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The US Government Matches Every Dollar In Tax Revenue With A Dollar In New Debt
In our attempts to simplify the comprehension of the ongoing serfdomization of the US population, we would like to present one of the more persuasive charts which the administration would likely be loath to demonstrate. Having collated monthly data from the FMS' Daily Treasury Statement on incremental tax revenues (individual, gross), and new debt issuance, we observe the following rather surprising pattern: since September 2008, or the month when capitalism collapsed, and the Fed, and ever other global Central Bank had to step in as a backstop of last recourse to the western way of life, the US government has undertaken the most peculiar matching program: simply said, for every dollar of individual tax revenue, the government has issued just over one dollar of incremental debt. In other words, in the past two years, tax revenues alone would have proven insufficient by over half to fill the budget gap. In yet other words, the US Treasury is now the functional equivalent of the entire US population and then some, when it comes to keeping the US economy afloat. From another perspective, with an average take down of roughly 50% of each recent auction by Indirect bidders, nearly a quarter (half of half) of US budget deficit needs is funded directly by foreigners. Should (in)formal trade wars escalate, and should the US see an embargo of foreign debt participation, then overnight a quarter of US spending will be unfundable: this includes such critical key expenditures as defense and social security spending. Also, it is important to recall, that of the $3.35 trillion in debt issued over the prior two year period, the Fed has directly (via UST purchases) and indirectly (via MBS purchases, and thus the forced rotation of MBS securities into UST securities for agency holders such as PIMCO) purchased the other half. Thus between foreigners, and the Fed, the US consumer's traditional contribution to funding the US economy has been diluted by half. And unfortunately, as the chart below shows, absent some dramatic deux ex machina, there is no chance this trend in which US debt issuance is the functional equivalent of taxpayer contributions, will ever end.
Another way of visualizing the incremental substitution of the US consumer with debt:
Some technical details:
- Total net debt issued since September 2008: $3,351 billion (from $10.025TR to $13.376TR)
- Gross tax receipts since September 2008: $3,185 billion. Note this is not net of refunds. Should one exclude the $660 billion in refunds issued over the same period, the net contribution by taxpayers is just over $2.5 trillion, meaning that the value of each dollar of debt issued is a quarter greater than each dollar in taxpayer revenues.
- This number would be somewhat offset by Corporate tax revenues, which over the same period amount to $440 billion gross and $230 billion net of corporate tax refunds.
In other words, with each passing day, the material contribution of the labor of Americans to their country is becoming increasingly diluted in the form of paper backed by the full faith and credit of the very country Americans live in. In this environment, it is easy to see why a chance in the tax regime, where the balance between tax revenue contributions and debt funding, is already so precarious, could have dire consequences on the American way of life. Should individual tax contributions fall off a cliff, as many contend, it means that the share of debt a portion of total US funding will have to increase from over 50% to a number materially higher, and the closer it approaches to 100%, the easier it is to make the case that the US economy is nothing but a ponzi system, in the purest definition of the word.
(this analysis completely ignores the toxic debt spiral should interest rates ever increase in the future; Zero Hedge has previously discussed the liquidity horizon to default in various scenarios should prevailing debt interest rates beging to rise. And with average outstanding debt duration slowly but surely increasing, the second the Fed loses hold of Mid and Long-Term interest rates, it is all over - in other words QE will be a necessary staple until such time as the Fed is prepared to go the repudiation/hyperinflation route).
P.S., and a scary thought, if representation is somewhat equivalent to taxation, or, its modern equivalent, deficit funding, does this mean that the seven Fed Board Members have a greater right of representation than all of American society combined? It sure seems that way.
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Sure it's a Ponzi, the sad part is noone will believe it was done on purpose. All sheep need a leader.
It's just the government going Dutch. 50/50. I don't see a problem here.
It's a BOGO! I love that shit! It's better than expected. It's not a 2-fer!
if the government can fund half, why not all? we can all just go on vacation...maybe in the Hamptons with the Blankfeins. i'll bring cheap wine and fried pies.
seriously though...can't this just go on forvever? if we can buy our own debt with monopoly money, why can't foreign governemt keep buying our debt with their own monopoly money? it is endless, and like the Fed guy said at the beginning of this financial meltdown, the Fed's balance sheet is limitless. Whoooppeee, no bad times on my horizon, just clear sailing buying SPY below 105 and selling above 110 forever and ever and ever. Amen.
The event horizon just keeps getting pushed back, again and again. I used to think "well, it'll be good when the bond market calls bullshit on these financial shenanigans and enforce some fiscal discipline". But now I'm truely afraid of what that's gonna look like.
Great Avatar Fatso. It was after Jerry died in 1995 that things really started going downhill. I think we all need to take some psychadelics to help open our minds so we can cross the threshold into a new space, preferably dark-star.
It's either that or immediately impeach Obama, because he is in a race against the clock to fuck things up so bad that there can be no return. He is desperately searching for that czar Nicholas moment.
http://www.eyewitnesstohistory.com/nicholas.htm
If you ignore the bubbles that the Fed pumps up, you could say that things have been in decline since the JFK assassination. All depends on your perspective.
No, it definitely went pearshaped after Jerry died. Ever since then Dead Heads around the world have been stumbling around in a daze chanting this song:
+1
I think it all went DH, when man invented VIAGRA. could of been around same time period as jerry's demise. the dip stick ain't working, fix the fing DIP STICK. not create first aid.
Event horizon hasnt been pushed back , we passed that along time ago. Its just taking a long time to get sucked over the edge and into the void. Its a super slow-mo blackhole in Earth Years for those of us alive during it , but historically speaking , it will be a mere spec.
Are you aware that as you approach the event horizon of a black hole, that time slows down?
Shh! You're exposing the ace-in-the-hole of econo-physics too early. "It can't happen to us because, by the laws of nature, we'll all be dead by then."
