sort of agricultural ties. If you don't know anyone ask around ZH. First hint of a financial collapse get out.
The forces of liberty and autocracy will come to heads in the cities and you don't wanna be there to witness it.
You think we don't try? I tell co-workers how PM's are the only way to preserve their wealth. They look at me and say yeah, I was thinking about buying some gold, but it's too expensive now. I try to tell them to buy silver, nah, it's in a bubble right now. They think the government will somehow make sure everything is all right. They couldn't be irresponsible to the point that our country would crash or anything like that. How anyone can look at the news in the world right now and not realize how f@&ked we are has got to have a screw loose. When we have 1.7T deficits and they are fighting over 30B in cuts, it boggles the mind. It's snowing again here in NH. Shit.
Show them a chart of prices in the Weimar Republic and ask them if PM's were in a bubble. If they don't get that. Feel sorry for them and write them off.
Tires? WTF good are tires. They be stillin battries. Mmmmm hmm.
Please! Anything but the "unwashed". I'm not sure I could handle streets full of unwashed roamers.
And the stores will be closed on top of that. How will these unwashed buy soap to wash themselves? Oh, the horror!!!
END THE FED
Santelli is a lying Sack of Cow Feces. All he's saying is noise.
The value of a nation is more then a pile of cash.
The trick in anything is the investment in the right things.
If the feds fix health care, properly. We will have huge surpluses.
But that means crucifying the Insurance company parasites.
I have to disagree with you about Rick. I think he's the only guy on TV concerned about America's future. You don't have to agree with everything he says, but I think his heart's in the right place, and there's not many others I would say that about.
(FYI - I didn't junk you)
The trick in anything is the investment in the right things.
If the feds fix health care, properly. We will have huge surpluses.
Thanks for that... I needed a good laugh.
As for your own "education"... I'm unsure where to begin, but first you need to... Ah fuck it, its hopeless.
I did junk you. The 3 sacks of human excrement are Obama, Bernanke, and Geithner.
I junked you too. Gubbament fixing healthcare????
BWAHAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAHHAHAHAHAH
There won't be a fix to health care with this nation full of fat assed lazy american parasites around. Count on it.
Gubbament is fixing healthcare-
rising food prices
shrinking portions
shocking numbers of people on a fixed dole from the government, which buys less and less food
Americans are going a diet - even without the 2000 pages of pork
who knows- perhaps in a few years enough American women will have dropped enough excess pounds to interest me again, in the mean time I'll stick to Brazilian women
Excellent. I was in line getting gas the other day. I saw this nasty fat fat bitch, pumping gas into her huge SUV, yelling at her equally diabetic children while she emptied a weeks worth of McDonalds wrappers from the back of her SUV. Pardon me for not getting out and singing the anthem. Ive been perpetually depressed for months and dont see an end to any of it. Even if I prepare, nothings going to happen in my lifetime, or so it seems....
I hate to say it, but I am with you on the depression. That is a hard thing to say when you are a hard wired optimist as I have been. Between world disasters and the fact that we are not going to "fix" the ship of state, here or Europe makes it depressing. I watch my income drop, taxes go up and opportunity evaporate. The game is rigged.
BTW, Asian women, especially born in Asia are great, too. They stay slim, are soft on the outside and strong as steel on the inside. They have expectations, though and will give you hell if you're a slacker, lol. I have pretty much given up on American women...and maybe America, too. Just gonna try to survive and hope for the best.
When is the last time the Fed's fixed anything?
The Insurance companies's big business was propelled forward during Reagan's mandate period. Since then the vector has continued forward towards the eventual proletarization of health workers. The greed of physicians and Nurse practitioners and their divisions are but one of the means by which that project will eventually become to fruition. The casualties have so far been among others the quality of care, and the very ethical foundations of the profession as a whole. Medicine has already sold its soul to the devil and the devil has now the upper hand. This problem can not be solved in the same state of consciousness that produced it in the first place.
patb, you're a chump.
Federal state local + private debt = 4x GDP, nearly 100% of all US net private equity. Every house, car, factory, power plant, oil well, and windmill. That's why the Fed is now lender of last resort and largest holder of US Treasury debt. No one else wants it.
Your remark about insurance companies is particularly foolish. Private insurers are solvent and pay claims. Entitlements like Social Security, Medicare, Medicaid and public employee pensions are underwater.
Destroying the private sector will not save you. That's like selling farmland to buy luxuries and lunch for your friends today, but you all starve day after tomorrow.
