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They Did What?
According to a number of news stories the Build America Bond program is
dead. It is possible that some last minute deal will be made for BABs,
but time is running out and there does not appear to be sufficient
support. This from a Reuters story:
Congressional Republicans will block any inclusion of Build America Bonds.
“We have a very firm line on BABs -- we are not going to allow them to be included," a congressional Republican aide said.
I wrote a few articles over the past few months on BABs. My
articles always trashed the program. It is just a subsidy that hides
weakness. I hate things that go in that direction.
I did all that writing because I was absolutely convinced that BABs
would be extended. There were dozens of lobbyists all over this. Wall
Street’s white spats crowd spent big bucks to get this kicked down the
road. Big states like California, New York, Texas and Illinois were
pushing their legislators hard.
It wasn’t the political muscle that lead me to believe that BABs would
be extended. I saw it as a critical component in municipal finance. If
it was eliminated I thought we could quickly evolve into a crisis with
certain states debt. I was by no means alone in that observation. This
comment from the rag for the muni market, The Bond Buyer:
If the
Build America Bond program expires at the end of this year, long-term
tax-exempt bonds could lose their latest pillar of support.
Parts of me want to be proved right about the significance of this
development. I am one of those who thinks there is too much debt
creation at the governmental level. Well, it just got more difficult for
munis to borrow. By itself, that will curb debt creation.
There is another part of me that is saying “gulp”. By definition,
you do not see a black swan in advance. I did not see this at all. I
don’t count, but the market does. If you follow markets you now have to
have a screen for muni pricing. As this sorts out over the next 60 to 90
days the muni market might drive the global markets.
I’m thinking to myself, “How could they have blundered on this?”
They extend the Bush cuts for everyone. They tack on another 120b of
deficit spending with a cut in SS taxes. And they throw in another year
of unemployment checks. They threw the sink at the economy at the sake
of the deficit. But they failed to pass BABs? Knuckle heads. If there is
a hiccup that takes a big state out of the market for a spell it will
trump the economic benefits of all the new deficit spending. It might do
it a few times over.
Links to my prior posts on BABs:
Here, here and here
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Yep. Since 2000, the economy has inflated 30%. The US population has gone up 10%. CA state spending has d--- near gone up 275%. Somebody is stealing the rake-off here and farting through silk.
Agreed
DUH!
You ever consider that the fascist wizards behind all the many curtains just may want the USSA to fail?
Cui Bono!
"There are no markets anymore, just interventions."
WTH maybe some of this waste at local level needs cutting . When EPA decides to change arsenic levels limit from 50 parts per billion (ppb) down to 10 PPB then a city close by to me has to shut down their wells , and buy surface water from the biggest city in the state at much more cost and maintenance. Because without any proof they (EPA) think its safer this way ! Or my little city likes to waste monies on pet projects that few ever notice and even fewer benefit from but some city father wants , but this city leader wants it. There is a lot of waste and alot of unfunded mandates that need to be squeezed out of municipalities
WTH maybe some of this waste at local level needs cutting . When EPA decides to change arcnic levels limit from 50 parts per billion (ppb) down to 10 PPB then a city close by to me has to shut down their wells , and buy surface water from the biggest city in the state at much more cost and maintenance. Because without any proof they (EPA) think its safer this way ! Or my little city likes to waste monies on pet projects that few ever notice and even fewer benefit from but some city father wants , but this city leader wants it. There is a lot of waste and alot of unfunded mandates that need to be squeezed out of municipalities
thats it exactly, ultimately big money wants the economy to fail in order to force the sell (er, fire sale) of the public wealth at todays distressed prices for tomorrows inflated dollars. federal buildings, post offices, public lands, etc will all be on the auction block to the highest cash bidder.
hide and watch when the debt gets big enough, the big idea of putting public wealth into private hands becomes the flavor of the day.
I'd like to buy a small distressed library ...
Oh wait, I'd need some real money to do that, damn.
How will they pay, and through what market will they pay, to buy these assets if the economy fails or collapses? It seems counterintuitive to say anyone who hopes to survive such a collapse would actually want it to happen.
My guess is that's exactly what the "new SDR" debate is all about.
I am only speculating, however.
It's a worthwhile thought experiment to perform: Imagine the world 100 years in the future. What will be money then?
We will return to a non-fiat backed currency... it may be world wide, a combination of many countries, a single world power, or incredibly fragmented among the world's sovereigns... who knows. But, one thing is for certain... it will not be pure fiat. We are all bearing witness to the changing of the guard.
Now, 200+ years into the future... we'll be right back in the same boat... albeit less likely, to be in as large of a bubble (have to give us old timers enough time to die and our warnings along with us). The allure of credit is far in excess of our discipline to deny it.
They will pay with the spoils of the wealth gap. They will pay with ethereal dollars (that the government devalues with reckless abandon, yes, the government) and, in return, obtain real assets. In short, they are already aware of the REAL value of the dollar and seek to convert them before the rest of us catch on. Once converted, the inflation/deflation debate is largely irrelevant... if you control the land, you control the means of future production, regardless of how small they may be.
You buy during collapse, while there's blood on the streets... Hence the need for a controlled demolition. Another way of putting it is a controlled transfer. Everything doesn't just become distressed at once...
Not unlike the break-up of the USSR. He who has the most guns wins the right to produce. This could get ugly.
Perhaps you can buy all of the assets you'll need post collapse immediately before it goes down?
Sell public lands to pay off debt denominated in money we CREATE OUT OF THIN AIR..?!
HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA
(sniff)
HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA
Selling the public lands in the US would be the ultimate tragedy. Not saying it won't happen.
California sold a portfolio of its office buildings.
"We" don't create Dollars out of thin air. The Federal Reserve System does. The Private banking cartel who owns them would love to get title to USA Public resources (lands, infrastructure, etc.) at fire sale prices.
Think the IMF raids on busted Latin American sovereigns, think the Oligarch & Wall Street raids on the busted USSR, and I think you will see the picture the author is attempting to convey.
I'm assuming when referring to the Federal Reserve System, you are also including the member banks. Commercial banks, under the fractional reserve banking system, also create money out of thin air when they loan money. This is obviously how most money comes into existence.
And if they run out of land, they can invade another country and sell their land to!
LEBENSRAUM BITCHEZ!!
No mo BABS?
this looks like a job for.......DEFLATION BITCHEZ!!
What are you laughing at?
Hasn't your little corner of the world been visited a few times?
And may be again before this all plays out. Hope your PM's were paid in cash, no receipts, and are buried deep. Ground penetrating radar can go a couple of meters.