Homeowners have the option of strategic default. You just hand in your house keys and walk away. The few taxpayers left in this country may decide to hand in their citizenship and let some other sucker support the parasites.
I am. My credit score will get screwed, but it's not like I could or would borrow more anyway. With the money saved I'm going to pay off my car loan faster while stockpiling PMs and cash. I'd like to be done with the whole credit scam ASAP, and no more banking except through a credit union. No more real estate either, I don't want to ever again tie up my money in such an illiquid investment.
Walking away from the US? Good luck. Have you ever heard of "recourse" citizenship?
Almost time to get in the bunker. I hope the world will still be here when I open the hatch up again.
Get in the bunker and you loose by default. Time to get active,engage the threat, and reclaim our country! I'm seeing too many talking expatriation and hiding out till it's over. Thank God our founding fathers fought the fight (knowing if they lost, they would hang). How about enduring some hardship and changing the status quo. If we loose, we won't hang-at least, not yet...
+1776
Anyone who hides in a bunker or expatriates while patriots are dying is no better than the loyalists who ran to Canada during the revolution. That is not a personal attack on the original commenter for all I know he is just making a joke.
We should all expatriate and take up citizenship in our respective states. The federal government has lost all legitimacy, and is worse than the British crown in 1776. Either we kill the beast, or it will ruin us all.
I was born in Colorado but raised in California, of the two I would prefer Colorado citizenship.
+1. Very active politically, and my objective is to save my state, not the "union". No hard feelings towards my sister states; none should doubt my earnest, heart-felt warm sentiments towards maintaining close ties and friendly relationships with them. Perhaps we can all work independently towards re-establishing our intended system of cooperation, called the "Constitution."
Exactly right CH. The tenth ammendment exists for exactly this purpose. State sovereignty is the answer to an overreaching federal government. The sooner the general population recognizes this the better. Nullification is the legitimate tool that the founders gave us to protect against Washington's overreach.
I'm guessing by your moniker and avatar that you are a fan of Robert E. Lee and may have already seen this quote. He recognized our future if states rights were subsumed by the federal government as evidenced by this statement in a reply to Lord Acton in 1866,
"... I can only say that while I have considered the preservation of the constitutional power of the General Government to be the foundation of our peace and safety at home and abroad, I yet believe that the maintenance of the rights and authority reserved to the states and to the people, not only essential to the adjustment and balance of the general system, but the safeguard to the continuance of a free government. I consider it as the chief source of stability to our political system, whereas the consolidation of the states into one vast republic, sure to be aggressive abroad and despotic at home, will be the certain precursor of that ruin which has overwhelmed all those that have preceded it...."
http://www.lewrockwell.com/orig3/acton-lee.html
We could certainly use a few Robert E. Lee's about now. I'd fight for the Army of Virginia before the US Army, and I've never even been there. My fear is that like the rest of the entire civil service, our officer corps is so mentally and emotionally tied to their government retirements that there will be no officers of sufficient honor and stature to stand behind their respective states if the moment of truth ever comes.
It will be desperate times indeed if that question needs an answer. I should like to think that there are sufficient patriots in the armed forces that will step into the gap if necessary, as unthinkable as that circumstance may be.
A better solution I think lies with the state governors and legislatures. There is some evidence that this may actually be happening with a movement to assert state sovereignty using the ninth and tenth amendments. A majority of the states have passed resolutions regarding state sovereignty and there are currently six states that have bills pending in their government's to establish a commission or committee to review the constitutionality of federal legislation with a view toward a nullification if they are found unconstitutional. Additionally, the recent ballot initiative in Missouri and the actions of several state Attorneys General regarding ObamaCare bear this out as well. Ultimately the people can simply refuse to play the game the feds are running. This will require leadership from state politicians incentivized by their electorates to make a stand on their behalf. In my opinion Arizona governor Brewer is missing a golden opportunity to do this now regarding the border issue. She is the local commander of the Arizona National Guard and as such is authorized to call out forces for intrastate defense. Doing so would bring this issue to the forefront.
Preservation of the Union was the essential issue of the Civil War which, stated another way, was to establish if the individual states were indeed sovereign or if the federal government was the final arbiter of the law. States rights for all practical purposes died at Appomattox. It remains to be seen if they can be resurrected.
No one understood this issue of states rights more than General Lee, who declined an offer to command the Northern Army in favor of his home state (which he regarded as "his country"). In the link above to his correspondence with Lord Acton he stated his position vey well as to the importance of states rights and lived to see his opinion borne out by actions of the federal government after the war. Shortly before his death he emphasized this opinion and his regrets that his opinion had been proven true.
Quoting,
"...if I had forseen the use those people designed to make of their victory, there would have been no surrender at Appomattox, no sir, not by me. Had I seen these results of subjugation, I would have preferred to die at Appomattox with my brave men, my sword in my right hand."
For more information on the tenth amendment movement
http://www.tenthamendmentcenter.com/the-10th-amendment-movement/
Robert E. Lee has always been my favorite American, and he did get it. McClellan, Grant, Sherman, Burnsides could never even start to compare to Lee, Jackson, Longstreet and Stuart.
Crunch time will be when the dollar loses it's reserve currency status, and the federal government cannot pay its entitlements, salaries and pensions. The states will tell those still employed to stop paying the fica withholdings, and the feds will go to the states demanding money, and the states will not comply, and then it will get really interesting.
"The government of the U.S. has any and all rights which they choose to enforce in war - to take their lives, their homes, their land, their everything...war is simply unrestrained by the Constitution...to the persistent secessionist, why, death is mercy, and the quicker he or she is disposed of the better..."
- W. T. Sherman
Later, Sherman was sent to the West to subdue native Americans:
"The more Indians we can kill this year the fewer we will need to kill the next, because the more I see of the Indians the more convinced I become that they must either all be killed or be maintained as a species of pauper. Their attempts at civilization is ridiculous..."