That is why it is important to put the lunch tab on a JPM/Chase Credit card.
Then maxxxxx it the fuck out on fucking silver and gold nugggggggetttttttttssssssssssssss!
So, if he were saying nothing, you'd say the same thing.
You gotta pick a side. Anyone bucking the system is to be congratulated.
The value of a nation is more then a pile of cash.
I'll agree with that. The paper value of stocks and real estate are also "worthless". A country/society is only as wealthy as the goods and services it produces.
The rest of what you said is complete and utter bullshit.
Also, regarding health insurance? Health insurance has a "history of government interference and protection".
http://findarticles.com/p/articles/mi_m1094/is_n2_v28/ai_13834930/?tag=c...
You are about as full of crap as a Christmas turkey. When has the fed ever fixed anything properly?
I junked you.
The problem with healthcare is the bubble caused by government intervention. Government can't fix healthcare because it was government intervention that fucked it up in the first place.
Do you think you're in the wrong forum? Could that be it?
I haven't seen Santelli posting this evening. If he was on, he would just stepped over you, as one steps over cow shit in a field.
He's one of the few voices of reason in the msm - and you're a knob.
Rick is the canary in the coal mine. He feels his oxygen depleting and is singing his heart out over the loud machines to let the miners know.
So, you are saying if you "fix health care" (sp) Social Security balances, farmers keep getting subsidies, government employees can go up to three times private wages...everything will be fine?
Get some smarts:
"Dreams Come Due, Government and Economics as if Freedom Mattered", ISBN: 0-671-61159-3, by John Galt
The book is dated, but many of the things it talks about are still valid today.
You showed up to Fight Club with a gunny sack over your head!
Great rant. Yes, the banksters get a lot of blame.
But, it is really WE who are the problem, we elect CONgress. And until we as a people figure out how to elect responsible people to represent us, the problem of ovrespending will never go away. Until the system crashes...
:(
:(
I was trying to point out that we've all got some growing up to do and that the game has been rigged against us. In a true free market, the US government would never have had the option of borrowing as much as we have.
I love this Jefferson quote:
That is a great quote. I find it hard to believe he said that. Even when he was alive the bankers controlled the economy?
Even when Jesus was alive bankers controlled the economy....
Jefferson realized what a problem it was:
Because as Rothschild pointed out:
What ever became of the Rothschild family?
Virually nothing is heard of them in MainStreamMedia these days.
ZeroHedge itself has posted articles detailing the evolution of banking families out of italy into Europe. I havn't heard of Rothschild family going bankurupt.
Is this silence perhaps by design?
Who "owns" the Fed.
Who controls the unelected EU bureaucrats or the IMF officals?
Why is it that western banks invariability dodge the bullets coming their way.
Pundits call for haircuts...yet they never happen. The TBTF US/UK/EU banks always prevail... with help from government officials and regulators at the last moment.
Why/How is this so. By accident ... or design?
Could it be the likes of a banking family that's had hundreds of years of COMPOUND interest accruing on its behalf and has its operatives in US/UK/EU goverments?
Frankly we don't know.
Central Banks, the BIS, IMF, The ECB and EC/IMF officials ... how are they put in place? We don't know, certainly they're not elected. There's little or no visibility into these organizations that rule the status quo we live in.
These heavyweight organizations sit at the top of the financial pyramid and us plebes have little insight on who the movers & shakers are that sit behind them.
Can't say I necessarily believe in the illuminati and such, however it seems to warrant further investigation.
Do realize that folks such as Congressmen,Presidents, Fed chairmans and even CEOs of GS & JPM simply do not have the apparent wherewithall to orchestrate things on a very grand level. Think about it... even Loyyd & Jamie likely aren't worth more than one billion each. While wealthy... do you really think they are the controlling interest in their respective companies, the Fed, the ECB?
Could ultra wealthy banking families such as the Rothschild and Rockefellers be the shadow Government that we sense is behind the scene.
Surely many of you must suspect by now that someone such as an Obama is merely a puppet. So who or what is he a puppet too?
Words such as Military/Industrial Complex or the ever vague "big international corporations" get bantered about.
Is that all there is to the story?
I'm not trying to dismiss your questions, but I look at it this way. The idea of humans trying to enslave other humans through debt is older than recorded history, so I don't focus too much on who's doing it now. The Rothschild story is interesting, sure, but I'm more interested in the way people use whatever leverage they have to exploit others and the way others let them get away with it.
The US started out as a noble experiment that aspired to allow people to break free of this never-ending debt spiral, but we are now making all the mistakes the US declared independence to free itself from.
