• Steve H. Hanke
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Guest Post: EXTEND & PRETEND: Stage I Comes to an End! The Dog Ate my Report Card

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Thu, 07/08/2010 - 17:22 | 459273 Crisismode
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I suspect the Federal Reserve and White House Administration are now convinced that without further massive stimulus, the US economy is headed into a deflationary depression.

 

You suspect?

My take is that it's a dead certainty.

 

Thu, 07/08/2010 - 18:39 | 459475 doublethink
doublethink's picture

 

Blame The Chinese Yuan!

 

(Reuters) - The U.S. Treasury Department again declined to label China a currency manipulator in a long-delayed report issued late on Thursday that is likely to provoke Congressional calls for tougher methods with Beijing.

 

http://www.reuters.com/article/idUSTRE6675LE20100708

 

Thu, 07/08/2010 - 18:52 | 459506 Ripped Chunk
Ripped Chunk's picture

+!

Yes, blame others instead of the banksters and "corporate titans" 

Thu, 07/08/2010 - 20:58 | 459705 Bear
Bear's picture

You are wrong.

Men are greedy ... All men will attempt to maximize their (influence, power, wealth, etc.) ... the fix we are now in was created when the natural greed of business (wealth) allied with the natural greed of political leaders (power) leading to the repeal of Glass-Steagall in 1999 fueled by the natural greed (influence) of Greenspan.

The Banksters and Corporate Titans were only doing what they are paid to do ... maximize profit. The political leaders who did not uphold their oaths failed us:

I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States    Clinton, Bush I and II, and Obama

I do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God


Thu, 07/08/2010 - 22:06 | 459813 pan-the-ist
pan-the-ist's picture

All men are not greedy. Most people are content and want to be left alone.  They probably don't travel in your circle but that doesn't mean they don't exist.  Most people I know want to be treated fairly by their car dealer and their government.  Most people expect that when they put money into their retirement some fucking greedy banskter won't be trying to take it.  Some people are scammers, chiselers, takers, criminals.  Don't project yourself on other people and then generalize.

Thu, 07/08/2010 - 22:45 | 459853 Boilermaker
Boilermaker's picture

Amen brother.  I don't need to be rich.  I just need to be able to provide and, hopefully, in a comfortable fashion.  I'm always amazed at those that would literally kick an old lady in her toothless gums for an extra dollar.  Ironically and sadly, it's normally those that need it the least.

Fri, 07/09/2010 - 01:59 | 460016 Bear
Bear's picture

You are right (I overstated) not all men seek power, influence, or wealth, but most will try to optimize their circumstances and when given a job to do will try to do it well. I think the banksters did (and are still doing) a good job optimizing their circumstances, i.e. maximizing the profits of BAC, C, GS, JPM, etc. But that is my point ... They should be restricted from doing the job of extracting the cumulative savings of generations of Americans by those we elected to protect us from enemies foreign and domestic. It's our leaders who failed us.

 

Fri, 07/09/2010 - 09:13 | 460250 Chump
Chump's picture

"Its our leaders who failed us."

Ponder that statement.

Who really failed?  Who fell for the promises that could never be kept?  Who desired freedom from the responsibility of thinking and acting for themselves?

Put another way, how did those leaders achieve power for years on end in the first place?

There are a lot of places to point fingers, but we first have to point the finger at ourselves and move out from there.

Thu, 07/08/2010 - 19:22 | 459566 AssFire
AssFire's picture

Deflationary Depression??? End of Day's??

Whhooaa, I just wanted to know who LeBron picked.

Thu, 07/08/2010 - 19:40 | 459598 papaswamp
papaswamp's picture

If he is smart he will pick FL...no income tax here

Thu, 07/08/2010 - 19:49 | 459615 Boilermaker
Boilermaker's picture

That's true!  Of course, it's also the worst real estate market in the US...but...

Thu, 07/08/2010 - 22:07 | 459814 pan-the-ist
pan-the-ist's picture

He'll be buying low.

Thu, 07/08/2010 - 20:16 | 459645 Rusty Shorts
Rusty Shorts's picture

 - xcuse me for butting in here, but I think everyone should see this.

Market Manipulation On Display

http://www.youtube.com/watch?v=xOr5suFJ6-k

 

Thu, 07/08/2010 - 20:46 | 459683 DocLogo
DocLogo's picture

wow, great video... does that happen with all stocks, etc?

Thu, 07/08/2010 - 21:40 | 459772 -1Delta
-1Delta's picture

thx... sleep well

Thu, 07/08/2010 - 20:50 | 459691 B9K9
B9K9's picture

I just love these types of hyperbole laced missives; true tin-foil stuff. Look guys & gals, life is much more mundane. It doesn't take Hollywood flash & boom to kill people. In fact, people die everyday from the most ordinary circumstances.

Absent insane systems like Nazi Germany, Imperial Japan and/or Stalinist Russia engaged in existential wars, governments have very little power in the way of guiding markets. If the Fed & fed.gov were so powerful, then why bother with all the MSM green-shoots blather and PPT market manipulation? I mean, why hassle bluffing & puffing if you've actually got the cards?