- W. T. Sherman
sorry cutey, but Colorado has been California......ed.
I think you're right.
Ahm, which states have not been California...ed, up 'til now?
There isn't no shame of leaving your country and going back when everything gets better.
I would commend to every America to collect the things they have, and ship to Europe. Once the storm in America is over in about 10 years, you can go back and buy up land enough to start your own country.
It's now pretty much clear that America has lost the recession war. And the greedy Europeans did the right thing by keeping their fingers on their wallets. Sure they have Greece, Spain... but those where never rich to begin with. Everybody got a black eye in this war. But America also lost it's leggs and a arm.
Eh, Americans weren't much more than English expatriots.
I work with a guy who fled Iraq because Saddam murdered half of his family. Was he a coward for leaving? Sure, he could have stayed, and likely died (Saddam actually sent agents into the US to monitor the guy, along with many other prominent Iraqi refugees), and what would it have gained?
Not everyone is a fighter. Removing yourself from the tax base is a good, patriotic thing to do when your country is going down the shitter. My friend was a doctor and clinical researcher--one of the world's foremost experts on Pseudomonas, so he denied a lot of money to Saddam's government by leaving. Expatriots can also support those who remain in country either by remittances, by lobbying foreign governments for aid, or by purchasing weapons and supplies. For example, the Irish who came to America were instrumental in the Irish fight against British dominance, and eventually helped to gain Ireland sovereignty over MOST of their island again. Shin Fein probably never would have gotten off of the ground without foreign money, and certainly wouldn't have lasted for 30+ years as it did (and does).
Little do they know that they have no place to run.....yeah our country is fucked up but, if you look at it, america turning around is probably the only hope for the world, unless the young chinese actually stand up and force their government out of tyranical state. whos going to stand up against the banking oligopoly? europe? britain? I'm pretty sure it's all eye's on our country now...we are pretty much the only ones that can turn this global ship around...but, people need to call they're congressman and senators...not just call them get at least 20-30 people each person knows to call. Just found out my senator here in Florida is going to work for jpm after he resigns, about broke my monitor.I'm going to leave him A nice message about how he's going to join the institution that is destroying this country and he'll fit his spot at the den of vipers and theives. (I'm sure he knows)
but seriously if they get blasted at all levels they will listen....article 1 section 10 people, tell them to support hr 4248. I watched 2 people running for the florida senate give a speech 15 minutes long each and not thank the founding fathers...and they said not one word about our constitution...I know florida politics are bad and half the people in this state are brain dead from OC's but damn! I sometimes ask myself what would our founding fathers would say if they were here to see the sad batch of criminals we have now or the thousands of people at the FHA building begging for the handout....
If it's so easy to smuggle drugs into the U.S., maybe smugglers should smuggle guns into China.
I am afraid the battle is already lost. I would only expatriate if the US became completely facist. And with the Patriot Acts I and II, we have begun that slide.
It seems now any law can be ignored, any right violated, any lie told in the name of national security. Iraq has WMDs. The BP oil spill is contained. The dollar has value.
Individual people can be reasoned with. Groups of people who in the name of profit & ideaology have wrecked the economic system cannot. This isn't 1776 anymore. The armed forces would crush any resistance soundly, if the police do not first.
Now if you want to talk about rebuilding a better system after this one falls, that I think would be a more useful use of kilobytes.
The armed forces would crush any resistance soundly, if the police do not first.
There are nowhere near enough of them to accomplish that.
the mexican border is a warzone... and many, many miles inland... arizona isn't passing laws because it's racist... it's passing laws because it's scared as hell and it's losing/lost control.
Aside from the fact that local police forces are getting cut from the budget across the country...
Exactly! Read stories of how quick the Los Angeles police found out they were so outnumbered unprepared and outgunned during the riots.
Remember the scene in Dr.Zhivago with the worn torn soldiers coming back and meeting the replacements on the road? for the officers who wanted to continue the fight? that's what would happen here for the soldiers who would choose to fight against their own countrymen.
@ZP
"The armed forces would crush any resistance soundly, if the police do not first."
Yep, just like in Iraq and Afghanistan, the armed forces crushed the resistance.
I agree.
Do not forget, our military is almost completely US citizens, and the police the same. They some have allegiance to our "government", but not so much that they would start a massive shoot on citizens, except for rogue military or police. Some have idealism and others are pragmatic enough to know who will ultimately win. Any time spent with or in military, you will see a cross section of society, not perfectly proportional, but representative. Some psycho/sociopaths and some "true believers", but there is enough pervasive attitude of the “antiauthority” in our current society (that is also in the military) to really jam up any nationwide event using the military. Also, they do not trust Obama…or any other politician. They do not fully trust their own leaders. War takes off the shine. They can see through any bribery or threat as probably undeliverable.
My guess, splintering will cause separate "gangs" that control a localized area, but not a national organization....barring nukes.
Blackwater (Xe) could give a damn who it is paid to shoot. They showed up in New Orleans after Katrina and were not there on vaca.
10-4 on that one, Mr. Cool Hat guy.
It's important to remember that a terrifying number of the Xe goons aren't from the U.S. They're from wherever Xe can find a lot of trained soldiers who work cheap.
Central and South Americans, for the most part, won't give a dog's dick if they're shooting Americans. A lot of them would probably prefer it.
We'll shoot back. And some of us are pretty damn good at it.
You are probably right, Dr. Sandi. But I was discussing a large USA military in country of USA doing a "round-up" or whatever intervention. Mercs have many socipaths, crazies, rogues ect. in a mercenary group. The military is not all mercenary, there are "true believers" and "I just want a paycheck and school tuition if I survive this." There are all kinds.
You mean like at Kent State?