So it's not that "they" are so powerful and strong, it's that we are gullible.
I think we should start a "re-elect NO incumbent" campaign. All new faces might make a difference.
We've tried that in NJ about 100 times. It doesn't work. But then again, NJ invented "cronyism".
So long as we view the federal, state, and municipal govts as large, medium, and small portions of the same govt, it won't matter who's been elected or what party they're from.
What's needed is to push the federal govt back to facing outward, towards our needs in the world at large. We need the state to take back control over the domestic affairs and we need our municipal govts to handle the day to day ops of running a civilized Western country.
That's how I would fix it.
I agree to a point with you, but I think we need to make a bolder move and that is to live and work like truly free people. We actually accept being ruled...to death. The best way I can put it is the next time you make the commute to and from work and you see that everyone is going 10 to 15mph over the speed limit (if its not jammed) while cops poach for revenue, consider that free people would say, "This is the speed we want to go and we own the damn country, so back off!". "Ruled people accept the endless regs, fines and harassment and just say its part of the game and a civilized society. Men must be ruled.
Look around you and think like a person who actually owns himself and abides simply by rules of decency. True "laws" are those that protect life and property. Everything else is just rules...like a game.
http://pixel420.com/pixel420/stateless/
Govt (at any level!) is an unecessary evil!
The people are the problem, not "WE the people." I was born into this sytem; I have no choice. I will educate those whom I can, but like many on ZH, we have a hard time overcoming their conditioning. Not that I've never voted, but isn't the act of voting a validation of the system?
Good point and you could argue both ways. The problem of democracy is ignorant and self serving people gaining access to the property of others through the process. It is a combination of a plane in the process of going down as the passengers vote on what do coupled with two wolves and a sheep voting on what's for dinner. We had a Constitution to actually prevent both scenarios but we've ignored it for about 100 years, now.
All part of the Fed obfuscation. Britian supposedly 'purchased' a car load of US Ts when they were faced with enormous budget deficits... Who believes that?
It is also Britian that is supposedly 'buying and funneling US Ts to China because China doesn't want it's citizens to know that it is buying Ts'...bs
Brad Setzer, who used to accumulate and publish TIC data, and now has taken a gov job, had this to say:
"That implies, if the Pandey/Setser estimates for official purchases are right, that private investors snapped up more Treasuries than the world’s central banks. Central bank demand accounted for a far smaller share of total issuance than in the past few years. In 2007, for example, central bank purchases easily exceeded total issuance. The big increase in demand for Treasuries in 2008 came from private investors in the US. The “money” graph"
Anyone believe this?
Here is a link to Setser's site and his old TIC data.
http://blogs.cfr.org/setser/2009/02/26/who-bought-all-the-treasuries-the-us-issued-in-2008-and-who-will-be-the-big-buyers-in-2009/
Excellent thread Mark!
Not me, man. No way, no how. Of course knowing it and proving it are two different matters. Despite my sophomoric tone, I have literally spent hundreds of hours sifting through the US Treasury data. It is such a convoluted system, I've found it impossible to explain. It would be at least twenty pages long and too boring for anyone to ever actually read. So once again, I've opted to illustrate absurdity.
Your own sensibilities should tell you the demand can't be real.
Mark,
Write it. You know in your heart it is your mission/obsession. Write it so that educated but ignorant folks like me can understand.
Often times when you start to write, the explanation comes to you in the process of getting it down on paper. You have a gestalt that seems too unwieldy (thus seemingly impossible to explain) but you have it. Get in down in bits and pieces, then shift the pieces around on physical bits of paper if you must, then write it.
I might start it with some concepts or terms at the opening, or perhaps a layout of the components you will need to be discussing, something that those in the know are instructed to skip, if they know it allready. Tell those folks to go to page such and so to start while the tards like me will start at the begining.
I have known since I was a kid that the system (stock market, banking, government funding) was simply too big and changing too much to possibly be frozen in one static snapshot and be able to be balanced. Just the size of it. Never mind the dishonesty that can hide in the shifting shells of confusion. The US Government is nothing but a set of doctored books hiding the fact that we are insolvent. And as capital flows from one place to the other, trying to fill genuine needs with less and less, still the parasites skim.
I go on and I am not in any real know. Your project sounds like a worthy one. You would have to do it because you want to. No one will pay you. But we would be grateful.
Peace.
Thanks for the encouragement.
If I ever do write it, I'll be stealing that.
