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Our Government Is Like a Plumber Trying to Fill the Bathtub by Pouring in More and More Water ... Without Plugging the Drain
The government is deploying all of its equipment to rescue the economy.
But rather than fixing the economy, the equipment is just getting swallowed up.
Why?
Ben Bernanke's answer to all of the water running out of the bathtub (high unemployment, falling home prices, slow growth, etc.) is to pour more and more water (easy money) into the tub (quantitative easing, zero percent interest rates, etc.)
Similarly, Geithner and Obama and Congress can throw all of the money at the giant banks through direct and hidden bailouts that they like, but - until the hole is plugged - nothing they do will work.
The water will just keep running away.
What's the hole that is swallowing up the economy? The failure to follow the rule of law.
The rule of law is what provides trust in our economy, which is essential for a stable economy.
The rule of law is the basis for our social contract. Indeed, it is the basis for our submission to the power of the state.
We are supposed to be a nation of laws, not of men. That's what humanity has fought for ever since we forced the king to sign the Magna Carta.
Indeed, lawlessness - the failure to enforce the rule of law - is dragging the world economy down into the abyss.
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Vampy wrote:
Someone has to kep rolling over the excessive $100billion a month debt.
Who wants to roll over $100billion plus a month?
I assume you are referring, at least partially, to the $600 billion deal the Fed worked with the Treasury.
It is my understanding that this $600 billion does not increase our debt - either debt held by the public or intragovernmental holdings.
The Fed, apparently, can run up its own debt, infinitely.
We already roll over the $13 trillion of debt every year anyway.
What's another $100 billlion a month?
I assume that merely rolls over the Fed's negative account.
Someone please correct me, if I am mistaken.
Don Levit
new futures on comex...
http://www.theonion.com/articles/chicago-mercantile-exchange-selling-rain-futures,18402/
old but still worth watching...
http://videosift.com/video/Lake-Peigneur-disappearing-lake?fromdupe=Louisiana-Sink-Hole-Drains-Entire-Lake and this...
http://beforeitsnews.com/story/246/280/The_Television_Commercial_About_The_National_Debt_That_Is_Being_Banned_By_Major_Networks.html
....just plug the damn hole.....
"....that's what she said..."
"...i think we need a bigger plug..."
less like water more like sacrificial blood. maybe just blood in the water?
Helicopter Ben may not be Keynesian in every sense but his promiscuous discount window and QE follow one principal of Keynes to perfection: In chapter 23 of his General Theory, ol' Maynard cites a passage from Malthus describing how productive investments will gradually erode profit margins. Keynes' and Malthus' solution: a society must consciously invest in (Malthus' words) "unproductive consumption of landlords and capitalists." On this matter, Bernanke is more Keynesian than any of his predecessors.
The more things change the more they stay the same,
Big financial crises are usually followed by big criminal convictions. Charles Keating became the face of the Savings and Loan crisis in the 1980s, just as Michael Milken symbolized the collapse of the junk-bond market later that decade. In the early 2000s, WorldCom's Bernie Ebbers and Enron's Jeffrey Skilling were imprisoned for their roles in accounting frauds.
Nearly three years after the greatest financial collapse in 80 years, there have been no similar landmark convictions, with the notable exception of Ponzi schemer Bernard Madoff. At the heart of prosecutors' conundrum: Bankers may have been foolhardy, rash or even unethical. But, in doing so, did they commit any crimes?
http://online.wsj.com/article/SB10001424052748704229004575371272225626284.html
From years past.
The Keating Five were five United States Senators accused of corruption in 1989, igniting a major political scandal as part of the larger Savings and Loan crisis of the late 1980s and early 1990s. The five senators, Alan Cranston (Democrat of California), Dennis DeConcini (Democrat of Arizona), John Glenn (Democrat of Ohio), John McCain (Republican of Arizona), and Donald W. Riegle, Jr. (Democrat of Michigan), were accused of improperly intervening in 1987 on behalf of Charles H. Keating, Jr., chairman of the Lincoln Savings and Loan Association, which was the target of a regulatory investigation by the Federal Home Loan Bank Board (FHLBB). The FHLBB subsequently backed off taking action against Lincoln
Using art to convey is still tops in a multi-media rich environment
http://www.youtube.com/watch?v=R56qgreCRhQ
Then I hope you will approve of my November V post, Miles, particularly the mix job ;-)
Even better than my here to fore favorite on this classic concept .. Talk about macro v micro viewpoints Best -
http://www.economist.com/printedition/displayCover.cfm?url=/images/20090...
oh. my. god.
this got me harder than 50 mg of viagra (h/t max keiser)
http://www.youtube.com/watch?v=Wa0CS6I48e4
The guy mentions that he sold the box 5 months ago. But what a sight to behold, I was almost expecting it to look like a treasure chest inside, with the bullion lying loose inside!
A lot of people are worried about the price of silver. When I look at silver, I think about what its price will be in whatever replaces the dollar. We can hope something good comes from all the crises, right? Like the end of the Fed and return of sound money?
http://psychonews.site90.net
The story of obama going to India this saturday...
is more of the same... blow the free money..
Your not buying the $200 million a day crap are you?
Not that I care one way or the other, just like to see truth told.
Helicopter Ben is unleashing his weapons upon the world. Who are we kidding? Here are the results of the money drop.
1) China is going to have more inflation from commodities surging and the dollar peg. Whatever wealth is there will soon be eaten away.
2) Countries on the verge of default will be pushed closer. They are now priced out of exports to the US and China will undercut them. Europe and Japan are in this boat. Europe most likely will force a PIIGS country to default and leave the Eurozone. The Euro crashes and the dollar spikes.
3) Someone has to keep rolling over the excessive US gov't debt. Who want to roll over $100 billion+ a month?
4) Wall Street got what they wanted, free money. If everyone is on one side of the trade though it will go the opposite. In this case, market crash wiping out the smaller investors at expense of the big boys.