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Visualizing An Austere Europe
With the euro collapsing, all of Europe is on the brink, and as a result, every European country has now instituted some form of austerity measures. Hereby, we summarize what these look like to date. Unfortunately, we are confident the current batch of austerity will be materially insufficient with many more rounds of cutbacks to come. Looking across the Atlantic, the US has yet to initiate any reductions in its gargantuan budget deficit or governmental spending. And as can be seen its metrics are just as bad if not worse than most of Europe. Use this chart to get a sense of what the initial round of US austerity, when it strikes, will look like.
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Awesome work! The chart is coming out of my printer now.
If the math works the same here as in Europe, well, things look pretty bad in the near future.
As the process of revolution in the affairs of western finance & governance continues.
The ends..of so many
http://www.youtube.com/watch?v=JYMaBvU3V_8
mk...your body of work is impressive, thank you.
Beyond the suffering is hope. This clusterfuck will pass
and the hope will be for leadership. From here on the
west coast to Tennessee.... grace and peace.
You speak of my body of work. Wow. Amazing that anyone would look, at least it is amazing to me. Once I fly my kites I release them. Have a wonderful evening and thanx for the pat in passing. peace
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Very true. Great stuff, thanks, Tyler!
Don't forget that Europeans know that their money CANNOT be endlessly printed, they remember what happens then. More austerity (read DEFLATION) coming.
As an example, see the Weimar-remembrance panic gold-buying in Germany and Austria during last week.
So to all the geniuses who are shorting the euro and betting on gold AFTER the move: good luck, because ...
(1) the shot across the bow puts enormous pressure on the EU political elite, they know it's austerity or disaster. They WILL NOT abandon their euro (and therewith their EU integration) project that they have worked for their whole professional life, just because it's fashionable right now to say so;
(2) most euro-countries have laws pending that will make primary budget deficits unconstitutional (on a national level, in Germany including the "laender");
(3) the low euro gives an enormous boost to Germany's (and France's to a lesser extent) export-oriented capital goods sector;
(4) no one seems to realize hat everyone is on the same side of the boat: expect a euro short squeeze (maybe an epic one) and a "surprise" gold pullback, once the newby gold buyers who came in at $1250 start panicking;
(5) yes, Greece is a write-off, the 30-40% haircut will come, when the French and Swiss banks can handle it (within the next six months); the resulting currency destruction will tend to make the euro stronger.
Let's see how the $2tn debt roll-over plus new $2tn new debt work out over the next 12 months. That's $4tn, friends, for those who care to count the trillions. Is the printing press an option, when average maturity is 4 years? Probably not.
Anybody want to bet that we will not talk about these $4tn (plus some major states going bust or near-bust) over the next few weeks and months? Will the "flight to safety" into the dollar continue, or will we talk about the euro as a reserve currency again, as we did on November 2009?
The european education systems have been teaching marxist, zero-sum game mishmash for a few generations, so the installed software in every european's head won't accept any useful measures of austerity for any length of time. They'll bang their sippy cups like the childish dependents they've become, striking, reversing governments in favor of more demagogical types. Count on it.
It seems like you really know Europe. Or not.
You are completely wrong. Europeans know that this is a matter of survival.
The "surprise" will come when Americans refuse to pay higher taxes (e.g. VAT) and austerity becomes an impossibility because of an out-of-control health care sector (despite delivering one of the lowest life expectancies in the developed world).
There is a simple solution to solve the healthcare crisis:
Lower the pay for doctors. They make way too much.
Or eliminate the health tax that Americans are paying to their "private" insurance companies, which are nothing other than government-like bureaucrats pushing paper without adding any value. Americans get the worst of both worlds: a bloated healthcare system AND the worst healthcare bureaucracy in the world. Who is world number 1 in denied procedures again?The U.S. by a long shot; and who denies? The "private" insurance monopolists who absurdly make more money the worse people are in shape ... hmm, and what does it cost?
The healthcare tax paid to the bureaucratic monopolists called "health insurance companies" stands at 30% at the moment. That's a good point to start to lower actual taxes and increase efficiency. What is Medicare's overhead? 1-2%. How many people do you know who don't like Medicare? I rest my case.