Late entry. Good point. I was suggesting in a large scale operation against civilians, there will be breakoff and splinter groups. I have no illussions about military personnel or police. I have never studied Kent state. Reading "You & the Police," I find his conclusions accurate. ALWAYS try to avoid "rouges".
"Peace Officer--great men and women, Intimidating Cop--can be common, Rogue Cop--generally, only the courtroom can help you here"
I can argue about how many percent each of the above catagories, but there is a spectrum of "types" in the military, too.
I had 8 years active duty, have been a military brat, and now have daily contact with military members and /or family. I HAVE NO ILLUSIONS, but the TPTB's prior record predicting outcomes of a plan involving the military rarely goes as planned. Chaos can be a friend.
Anyway, this is such a late post, no one will read it. The main purpose for writing it was for me to sharpen my mind and sharpen my very new skills of posting on this site.
Malek, you provoked me to think. thanks.
http://www.amazon.com/You-Police-Boston-T-Party/dp/1888766093/ref=sr_1_9?s=books&ie=UTF8&qid=1291415037&sr=1-9
Or maybe like in Chechnya? The US army may turn out to only have sensibilities at shooting at muslims since they have sponsors who have Oil; white, extremist secessionists might be a completely different story! Like Waco; The Authorties certainly did not mind making an example out of that lot.
50% down is a bad deal in a no down pmt world. The value of our govt will appreciate and we will flip it and make a fortune.
Ha!
Thanks for that chuckle.
It could be the start of a new TV network:
DGTV (Debt and Government TV)
Uncle Sugar borrowing against his VISA card to pay his mortgage.
Yeah, this will end well.
Doc.. more like taking a cash advance on the Visa to pay down the Mastercard.. :)
Even more like taking a cash advance on the Visa just to pay the interest on the Mastercard.
more like overdrafting the visa to buy some maddog and crack and fucking forget about the mastercard
and yes, crack dealers take plastic
they do???
why didn't I know this!?!?!
:p
And sign a security agreement for several generations worth of assets in the form of the entire wealth of the USA for credit at a higher and higher interest rates as the bills roll in from the previous juggling going on between VISA and Mastercard. Now they are down to Discover and American Express.
In the meantime they are trying to pay for the medicines to sedate themselves because they have lost the nerve long ago and only wish to hide in a safe place and not hear the growing roar and murmur of discontent from the main street.
"more like overdrafting the visa to buy some maddog and crack and fucking forget about the mastercard"
Best comment of the day.
(although, I would add that the visa card was stolen out of his kid's wallet)
Well I guess we whittled that to perfection!
It might take us a few go's but eventually we'll get any current social or financial occurence down to the most base, nihilistic, level of pathos that is possible (without tearing the fabric of time and space ((most of the time))).
The number of wealthy Americans living in the UK who are renouncing their US citizenship is rising rapidly as more expatriates seek to escape paying tax to the US on their worldwide income and gains and shed their “non-dom” status, accountants say. As many as 743 American expatriates made the irreversible decision to discard their passports last year, according to the US government – three times as many as in 2008. …There is a waiting list at the embassy in London for people looking to give up citizenship, with the earliest appointments in February, lawyers and accountants say. …“The big disadvantage with American citizens is they catch you on tax wherever you are in the world. If you are taxed only in the UK, you have the opportunity of keeping your money offshore tax free.”
So are we supposed to just give up and hope that whatever country you relocate to won't go insano? I say we fight the fight and retake our country!
I'm with you Getagrip. Did our fathers and grandfathers "relocate" when the Germans attacked Pearl Harbor? NO!!! But, seriously, other than voting Republican and then setting Ron Paul after the Fed and Treasury (if the R's obtain a majority in the House) - what else can we sanely do?
Well, my ancestors vacated the hell out of Ireland and Poland when shit got ugly.
I promise you that Republicans will not spearhead an anti-Fed campaign.
You do understand that there is no government - as you know it - without the Fed?
You do understand that every major corporation maintains its competitive advantage thanks to regulations and the existence of the banking system, right?
That all incumbent Republicans and Democrats maintain their system of patronage through the magic of the banking system?
I'm not sure you really want Ron Paul in office to take the fall for what's coming. Personally, I'm clapping wildly for the entire fucking thing to come down hard while the assholes are in charge. It's a better long-term strategy.
I agree. Obama is going to try to boomerang the blame to the newcomers in congress and senate and go into full deflation mode next year, to put the blame on anyone calling for fiscal responsibility.
+1
Germans attacked Pearl Harbour!! That is so funny, no, no don't stop, you are killing me!
http://www.youtube.com/watch?v=V8lT1o0sDwI
Germans attacked Pearl harbor, must have been the short ones that could fit in those japanese uniforms.
This german calls oregon home for many years and will stay and fight for it .
I have been told if i returned i would have free medical and a stipend, housing assistance and thats just from the government. Family offers as well. Still stayen. Stubborn and determined. In harmony with my neighbors i figure i got a chance to survive if they do.
Never saw "Animal House" huh?
Indeed - the young pups are betraying their youth today!
This is interesting.
But have you ever wondered how the bankers were able to replace de jure government around the world in 1933 without a hint of protest? How they stole our law and our money with little or no resistance? Clearly, their strategy of back room politics was brilliant, if sinister, allowing them to rewrite the rules without even token resistance. Well isn’t it time to apply the same principles to salvaging the Law from wickedness?
http://republicoftheunitedstates.org/
Renounce? Maybe. The U.K & the U.S allow their respective citizens to hold dual passports. American's must swear allegiance to the Queen.
Incredible. How long can this last? How will it end?
My answers; another year or two, and it will definitely end badly.
Tyler Durden
I know I saw a post on zero hedge on the 16th week of out flows of funds..