That simple sentence covers it. I have attempted to find a coherent way to explain this again and again. This is not me trying to be funny: I feel autistic when I try.
This is me trying to be funny: The manifestation of my particular form of autism does allow me to make fart noises, so I do.
I just wanted to write something before the debt ceiling vote, just to point out what everybody already knows, or should.
I can't promise anything, but thanks again.
Break it down and explain it piece by piece. Then arrange the pieces in logical order.
I agree with MsCreant. Write it.
Put it down on paper.
Why not use the power of the network to our advantange, maybe ask for the people on this site for help with edits, rewrites, citations, criticism, etc.
It could be the thing that's needed.
Don't you suppose the opacity is by design? That they have made it hard and convoluted so that, no matter how well researched, the majority, when they see the work product, will simply roll over and go back to watching Idol?
That's exactly it, Chuck.
It would read like the "begets" part of Genesis...
You think 'po folk' are in your pockets? Add it up people; you are paying China for the privilege of getting screwed out of jobs.
http://www.youtube.com/watch?v=MWLTA7F9QzU
Yep, we've been down that road... We all know where it leads. May be time to find another path. But before I go through that back door, I offer one for "the man". That back door Penn. Treasurer Dwyer took back in the day. Its wide open...
http://www.youtube.com/watch?v=jC1jZAInGIY&feature=related
..now that the smoke's gone
and the air is all clear
those who were right there
got a new kind of fear
you'd fight and you were right
but they were just to strong
they'd stick it in your face
and let you smell what they consider wrong.
that's why I say hey man, nice shot
what a good shot man.
"Face it America, no one wants your debt."
I guess Mark McHugh isn't from our country. Tough to have perspective if your not actually involved in the shit sandwich that has been served up.
For the record, I am an American who favors forcing the cook to eat said sandwich.
I think he's actually wrong, although I understand his bigger point. I would say, "Face it America, no one wants your debt at these prices!" Now, if the long bond paid 10 to 20% people might buy into the risk.
Frankly, we are going to default so I wouldn't buy anything long at any price. Anyway, the higher the price, the sooner the default.
Bring the soldiers home and shut down washington until 2012.
Your grandchildren will thank you for it.
With a two party system like ours, why would our grandchildren thanks us for not allowing more drops in an overflowing bucket? As long as we keep electing these scumbags the bucket will always be overflowing. We need a third party.
so the question is.
of the people here at ZH.....how many of you buy and hold USA bonds and T-Bills
Here's how dumb I am....I bought I-bonds.
Yep, there was a time that I believed I could trust my government to calculate what interest rate I deserved. I now wait for a drop in silver to correct that error.
Still, it's like admitting you made out with a transvestite.
Now you mention this... in the past (1 year ago) I complained to my bank that it took like forever before those transactions took place. And now indeed, it goes like lightspeed. And got forbid if you overdraft! I once had a letter a few months ago FOR A 7 EURO OVERDRAFT ON MY VISA!
When you have a central banker that expells rainbows out of his anus who wouldn't want treasuries?
Fannie Mae and Freddie Mac
how mush do you hold ?
instead of bailing out retirement funds they will force them into treasuries and bonds. the same way they raped social security.
Fannie Mae and Freddie Mac
I will start it off.....I have $40,000.00 in this trash
Nice article Mr McHugh. Pardon my asking, but are you related to Money McBags?
We are of no relation...
I like him in a jealous, "we're too much alike" kind of way. I couldn't resist using a "pee-pee in your coke" reference, but I know he used one before me. I refuse to pay royalties on things we all said when we were five.
Let's see what the muni defaults will do to the precious deficit.
Let's see how Obama will talk himself out of that one when he start to focus 100% on his reelection for 2012.
Also, when it seems his campaign money will be AS BIG as last time when it was a recordbreaker: BE WORRIED!!
and another damm thing
I park cash in Chase and other banks....$10,000 to $20,000..
I do not move $ into or out of the accounts ....they move the balance to (0)
so I do not get % on the balances
you can not make this shit up
Take the cash out of the bank so they can't use your cash to leverage 10 times your deposit.
If its in a savings account, they can leverage even more.
Keep at least 6 months of hard cash on hand.
Cash yields next to nothing. I highly doubt a bank is moving your money between accounts without your consent.
so I will ask the question again..
so the question is.
of the people here at ZH.....how many of you buy and hold USA bonds and T-Bills
probably as rare an event as a Phoenix Capital Research article without a newsletter solicitation, or a Money McBags piece without a dick joke
When PIMCO got out, I got out. None. Zilch. Its all in commodities, for now. I don't know where to go next - land I guess.