About Europe: Europeans know that this is a matter of survival. They are implementing constitutional limits, the countries behind the curve will get a brutal dose of deflation overseen by the new European Monetary Fund (or whatever they will call it), funded by euro members only.
I agree.
Not only that, but Medicare already covers the most expensive/risky people - the senior citizens.
Yes. And that at the lowest cost.
However, the upside-down logic perpetuated by the lobbyists and the CNBC (corporate nonsense broadcasting corp) anchors has been deeply ingrained in the population. Like a host thinking he needs the parasite for survival, people think they need the paper-shuffling insurance types.
The numbers:
In 2008, 31% of U.S. health care cost, or $715 bn, or 5% of U.S. GDP, went to health care ADMINISTRATIVE costs. In other words to a non value-adding, purely paper-pushing activity. Hello Soviet Union.
And: lower doctors' pay yes, but lower their tuition, tort claims, overhead (created by the insurance bureaucrats, i.e. "insurance specialists" who work "for" the doctor and make as much net as the doctor), and their other cost, too.
Result: deflation here we come. This is the inevitable outcome.
Most folks forget that no matter public or private health insurance decisions as to availability & pricing will always be made by some Twinkie eating bureaucrat. The only question that influences the process is which way the cost/benefit analysis flows.
The process is determined by the rules of the game set by the government.
Why does an antibiotic from Pfizer cost 25 euros in a private French pharmacy and the identical box 250 dollars at CVS??
Why are American insurance companies offering private policies in France? Not to make a profit? Hmm, how does all of this actually work ... let me ask CNBC to "learn" something.
Physician income is less than 20% of health care expenditures.
Educate thyself.
it would make more sense to start by reducing the prescriptions for psychotropic medication and taxing the junk products (palm oil, corn syrup) and forcing those who have obesity related diseases to eat a healthy diet. The obesity crisis in the US is the most unnecessary health crisis in the history of the world and yet most Americans seem to blind to see...
Just legalize it and of course tax it. Safer and more effective than pharma pychotropics.
Or, for instant psychotherapy, just take a hit of acid with a shaman type guide. I guarantee you will face your demons.
Just legalize it and of course tax it. Safer and more effective than pharma pychotropics.
Or, for instant psychotherapy, just take a hit of acid with a shaman type guide. I guarantee you will face your demons.
Riiiight. Let me get this straight. I took out $300,000 in loans to work 90 hours a week and make $50,000 a year as a resident for 6 years...and I'm overpaid. Physicians are among the most productive members of our society, and we provide an absolutlely necessary and socially redeeming service at well below market prices. It seems to me you might better apply the word overpaid to any banker, lawyer, plumber or unionized worker anywhere in the world. Wait...nevermind....I take it back...you would better use "overpaid" to describe just about anyone who has an education and works anywhere in the world. No matter, when TSHTF and doctors start charging market prices for their services you will see what overpaid looks like. Want a preview? It looks like idiots like you being priced out of the market. For those with means it looks like you will be liquidating a large portion of your estate to fix that broken leg...because without me you're never walking again. How many people in the US can fix that compound fracture youre suffering with? Around 750. How many can do whatever bullshit job you do? I'm guessing just about anyone. Youre so stupid I can't believe you read a website like ZH...matter of fact I can't believe you read at all.
The AMA ensures that the number of doctors in this country per capita is strictly regulated. Outsourcing is also highly controlled as compared to manufacturing. Its not surprising that you pay them high salaries but for the most part the quality is high too (or so has been my experience).
Great post btw..terrific chart...
"It seems like you really know Europe. Or not." Oh, just lived and worked over there for 11 years, got a couple of degrees over there, did business all over, traveled all over, extensively. Stuff like that. Most of the population harbors typically fantastical beliefs you find on the left anywhere you go. Belief in central planning. Belief that corporations and rich can pay the bills. Belief that you can "share" jobs by, oh, moving working hours from 39 to 35 per week(at the same pay). Belief that jobs can be saved by making it just about impossible to fire people. Belief you can regulate anything into good working order if just you apply willpower. Good intentions matter far more than good results. I could go on, and on, and on.....In French if you prefer that language. The Europeans in crisis will revert to form, by identifying scapegoats, internal and external, who have little or nothing to do with their problems. Demagogues will figure out which chords resonate, and they'll bang away on those notes.