I know this is I have the link and the JPEG of the chart
I looked in your site and I had to go back to this..
http://www.zerohedge.com/article/retail-investors-dont-care-if-stocks-are-or-down-retail-just-wants-out-record-15th-weekly-ou
8/19/2010
can you tell me why you removed a thread..
padain
I ask again
Still there, it hasn't been removed:
http://www.zerohedge.com/article/16th-sequential-equity-fund-outflow-takes-total-over-50-billion-ytd-retail-boycott-stocks-co
It looks like a blow-off top in debt.
Great study.
Perhaps if the trend keeps up, the govt will stop taxing us as it will constitute such a small portion of what is needed.
If I understand it correctly, a Ponzi is a system where new real inputs are used to cover existing participants. What is it called if the inputs are not real?
When a fail-safe system fails, it fails to fail safe.
Funny, the Sun fuels all things human and never asks for debt interest on it... Just sayin'
The dude has a point.
No longer true. The Sun was bought by the Vend-A-Ray Corp. and a photon meter will shortly be afixed to everyone's head. If you don't pay it's off to the Soylent Green recycling center.
And your energy use will be measured by your size of panels to take in said sun and convert it to credits that are going to be needed by those who have not.
In essence your sunshine has been rented back to you at ever higher expense by the Government on your tax paying dime.
you imply the contradictory duality that exist at the heart of our political
philosophy and at the heart of our problem. the problem is our lack of
comprehension and appreciation of the nature of "it". the duality is
observed everywhere and in everything and in every moment and
every conscious entity and their perception/s. the two hemispheres
of the brain. two sides of the coin. the inner and the outer. above
and below, etc...
in "society" , the public sphere, the private and the public. in gender
the male and female.
someone once said make the two..... one. that could be a good start.?
a creative and self affirming, life affirming first act or birth.
Mu.
there it is .
i think we solved it.
mu to you too.
peas.
What bothers me about our Fed chairmans speech today is that the market simply failed to see through it. I know, it is often repeated here. What should have tanked the markets has sent it up by 15 points or so, the fact is that the Fed cannot do more QE even if they wanted to, there is no appetite either in the fixed income markets for it and also in the currency markets. Should the Fed embark on such a path the central banks of the world will let the dollar collapse overnight by refusing to trade dollars for their currency at any price. It may sound dramatic but the fact being that most of the debt already obviously unpayable it is hard to believe that the world will endure another round of worthless dollars being emitted into their reserves, they might just say f*** u.
QE=Perceived free money=Risk on. Look at 2009 for perspective. Besides, everything is now an FX trade derivative as the race to the bottom accelerates.
You're assuming the market wanted to hear the truth.
Remember how the population felt about TARP? They did it anyway. The sell-off in bonds was a reasonable move, imo. If the debt is already unpayable, then Ben's moves are already irrelevant. You say there is no appetite in the currency and bonds markets for printing, but I disagree. Everyone (the banks) holding the bonds of unpayable debt would like the chance to be cashed out at par by Ben so maybe they can get out of dollars and into some other asset class before the implosion. The people saying f*** u are saying it to the people.
I ask again
(snip)
Tyler Durden
I know I saw a post on zero hedge on the 16th week of out flows of funds..
I know this is I have the link and the JPEG of the chart
I looked in your site and I had to go back to this..
http://www.zerohedge.com/article/retail-investors-dont-care-if-stocks-are-or-down-retail-just-wants-out-record-15th-weekly-ou
8/19/2010
can you tell me why you removed a thread..
padain
Maybe you saw the link from somewhere else - here's the source - http://www.ici.org/research/stats/flows/flows_08_25_10 - it is indeed another week of outflows - this time both foreign and domestic.
Tyler didn't remove anything, you're just too friggin' dumb to find it....
http://www.zerohedge.com/article/16th-sequential-equity-fund-outflow-takes-total-over-50-billion-ytd-retail-boycott-stocks-co
Now STFU and go away, the grown-ups are trying to talk...
Grown-ups? Shit. I'm in the wrong place.
(tip-toes silently away...)
Oddly enough, your link opened just fine for me.
removed not.
Can't wait for this crap to blow up!
So what if for every $1 I make, I spend $2.25. There's no way this will ever catch up with me.
Debt doesn't matter, remember?
"...make the case that the US economy is nothing but a ponzi system, in the purest definition of the word..."
You don't need to wait to make this definition; you can do it now. With real incomes stagnant since the '90s ~ let alone the '70s! ~ and with continuing DISMAL real production of real wealth coupled with falling living standards, what else can you call this except...money-printing?
REPRESENTATION WITHOUT TAXATION, pay attention Ducklings. The Anti Tea Party is what you should be thinking about. How do we restore our covenant with the political class? Answer? How about some good old fashioned PROTECTIONIST legislation? How about Americans paying for America? F**k what all those central banker assholes say, what all the students of the Great Depression say, America needs a good old fashioned VERTICAL economy, and if CNBC's D-Cup brigade doesnt' like we have something VERTICAL for them ( Robot trader please supply the images)
Don't instate protectionist policies, reduce the size of government. Prior to 1913, the average yearly expendature of the government was around 2% of GDP. Today it is bordering on 40%. Free trade is the only thing keeping us alive. Sure, it's like haveing a tube in your stomach and being on a respirator, but cutting off those devices will only kill you. Better to leave them on while you exercise in your bed until you can get up and walk again.
Each night in hotel hospital is 1000 dollars billable plus other expenses and people. What was the minimum wage again? Oh yes, 7.25 for a 40 hour work week.
50 years ago Hospitals had a charge nurse, a doc and a few orderlies. No electronic anything in sight except for the iron lung perhaps and a bit of knife if necessary.