Ben was fighting a short-term deflationary event. All he had in turn was short-term monetary tools & techniques (QE, swaps, etc) combined with short-term government fiscal measures (ie Keynes). Extend & pretend was really all about extending & pretending until some new long-term economic miracle/driver came up.

But there is no miracle forthcoming, hence we are now going to experience a long-term deflationary depression. Blowing up the $USD doesn't buy you anything - it's the same exact end result as default, but with a more pissed off populace.

Obamacare was the high-water mark of this administration. Once the meme starts getting passed around that austerity will collapse the federal government, this is going to become a key selling point come November.

Hussein is an affirmative-action quota boy. Unlike dirty SOBs like Nixon & Clinton who really, really wanted the job and were willing to do anything to get it, this guy is wondering why he even accepted the position offered to him by Goldman. What's in it for him? Pussy? No, not right now. So, screw it.

We are now rudderless. There isn't going to be any radical announcement or movement by this administration. The Dems in DC have reached a collective acceptance that Nov will determine our/their fate. So expect more drift & malaise as we progress through summer & near fall.

Like I said above regarding Hollywood explosions, we don't need any excitement to get us where we are going. We're going there regardless - it's already baked in - now we proceed.

Thu, 07/08/2010 - 17:26 | 459282 anony
anony's picture

Only crazy, insane, and criminal classes enter politics in the first place because they really can't do anything productive in the private sector.

Ergo, if the definition of insanity is expecting different results, by doing the same thing repeatedly, the only possible next step would be?

Stage II, of course.

See your trillion, and raise you two more. 

Thu, 07/08/2010 - 18:41 | 459478 traderjoe
traderjoe's picture

The only part about your comment that I disagree with is the first one. Politics is a fantastic career path - great perks, prestige, speaking engagements, not really much work (per se), very little oversight, can retire early and be a talking head, etc. I'm not in it, but I can see the attraction for the self-indulgent. 

Thu, 07/08/2010 - 17:27 | 459288 wiskeyrunner
wiskeyrunner's picture

If they don't extend unemployment benifits the people will go nuts and lash out. I think they will extend them we are in a no growth economy, we can't just let these people starve while bankers buy new 30k watches.

Thu, 07/08/2010 - 18:14 | 459412 cossack55
cossack55's picture

Sure we can.  Its called Darwinism.  We have a history of it. 

Thu, 07/08/2010 - 19:56 | 459628 Rusticus
Rusticus's picture

If it were Darwinism the TBTF banks would have gone the way of T Rex.

Thu, 07/08/2010 - 18:35 | 459468 Eally Ucked
Eally Ucked's picture

Of course they have to delay revolt by extending all those benefits. But whatever they do has the same end. There is no more space for little guys to borrow and feed the so called "service economy". Until 07 they were using HELOCS to fund their purchases, housing never goes down mentality is finished for now and there is no other cash cow around.

Printing is good for a while but at some point it will work in opposite direction. For now they are trying to use policy that you have to be positive about economy and future and spend those ever diminishing dollars, at least, at the slurpees joint, this keeps economy going?

What is really left of US economy, corn, Apple phones and military spending funded by borrowed money. That oil spill will cause much more damage to US than everybody thinks.

Thu, 07/08/2010 - 18:42 | 459482 Boilermaker
Boilermaker's picture

Uhhh...iphones are made in China but "designed" in the US.

Thu, 07/08/2010 - 21:58 | 459803 suckapump
suckapump's picture

The gulf oil spill that was initially stated as 1000 barrels per day has been revised upwards faster than the oil can reach the surface. It now appears to be north of 100,000 barrels per day. A 100 percent miss is about in line with the miss on how many jobs the American Recovery and Reinvestment Act of 2009 (ARRA) was going to create.

Not to be too much of a stickler for math, but 1,000 -> 100,000 is a factor of 100, which equates to a 10,000% error. But hey, what are a few orders of magnitude between friends, right?

Thu, 07/08/2010 - 17:29 | 459293 wiskeyrunner
wiskeyrunner's picture

As we near the election I suspect now the Obama has kissed and made up with Israel the stock market may put on a show.

Thu, 07/08/2010 - 17:31 | 459301 SilverIsKing
SilverIsKing's picture

What would LeBron do?

Thu, 07/08/2010 - 18:15 | 459417 JLee2027
JLee2027's picture

Go to Miami of course.

Thu, 07/08/2010 - 17:31 | 459303 Ned Zeppelin
Ned Zeppelin's picture

"The government must find an excuse to push another $5T (minimum) into the US economy.

I suspect the Federal Reserve and White House Administration are now convinced that without further massive stimulus, the US economy is headed into a deflationary depression."

Yep.

Thu, 07/08/2010 - 17:34 | 459307 centerline
centerline's picture

Great post.  Thank you.