Double Post
How do you do your investing in commodities?
Mutual Funds and derivatives.
ditto
I'll bite: I have a lot of tips and tbills and am not at ease with the situation.
I don't.
Bonds are the modern day SLAVE TRADE. When a government borrows, it is saying, "Loan me money, and my SLAVES will pay you back with the sweat of their labor with interest."
The enslavement of the population by their government is implicit in all government borrowing. "Bonds"... "Bondage"... Get it?
Never loan a politician money. Never feed the beast. Never buy a government bond. It is immoral. You should avoid it on principal because it IS the modern form of slavery. How is this simple morality lost on people? I don't care how good of an "investment" being a slave-owner is, I will NEVER buy ANY bond from ANY government. Period.
Never held a bond in my entire life. (But there will be a time to buy bonds someday.)
"Cash equivalents" include Federal Reserve Notes and Short Term Treasury securities. These are perceived to be the same instruments because treasuries do not trade with a credit risk. That fabric is loosening a little, and would be much looser were we not in a relative world of weak fiat currencies.
Even though people think they do not own ST Treasuries, the fact is they do indirectly. Money market accounts, savings accounts, and short term holdings of companies & retirement accounts are heavy in ST treasuries.
Paulson & Geithner have purposely reduced the average maturity of US public debt. The US now has the shortest average maturity of any industrialized nation. The only entity buying LT debt is the Fed. If the maturity schedule were anywhere near historical standards, the spread would likely be telling a different story than it is now. I believe that changing the maturity schedule has had just as much of an impact on shaping the yield curve as QE- which hasn't accomplished anything remotely related to the Fed's dual mandate.
International creditors of the US are kind of stuck. They cannot thrust their balances & payoffs into commodities (including gold) without causing even bigger bubbles. They have no interest in US real estate at the current time (that may change with the exchange rate). They can either re-up into ST government securities or abandon the $ which will further erode the currency, devalue their existing holdings & hurt their own export industries.
I would not expecting the demand for US Treasuries to contract signficiantly unless (1) inflation comes in hot- which is plausible if not probable or 2) credit risk- which would be a couple of years out.
Many brokerage accounts also "sweep" uninvested monies into banks overnight. They say they're doing it because they care that you get some interest.
"So they’ve borrowed and spent 3.5 Trillion to produce 255 Billion in GDP growth (7% efficiency!)..."
Living proof that printing money does not print wealth. In fact the minute after the 'go' button was pressed the amount of wealth was no different than the minute before it was pressed. The whole Keynesian scam is based on getting people to believe the "illusion of prosperity" that von Mises warned about. Then the scam hopes that the the trick will carry on long enough so that when values fall back to their real levels, the real economy will have grown enough to cover for the fraud, or at least to where the fraud won't be nearly as bad as it would otherwise have been. This is the much feared "double dip".
Bernanke, Krugman and company: we are not fooled and thanks to the internet, we can respond in ways that the public can relate to. Your game is up. That is why you hate the tea party.
"So they’ve borrowed and spent 3.5 Trillion to produce 255 Billion in GDP growth (7% efficiency!)"
Well, I think I came to a similar conclusion in my comment #917672, on 01/30/2011:
by Zinaon Sun, 01/30/2011 - 10:17
#917672
US nominal GDP in 2007 = 14.06 trillion
US nominal GDP in 2010 = 14.66 trillion
An "astonishing" increase of 600 billion dollars (0.6 trillion)
US public debt as of 09/30/2007 = 9.00 trillion dollars
US public debt as of 09/30/2010 = 13.56 trillion dollars
http://www.zerohedge.com/article/step-aside-bernank-here-comes-timothy-j...
Let 'em go. Last time I checked, their money is the same color as mine. US needs to default. Can someone explain to me why Japan doesn't? Who the hell would blame them if they did? US Government probably. Obama would more than likely invade Japan to force them to buy US T-Bills.
Here's why I think Japan hasn't defaulted:
When Japan defaults, there will be open discussion about the evils of the carry trade, and how ultra-low interest rates actually further destroy a country's economy. That's not a lesson TPTB want taught because the USD carry trade can go on for another decade netting untold fortunes to those willing to loot America from within.
on Sun, 04/03/2011 - 14:48
#1130096
Anyone on ZH who reads this article and continues to live in a large city deserves to have their tires stolen.