And due to the massive support of the Population being good Blood Donors you were allowed to bleed all you needed to because there was always more to replace it. Screams were free and tolerated and medication was pallitive for those not expected to survive.
reporters, a people in constant need of lowest common denominator explanations, say "defecits" for the US are running around 10%, which is bad, but not greece. They would be refering to the money borrowed expressed in GDP. The real relevant statistic always has been the federal government's defecit. We see them shuffle billions around, as they are with the food stamp program. $1 trillion is the entire mineral wealth of Afghanistan, or so they say. Yet we create that from thin air every few months. Why don't we just send a trillion there and buy the whole dam country?
this sucks
Ooh, I like it. Print $1T, buy Aghanistan, relocate the pesky indigenous population, and "problem solved". Let's take over some nice vacation destination countries that way too, like New Zealand and Portugal.
"It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change."
Charles Darwin
I intend to respond to all these "changes" by surviving.
I intend to die. The ultimate goal of life is change. But it's ultimate goal is to convert the natural fight or flight tendency to run or give up. Because that action/reaction pair is the only way to rule over, employ, and get access to peoples resources and shepard through pretending to protect something right up till you butcher it for christmas dinner.
what doesn't bend, breaks.
So break or live in bent society. When they unroll the book of life from the holy charmin roll of the king. Have a nice ass wipe.
your always just so pleasant and straight forward with your reply. i commend you for your consistency, throughout my existence on zerohedge, really, i wouldn't expect anything less then/than your jarring reactions and blunt basic bodily descriptions in/of action. delete button still G O N E.
Well all I can this will end in tears. We only have about 5-10 years before we go down USSR style 1991. The history of those day will be written in blood. This is an excellent post Tyler. Our debt is the cancer tumor that we refuse to take out in surgery. But once it overtakes the brai it will be too late to have the surgery.
The lies of “recovery” emanating from Jackson Hole are the last few paragraphs of the last chapter of the Federal Reserve’s 100-year-old Ponzi scheme developed on Jekyll Island 1910, in my opinion.
As The Economic Collapse said in Helicopter Ben Bernanke Says Everything Is Going To Be Okay:
“It is absolutely frightening that someone like Bernanke has more power over the U.S. economy than any member of Congress or even the president of the United States.”
Here’s an excerpt:
Don't worry everybody. Federal Reserve Chairman "Helicopter Ben" Bernanke says that the U.S. economy is going to be just fine, and that if it does slip up somehow the Federal Reserve is ready to rush in to the rescue. That was essentially Bernanke's message to an annual gathering of central bankers in Jackson Hole, Wyoming on Friday. Bernanke insisted that even though the Federal Reserve has already cut interest rates to historic lows it still has plenty of tools that could be used to stimulate the U.S. economy if necessary. Well, considering Bernanke's track record, the "don't worry, be happy" mantra is just not going to cut it this time. After all, if Bernanke and his team were such intellectual powerhouses the "surprise" financial crisis of 2007 and 2008 would not have caught them with their pants down. The truth is that just before the "greatest financial crisis since the Great Depression" Bernanke was telling everyone that the economy was just fine. So are we going to let him fool us again? …
[T]hese Ponzi schemes are not sustainable and they cannot last forever. ...
But for right now, Bernanke seems quite pleased with himself. The following is how Bernanke concluded his speech at Jackson Hole....
As I said at the beginning, we have come a long way, but there is still some way to travel. Together with other economic policymakers and the private sector, the Federal Reserve remains committed to playing its part to help the U.S. economy return to sustained, noninflationary growth.
In Bernanke's fantasy world, the U.S. economy is going to roar back to life and will soon be stronger than it ever has been.
But don't you believe him.
The truth is that every single month the U.S. economy is seeing large numbers of jobs leave the country.
The truth is that thanks to our exploding trade deficit, the U.S. economy is poorer at the end of every single month than it was at the beginning.
The truth is that every single month the U.S. government (along with the vast majority of state and local governments) gets even deeper into debt.
The United States economy is not on the road to prosperity. The United States economy...is slowing bleeding to death.
Ben Bernanke can run around all he wants and try to convince us that "the sky isn't falling", but at some point the American people are going to wake up and simply not believe him anymore.
http://theeconomiccollapseblog.com/archives/helicopter-ben-bernanke-says...
Was not the ultimate ponzi refresher 4 years healthcare dues without any payouts.
I think that is all that was about.. Like more people will be served without adding additional doctors. They never intend to deliver healthcare, ss or pay the deficit.
Great post.
One small point: technically it's up to Congress/POTUS/Treasury and not the Fed re repudiation.
Here's what scares the hell outta me:
That's a 195 year-old quote from Thomas Jefferson...
If QE2 is a staple until hyperinflation hits, then everything is still good, right?
When talking about Greek theatre, why do they always use Latin for Deux Ex Machina?
Genius, that! Athena. Deus Ex Machina (“God From the Machine”) to replace “In God We Trust” on Bernanke’s QEII! -- the new FRBN motto based on "the use of mechancial manipulation" of the currency, rather than a motto based on an implicit trust in the value evaluation of the currency!
Or, to go from Greek theatre to Latin to English, as Wiki puts it (as you can see, I had to look it up): "god from the machine" implies the old use of mechanical manipulation, i.e. to be made with one's hands. So if there were a more generally accurate way of translating deus ex machina into English, it would be "god from our hands" or "god that we make", implying that the device of said god is entirely artificial or conceived by man.
By George, I think you've got it, Athena!
brilliant...bonzai are you there?
http://www.bentoandstarchky.com/dec/metricsystem.htm
Romans did not even say it, it was the French who coined the phrase.
BTW does this mean we all agree that the Treasury auctions are a sham?
Obviously they are. The Fed "prints" (digitally) "money" and gives it to the big banks and certain foreign entities with the understanding that they buy Treasuries. The banks get "re-capitalized" (on paper), the US Gov't get cheap credit to continue its nonsense wars and welfare programs, and the Fed gets power over both of them.
Isn't everybody's debt to income ration 1:1? I spend what money I make on debt servicing so I can borrow money to pay for my "monthly burn rate".