You mean we have something completely different here in the US?
Reply in French if you wish ;-) je te repondrai en italien.
So our folks will be happy to pay 19.6% VAT (TVA). They don't feel entitled? Over 20% unemployment if you use the same metrics as in France. Don't mix up "no delusions" with "different delusions". Like rolling over and creating $4 trillion debt in the next 12 months (i.e. 30% of GDP) with a shrinking tax base. The cuts are coming and I can see the headlines.
The bottom line is, in a deflation everyone suffers and must give up something, because there is no other way out. That, mon ami, will eventually be understood everywhere, after some street protests, especially in France, or Italy. It will not go easily here either when austerity will come to the US. After a monetary crash or before, the result will be the same. Here and there.
I was going to write something about TB being an ignorant prick, and how wrong he is, blah, blah, blah. But I just can't be bothered. But TB still seems like a delusional ignorant prick.
Vai a fare in culo.
Taxes in the age of the Printing Press serve two purposes:
1) perceived equal re-distribution of wealth
2) price control
I wonder you waste your time replying to TBT. No matter how long he lived in Europe as he clearly had blinkers on his eyes all over the time.
Cutting doctor pay isn't the solution.
In New York City, there's already been one major hospital closure - St. Vincent's. Every contact that I have in the medical profession complains about late payment from Medicare.
Sorry, the government fails to pay its checks on time, it requires too much from hospitals, and there's too much red tape and liability.
Increasingly, the best doctors are heading overseas, building themselves a mansion, and evading their medical debt.
Ready to die, baby boomers? Hope you like your "free health care."
Kiss-kiss.
To the "always something or somebody elses fault" crowd, the answer is get healthy. Americans are unhealthy and represent a costly "conclussion." Dr's paid to much? Not even on the radar screen as part of the proper solution.
Our problem? Overpopulation, birth rates being driven by the poorest, least educated and most vulnerable. That and no consequences for the largest employer being the Government.
Its called for profit healthcare. When you put the profits and interests of corporations above the interests of a countries citizenry you shouldn't be surpised by the results.
This isnt complicated!
That said, at the end of the day we all have to take personal responsibility for our own well being. For example, the obesity problem is definitely a huge problem as are cigarettes (cancer sticks) How is it that tobacco companies have not been litigated into oblivion? You can thank the government for that one.
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TBT,
It is certainly a daunting task but please keep trying to explain it to the simple statists who post here. Whether is is health care or water service, there are some who continue to believe that the government will do a better job of delivery and can do it for free. It has never worked that way anywhere. It will be interresting to locate the admirers of Hugo Chavez when that poor experiment in disaster hits bottom.
I'd rather TBF until the next round of deflation is done.
Jaybaybaker:
"It seems like you really know Europe. Or not.
You are completely wrong. Europeans know that this is a matter of survival."
Fundamental misunderstanding.
There is no such body as 'Europeans'. In the course of my career I have lived and worked in just about every country in Europe, and I have never once heard anybody describe themselves as a 'European' first and foremost. German yes. French yes. Austrian yes. Spanish yes....and so on, you get the point. European....no. Not even when I worked in Brussels, the supposed heart of Europe.
There is no 'European People' except in the parasitic and self-interested mind of the Euro 'Elite' who are trying (and failing) to force this ridiculous construct upon a fragmented cultural and political inheritance that goes back millennia.
Simply put, when push comes to shove, the sovereign nations of Europe will look inward and focus on the survival of their own people first. They always have, and they always will.
Within reason, some hardship on behalf of foreigners will be borne, partly out of a sense of solidarity with other countries and peoples, but mostly out of a self-interested fear of economic repercussions to the banking system and export industries. Merkel and Sarkozy have already stepped beyond these limits, as the electoral catastrophe that Merkel suffered last week in North-Rhine Westphalia illustrates. The Germans are not finished yet, as awareness grows that they have been sold out by their own political class, expect rising nationalism to dominate the political debate there.
No, there is no love among the people of European countries for the Euro or indeed the supranational institutions cobbled together by the Eurocrats over the heads of the people, and people will not suffer on their behalf.
Wish our leadership would take care everyday Americans.
You have no idea what you're talking about.