This is an informed community that understands much of what is happening in Washington and New York. Many of you have bought farmland in the country. Do you have 2 years worth of fuel for your equipment?
let us try again.......
Fuel degrades rapidy in storage
http://theepicenter.com/tow021799.html
STA-BIL
http://www.i4at.org/surv/sta-bil.htm
Store up to 15 months. I have done it before, worked fine. But yeah, not 2 years.
I apologize, When stated 2 years I should have stated (keep fuel additives on hand). Also, when stating fuel I mean diesel. Last I checked tractors didn't run well on gasoline.
To zenO and MsCreant,
Thank you for the links, they are helpful for the beginner, but let's kick it up one more notch.
If you are merely worried about a week or two without electric service, then by all means, follow the recommended dosage and use the appropriate container materials. You will save yourself the headache of depending on a piece of machinery that will fail when you need it most.
However... there are a few tricks to pull out of the hat.
In the spring of 2008 I bought a brand new Coleman 5kw - 6.5kw genset for the onset of hurricane season here in Florida. I added a little more than double the recommended amount of Sta-bil to five gallons of regular gasoline and filled the tank. After the first test firing, it sat unused for at least six months. I only test it for fifteen minutes every three to six months, in fact I just did so after reading your posts. It worked fine, and even ramped up to accomodate the increased load of extra items plugged in to it. It still has approx. three gallons left.
Perhaps one day I will incur repair issues, but I have extra seals and plugs on hand.
I am currently testing how quickly a 55 gal. HDPE drum degrades when filled wih petrol. Maybe I'll get around to posting about in five or six years. ;)
our tanks, 500, 350, 150, 75 tanks. Make sure to keep out of the sun but keep ventilated. If you don't use the tank often circulate the fuel and add additives. Two growing seasons no problem.
If things haven't calmed down and normal fuel flows returned by then, make sure you have horses to pull the plows.
Remember these are for diesel engines. Gas engines are a diff story.
Sure, but the USD dollar is just the obligation of the Fed, which derives its 'moneyness' from the assets the Fed holds, which are US Treasuries & since 2008, 'worthless' MBS.
If nobody wants US treasuries, then why do they still 'money good'? How can the Fed 'monetise' securities that nobody wants?
If you take a step back from your question, I think the answer will become clear.
Once you accept paper as money, you've already ascribed value to something which has none. The people who print that paper now get to define value, they use that perceived value to put others in debt to them. They have little choice but to pretend that those debt obligations mean something and are of value, otherwise people will realize that their money is no different than the suitcase full of IOU's in "Dumb and Dumber."
Actually, every $ of liquidity it creates via bond or other asset purchases in the system + every dollar of credit extended by a bank in the USA in the fractional banking system is the total quanity of Federal Reserve notes. It's all fiat & it is only loosely related to the Fed's balance sheet.
A short term US treasury security is a promise to pay an obligation of the US government with fiat Federal Reserve notes + some interest dominated in the same currency. Even though treated similarly in practice, they are different instruments. It is possible for the Treasury to default on its obligations without the Fed printing additional fiat.
What a sick fucking country...
But Hey....star search is on isn't it.???
This articles contradicts itself... on one hand he says
"Everybody knows that the Federal Reserve has the unique ability to create money out of nothing."
But before that he says
"There is one little detail they forgot to mention – no one actually wants to lend them money."
This guy does not understand how the monetary system works. Treasury sales do not fund anything. Do you really believe that when we need to spend we ask china "hey, can you buy some bonds so we can spend?" When the US wants to spend it just spends. We could have a fully functioning monetary system without selling treasuries at all.
You're kinda late to be a troll, here's the point (and God I hate having to spell it out):
Monetizing the debt is all we've got: past present and future. So government spending destroys the currency, period. The only thing left to calculate is the rate of collapse (which you are more than welcome to do).
One of the things you have to calculate is how much maintaining the illusion of a functioning market for US debt accelerates the collapse.
Get back to me when you can answer those questions.
Exactly how is the currency destroyed. Please expound on your bs.
Nevermind. They'll explain it to you in high school.
Thats why inflation is hitting hard, I went to Walmart this weekend and prices have shot up again. I can afford it, but what about the people who are on a fixed income, low income and/or on govt. subsidy (food stamps). The reason we didn't feel the inflation was because of two reasons. One, most of the money was locked up and not being loaned out. And two, the printed money and purchases had the world to soak up the inflation and that bought us some time and now the wave is coming back to our shores and it's massive. As Rick Santelli once said, you can't print corn or rice.