I take out debt to buy my old debt to suppress the interest rate, then I borrow even more and repeat. It will never catch up to me because I plan to freeze spending by 2011 and also I am really good at making speeches and basketball.
I typed "ration" instead of "ratio" what a Freudian slip.
I have paid off or reduce all the debt I could find, I continue to do so as fast as I can so that I have no losses due to debt servicing or interest rate profeterring to other people and bankers.
I am down to two big debts, one will vanish monday and the other sometime next year. Will there still be money in the bank? Sure very little. But there will be nothing left to pay except gasoline and food plus utilities which have also been reduced through replacement of obselete money pit equiptment.
We have quit trying to commute 80 miles to work in two vehicles and now work in the same county we live in. Gasoline is not really all that necessary now. Yes life is a bit slower but we dont hide in fear from collections or worry about the pending visit to the US Post Office anymore.
Some guy posted the phrase "Incredible. How long will this last or where will it end." Or something of ths sort.
The scary thing about the chart for all you posers out there who don't really understand what you are talking about is that the correlation between borrowing is perfect at nearly 1:1. That indicates that the people who made the decision, a conscious well planned decision I may add, did so because they have a plan for "how long will this last" and "where it will end." And HOW it will end for that matter. All the signs point to a very poor direction. The ancient one. Everlasting. Wake the fuck up!! The time is short.
The FED is quickly becoming as large a cost as the deficit. By its own admission it will perhaps monetize over $300B in 2011 under its MBS rollover. This could be greater if the FED adds another long term T buy program. The FED monetization and churn in Ts must be looked at as a tax. As real as any payroll or income tax.
----------
I have been trying to come up with an equation all day, or perhaps a risk distribution relationship, to understand the real effects of unsuccessful stimulus. No matter how I try, I find myself having to use leverage to address the real costs. There is a negative growth multiplier at work here. Meaning the rate of GDP decline is not linear upon an exit of stimulus. There is an increasing rate of change at work.
Mark Beck
Lead bullets, bitchez!
I paid 15K to move to this country from Canada and it is still the free-est place on Earth, we have to strive to keep it free. F Bernanke and all the rets of these shills, don't play there game. Let the underground economy roll!
Running those figures and totaling them up for the second graph I get:
431 incr debt
387 incr ind tax reve
431/387 = 1.1137
That is the bankers ratio inverted.
"by paladin
on Sat, 08/28/2010 - 09:54
#549664
I ask again"
The problem with America in a nutshell.
Massively high self-esteem, dogged persistence, the need to be right all of the time,
and zero intelligence.
When I was in Bejing a few months ago, I met this American guys. The guy was about 50 or so and as we had some drinks, we had this discussion about the perseption of Europeans by Americans and the perception of Americans by Europeans.
Conclusion: Both think of each other as strange people, and both find themselves pretty much better then to other. No surprise here.
But he did say something that says it all:
America might not always be right.
BUT
America is never wrong!
And he really seemed to believe it. Me, I'm European, and I think we are wrong almost ALL of the time :). But because of all these discussions, only the best options remain and that's why I also believe that we'll be getting out of this crisis WAY before America will.
America doesn't look into options. There are only a few guys that decide and they only see in black and white.
Why do you think Obama and the current regime keep calling for world governance/economy? hmmm
The US defaults and says sorry.
It would be more relevant to compare consolidated federal revenues (including dedicated off-budget taxes) with consolidated federal debt (excluding intragovernmental). The ratio is better but the trend is worse.
The real killer is the demographic. That and the fact that there's nobody else out there capable of carrying the torch for the global economy when the consumers of last resort go broke. Something to remember when you're looking at how some small European countries managed to bounce back from debts in excess of 100% of GDP.
I ask again......oh never mind I forgot.
another / same old complaint.
dear whom ever cares etal....?
.
debt based monetary systems must fail when debt saturation occurs
and the holders of bad debt are rescued from their folly by the
android(false god)meme, deux ex machina, authority responsible for issuing debt
money into the system. the issuance of new debt, that basic monetary
creation function when used to satisfy old debt or rescue bad debt
is no longer a "virtuous" aspect of the system but becomes an "exponential"
vice or means of stealing money from those who have assumed the
notes have "value". apparently a mistake of even greater folly.
in music it would be like changing the time
signature, crushing twice as many notes into a measure. it changes
the nature of the composition entirely. and the heart rate....
i say "exponential" because the the "system" based on debt is not really
virtuous at the start, it is vice based and predicated on growth/expansion and
waste and consumption to deadly levels just to satisfy the interest demands
associated with servicing the parasitic class that designed the system to begin
with. the bankers.
exponential because not only does the debt system feed them from everyone
else's and
exerything's
value and labor but now the money creation aspect of their design
is being used to directly and solely bail them out of the bad speculation
losses they incurred while pumping and spilling the toxic
waste water sump into the
water supply of all of america and the world.
as has been said the normal function of money creation has been perverted.
tainted and toxified.
the new debt is not circulating through the economy as money.
it is being stolen directly before it even becomes "money".
at least bank robbers of old spent their stolen money on drink and such in
this country.
this new breed, i don't think they even pay taxes here. i guess there
are better opportunities in other proto countries/occupied lands?
not to worry, the fed has it all under control.
end the fed.! ( amygdala of the war machine ).
.
http://ahsmail.uwaterloo.ca/kin356/ltm/hippocampus_amygdala.html
I have one problem with your article. You said:
"we observe the following rather surprising pattern: since September 2008, or the month when capitalism collapsed, and the Fed, and ever other global Central Bank had to step in as a backstop of last recourse to the western way of life, the US government has undertaken the most peculiar matching program"
What happened in 2008 was not a collapse of capitalism. We have not had capitalism in this country for at least 100yrs. Our politicians call our system capitalism, but pursue a policy that is the opposite. This is how they continue along the road to serfdom. Make the people believe that freedom is the cause of their problems, and offer there solution... more control... This creates more problems... they again blame freedom (capitalism)... again they offer their solution (more control)... rinse and repeat until we are all live in mudhut and eat off a dirt floor. (This would make the eco-marxists happy) Here are a few free books to help you see the light.