Appreciate your posts, jayjay. You and Mako (and probably others) are getting junked for gold bashing, but you guys are expecting the excrement to hit the fan in a way that deflates all assets. Not unreasonable in my estimation. How are you positioned to survive it?
http://newsfrom1930.blogspot.com/
You can figure it out from there.
Btw, love that book "Good to Great".
Hopefully you do recognize the irony :-)
In the 30s the USD was devalued relative to gold.... although we are no longer on the gold standard this is clearly happening yet again in terms of relative purchasing power over the past ten years. In the 30s if one retained the ability to eat and pay the taxes/expenses/loan on the hard assets in possession, those hard assets became the foundation of wealth after the dislocation. Gold isn't necesarily the best bridge from one era to the next (no productive capacity or income), but I'm not sure it's fair to say it won't be a store of value.
Did the sequel "Why Settle for Great when you can be Fabulous" get released yet? That book should be AWESOME!
The printing press is our saviour, no austerity needed here, let expend at the cost of the rest of the world.
Its called coinage its the US end game to (attemp) conquering the world.
The math isn't exactly the same in the US as the EU for a number of reasons, chief reason is the ability of the US to export T-Bills, right now EU's govts (germany being the exception) are gradually losing thier status (downgrades etc.). There are other tools that the US has that arent' afforded to individual countries in the EU, of course ease of movement in central banking is one, QE is another, unification, etc.
Europe is in dire straights and is unlikely to exit for quite sometime, in relationship to the US I would surmise their aboooout 2-3 years behind the US in economic developments.
PS -I'd buy European straw hats next winter if you know what i mean.
Europe has one huge advantage over the US. Eurozone have 14-16% saving rates and thus dont depend on outside world for deficits funding. Moreover, eurozone is still the biggest manufacturer and exporter in the world and the weak euro is boosting export, thus helping offset the austerity measures.
Austerity is clearly a joke. Looks like the Germans are the only ones that come close to telling the truth in their stats. Notice everyone else assumes projected budget deficits will drop, but Germany predicts rises.
LOL
If EMU states start re-issuing "local" currencies (as some expect) theirs will be the only one worth anything.
Math really sucks.The reality is inescapable.
Currency FAIL.But everyone knows this...and yet it totters on.
Why?One currency to be implemented.That would be some trick.As it is the Euro and the Dollar are doomed.The real question is what will happen after they do.It will be an opportunity for positive change..but it will not be easy.And that's an understatement!
Planned austerity measures are indeed a joke. Politicians will draw up all sorts of grandiose ideas but few will achieve their goals. It being a depression, for every expense cut, 3 more "urgent" expenditures will appear. You can bet one expense will skyrocket in the next year - personal security for govt officials.
Gosh, I thought I misunderstood the chart when I saw the huge - Deficit Change...
It wasn't until I read your comment that I realized they were actually projecting deficit reductions.
Austerity for thee
but not for me
fx swaps for free
have a bond or three
Love it!
Rahm and the Bamster, together with Pelosi and Reid, are working by the FDR playbook: Use the crisis to permanently grow the reach and power of the central government. Thus the talk of VAT and tax increases, inspite of the proven fact that increasing taxes reduces government revenues, usually.
Definitely not a proven fact.
It can't be a fact, since it's pretty easy to demonstrate that going from zero tax to something positive will generate revenues.
It is correct that delta(revenue)/delta(tax) declines, and turns negative at some point.
It is not known whether the US is at a point where it's negative, my guess is almost certainly not.
Negative, at least in my case. I just cashed out my shares in my company and am withdrawing from the system. Based on the fact that more, more, yet more was going to be taken to support people who get vacation at my expense, I have decided to opt out. Retire. Stop playing the game. Live on what I've saved. Buy real estate. Buy gold. Stop working.
But then again, who is John Galt? Obviously nobody important. He doesn't matter much. We can get along without him.