Thu, 07/08/2010 - 17:34 | 459311 doomandbloom
doomandbloom's picture

the dog ate my stress test too...

Thu, 07/08/2010 - 17:37 | 459319 gridlocked
gridlocked's picture

Im pretty sure we have over 1,000 overseas

military bases now and many of those countries

don't want us there.

Thu, 07/08/2010 - 17:44 | 459342 still kicking
still kicking's picture

really 1,000?  try maybe 50

Thu, 07/08/2010 - 18:03 | 459385 Teaser
Teaser's picture

Al Gore invented this wonderful device that some of use all the time.  We call it the "interwebs".  Really, it's a set of tubes that Al Gore constructed that connects companies, governments and even individual homes!  What you do, is you use "The Google"  or "The Bing", you write down your question, and put it in the tube and away it goes.  Then, you get a whole lot of answers back!  Then, you have to read.  Reading is HARD, but worth it.  And the next time you see Al Gore, if he's not in prison, thank him for the greatest invention ever!

 

Officially the Pentagon counts 865 base sites, but this notoriously unreliable number omits all our bases in Iraq (likely over 100) and Afghanistan (80 and counting), among many other well-known and secretive bases.

 

from http://www.fpif.org/articles/too_many_overseas_bases

Thu, 07/08/2010 - 18:14 | 459414 RingToneDeaf
RingToneDeaf's picture

I think it is closer to 1,000 maybe more.

It all depends upon how they are counted.

Google it, I was surprised.

Now how many countries have US bases?

Try 135 countries with US bases. Again how big does a base have to be to be counted?

 

Thu, 07/08/2010 - 18:22 | 459432 gmrpeabody
gmrpeabody's picture

It has to have at least 1 guy giving orders, and at least 1 guy following ordes. That sounds like a base to me.

Thu, 07/08/2010 - 19:27 | 459578 tasmandevil
tasmandevil's picture

plus one john wayne or james dean or james brown not john travolta

Thu, 07/08/2010 - 20:30 | 459662 Harry Bender
Harry Bender's picture

Or just one Chuck Norris...

Thu, 07/08/2010 - 18:20 | 459428 DosZap
DosZap's picture

Personally I think we need to close down ALL but the VERY most essential.

Japan has wanted us out,for years...........good...get the FO.

Germany also...............

South Korea.......same.(nuke umbrella covers there, from anywhere).NK, get's too frisky, Neutron......

Protect yourselves Bitches.(no need to be there, Nuke umbrella extends globally for US, and allies.)

Just these, have cost us  Trillions over the last 60yrs.

Fri, 07/09/2010 - 01:06 | 459982 still kicking
still kicking's picture

I did look it up and I stand by my number (i'm a little over at 50) those small outposts are not true bases.  It's like trying to claim the dollar store is the equivalent of the mall.

Thu, 07/08/2010 - 17:40 | 459335 Shameful
Shameful's picture

90 days is a bold statement.  I mean Americans love to watch videos of people getting killed from the air, but they better manufacture a good reason.  Maybe a photo set of Ahmadinejad killing and eating Bat Boy.

"Bat Boy dead, America mounts bold new offensive"

 

Thu, 07/08/2010 - 20:25 | 459655 spinone
spinone's picture

+10.  I love Bat Boy references

Thu, 07/08/2010 - 20:32 | 459664 Harry Bender
Harry Bender's picture

+20 same here

Thu, 07/08/2010 - 22:38 | 459845 StychoKiller
StychoKiller's picture

"Two-headed Baby Kills Own Mother!"

Thu, 07/08/2010 - 17:48 | 459350 P-K4
P-K4's picture

The leadership is failing miserably and all they can do is prescribe more Viagra (stimulus)... it reminds me of the old addage "(Richard) for brains."

Thu, 07/08/2010 - 17:48 | 459351 no life
no life's picture

FUBAR

Thu, 07/08/2010 - 18:15 | 459415 poopdeville
poopdeville's picture

SNAFU

Thu, 07/08/2010 - 17:52 | 459357 binky
binky's picture

From alternet.org

 

The total of America's military bases in other people's countries in 2005, according to official sources, was 737. Reflecting massive deployments to Iraq and the pursuit of President Bush's strategy of preemptive war, the trend line for numbers of overseas bases continues to go up.

 

original story -- http://www.alternet.org/story/47998

Thu, 07/08/2010 - 17:59 | 459379 still kicking
still kicking's picture

The details go on to specify 38 large and medium sized bases.  The hundreds of small outposts in Afganistan and Iraq probably make up most of the other 699 small bases.

Thu, 07/08/2010 - 20:51 | 459698 DocLogo
DocLogo's picture

It's not the size of the base that counts, it's the girth of the bombs

Thu, 07/08/2010 - 18:04 | 459393 Teaser
Teaser's picture

Make sure you thank Al Gore for the Interwebs you used to glean that valuable information!  He spent a lot of time building all these tubes, in between chasing skirts.  How the man ever did it all boggles the mind!

Do NOT follow this link or you will be banned from the site!