Planned Chaos by Ludwig Von Mises
http://mises.org/resources/2714
The anti capitalist mentality by Ludwig Von Mises
http://mises.org/etexts/mises/anticap.asp
A Critique Of Interventionism by Ludwig Von Mises
http://mises.org/etexts/mises/critique/critique.pdf
+1000
How capitalism is going to get framed for this murder is beyond me. Everyone here longs for the system to collapse as they believe it will be the end of the elite and corrupt politicians. I'm more scared of the Marxists that will step into the void. When the currency crashes the elites will be off on some private island counting their gold. They'll let the communists destroy the rest of America and make sure that all property rights are dissolved and all guns confiscated before they come back to implement the New World Order. We live is a interesting world, as I truly believe a few of the sheeple are waking up to the fact that something is wrong, but on the other hand they are still listening to the propaganda and are going to take out their new found misery on all the wrong people.
Abolish all taxes at all levels, and replace with a fee on the use of money (no more than 0.5%, ever) on any transaction that one or both sides of the transaction is counted in USD.
$4Q * .5% = $20T, collected by Fed, FTCC, CHIPS, et al. being the trunklines of the flows of funds.
Stimulate economy by baselining per capita expenditures on social programs at $1200/month, the net of which is remitted to citizen accounts, in Valkyries (Value of Life Currency). $300M * $14.4K = $4.32T - $2.5T or so in current social spending.
$20T - $5T in gov spending, all levels = $15T = national debt go bye bye in a year or so.
Big mistake in taxation is to try to squeeze it all out of GDP.
Another big mistake is to allow IRS code to distort every industry and endeavor, let alone force anyone to disclose their personal, financial dealings with agents of a rogue government.
Another big mistake is to make taxes payable only in fraudulent bankster notes based on the coercive force of a captive, control freak government bureaucracy, enhanced with creepy human capital livestock management procedures that would make Orwell blush.
Until we begin to respect our original right, to Life, we will destroy ourselves within a debt, death and torture economy, using a currency that Satan hisself must have designed.
Tyler,
Don't worry. The UK will keep increasing its purchases of T Bonds as it has done this year.
(Begs the question, is the US buying more UK Gilts to reciprocate and make the UK Gilt issuance look better?)
DavidC
Is it definitely the UK Govt. buying them? I read a 2009 FT article saying that in the monthly statement Chinese purchases often show up as 'UK' because they use London brokers (and are quite happy for people to think they are reducing their massive hoards of Treasury holdings).
It's not as if the UK can afford to buy much of anything at the moment! Some sort of reciprocal arrangement as you suggest also sounds highly possible, though. Would be very interesting to know exactly what is going on here...
Hi MichaelG,
I don't know categorically is my answer! However, this link is interesting;
http://www.zerohedge.com/article/chairman-joint-chiefs-staff-says-nation...
'We'll buy x billion dollars' worth of yours if you buy the equivalent from us' would be a good way of making the take up look good though.
DavidC
Aha! I had a bit of a look, and the official stats from HM Treasury do appear to match up almost exactly (link below if anyone is thoroughly bored!).
I can't find the vice versa data (US holdings of UK bonds), but given all the games of pass-the-toxic-parcel being played at every level, I'd certainly not wager against your suggestion...
http://www.hm-treasury.gov.uk/d/press_08_10_reserves.pdf
Small techical point. There are only 5 Fed Governors at the moment, soon to be 4 if I recall correctly, so representation is actually far more concentrated than your post-script suggests.
Beautiful charts, too. Edward Tufte is probably proud of you.
More like for every dollar in revenue we get 20 dollars in new debt, dont forget our current and ever growing unfunded liabilities which are debt too.
Unfunded liabilities are special debt that can't be discharged because its owed to the voters, we can always stop giving foreigners and debt holders money, we cant cut benefits to citizens that vote.
Tyler,
Stats I got were Debt $1.62 per $1.00 of tax.
stockmarket bubble pop
real-estate bubble pop
bondmarket bubble pop
currency bubble pop
and then commodity bubble with
some extra for PM
will this one pop,don't know
A lot of people on this planet,needing a lot of stuff
recources are not infinite,we will see.
Just trying to be prepared
...ever..., bitches!!!!!!!!!!
Thanks Tyler for making this point. I've been making this point for months! We are spending at a pace so staggering that we would have to DOUBLE the income tax one everyone, not just the rich, immeddiately, just to break even. This truly is the road to bondage!
I think the currency created is worthless, so who cares how much of it they are creating. Ditto for the debt -- only a fool believes it will ever be paid. The continuous injection of fiat is a distraction deliberately undertaken to change the subject. We're missing something here, and I can't put my finger on it.
Tyler, the real questions may be what real resources are these dancing electrons diverting? And to where? For whom or what?
FRANKLY, AT THIS POINT I DON'T SEE THAT ANYONE IS IN CONTROL OF EVENTS ...
It's important to remember that a terrifying number of the Xe goons aren't from the U.S. They're from wherever Xe can find a lot of trained soldiers who work cheap.
Central and South Americans, for the most part, won't give a dog's dick if they're shooting Americans. A lot of them would probably prefer it.\
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I think the currency created is worthless, so who cares how much of it they are creating. Ditto for the debt -- only a fool believes it will ever be paid. The continuous injection of fiat is a distraction deliberately undertaken to change the subject. We're missing something here, and I can't put my finger on it.rip curl watch - stuhrling watches - tommy bahama watches - tommy hilfiger watch - tudor watches - zenith watches - 01 the one watches
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