Europe has millions of John Galts who don't even know they are doing it, call them Jean & Jeanne Gault. The higher taxes and high regulations and incentives and rules against work have millions of potentially creative and industrious people idling, or worse. But this is not a short term thing that you can just turn off and on. It has been going on for a long while and the effects are baked in: In the medical sector, the best young minds haven't been going there for decades, thanks to the awful conditions and pay, and this despite the absence of lawsuit culture, and despite the "free" medical schools. See, after you've gotten your "free" medical school training, they tell you where you'l; and how you'll practice and at what prices. Plenty of Jean and Jeanne Gault might have become great doctors, but chose not to. Lots of medical positions are therefore filled by foreign born people for whom the low take home pay and bad working conditions are still an improvement over what they could enjoy in their home countries. This will be the result in the U.S. too, once a nationalised healthcare system begins treating the individuals who make every key decision in it, there where the patient is, like bastards. Health care is a hyperlocal activity, taylored to the situation, punctually, and yet we have eggheads and power hungry freaks looking to make such decisions at the highest possible level.
What the ...uck are you talking about dude? My wife is a medical professional here in Europe, and what the ...uck are you on about? This is not the first idiot post from you today. Straighten up and fly right.
Now you have to explain yourself.
Sorry, he's just not making any sense. I was annoyed, should just let it slide, just seems nonsense posts are on the increase here at the hedge.
I agree. I just wanted a critical commentary so I could compare and contrast.
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First off, talking from France, doctors can, if they want to, ask whatever amount of money they think is fit. Many doctors do,and many (most) don't. So that it should normally cost me 23 euros each time I go to the doctor. But in fact, if I choose a doctor who doesn't fix his own price, all I have to do is pull out my green SS card and I don't have to pay anything, because the social security pays around 70% of it, and the healthcare package paid by my company (well, indirectly by me) takes care of the rest. Same thing for medication.
The french doctors are still among the best practitioners in the world, I have no problem about that. The french system allows everyone to benefit from high quality health care, which wasn't the case so far in the US.
And I'm not talking about the swedish system, with schools like Karolinska Institute which ranks among the best in the world.
BTW, the social security is costly, but we can handle it no problem, at least for now. The real problem is the aging populations in western countries. It translates to higher SS costs, as old people cost a lot more than the rest of us, and exponentially increasing costs of retirement. The active population ca no longer handle the retirement costs of the past generation. That's what is making our debts explode, not social security or other governmental programs per se.
http://www.bis.org/publ/work300.pdf The future of public debt : prospects and implications
And reducing costs helps but it's not going to save us. What needs to be done is increase the taxes of the older generation, because they are usually wealthier (they don't have to pay for their children or their house anymore, and they spend less than the active population), more costly and the aging pyramid of ages is such that the current system, in which the younger generation pays the retirement of their parents, can no longer hold.
If someone is unlucky (stupid) enough to work in the public sector, then true,collections will generally increase, for everyone else it's the magical disappearing income. Since the public sector is now so large, the curve has probably shifted upwards somewhat, but supporting even a JennyCraig sized Government on gruel is not going to work too well.
What, you aren't paying any taxes?
Tax rates were already set to give maximum return. Institution new taxes will do nothing but halt the "recovery" (if there ever was such a thing), and force a lot of people out of business. Marginal industries will be wiped out. Marginal earners will lose their jobs. Etc etc.
The US is already the most taxed society in the Western World. More taxes will break the back of this economy, and it will be a hundred years before we recover, absent a revolution.
"It is not known whether the US is at a point where it's negative, my guess is almost certainly not."
We're past that point.
Obama has actually assembled a bi-partisan group to discuss austerity measures. I am not saying it will get done nor am I saying that it will work, but regardless, the truth is that it is in the works. They won't start anything until after November, of course, but that's prudence.
If you think about it, TPTB can only suggest austerity from a 'leftist'. If a 'conservative' suggested it, they liberals would rise up against it. They might anyway and Obama might be a one term president, but he is the perfect tool for austerity.
I'd bet that he'll be impeached if California or New York get heavily downgraded. Those are the only places that matter in the propaganda machine.
That will be the stress test on the nation. As a Midwesterner there is no way in hell I will pay for bailouts of either of those states.
but you're cool with the never ending "bailout" of the banks? Remember, 5 states make up about 40% of the U.S. GDP and California and New York are 2 of those. I'd rather a state get bailed out (with changes of of course - we all know CA has made big mistakes) and people still get fed and children receive education...
I'm not really cool with that either. If the coasts fell off of the country, the Midwest would do just fine, thanks. But yes, a chicken in every pot. (And I am also against subsidised farming... don't get me started on that.)
Not sure how much of the midwestern farming/economy relies on the coasts, but I know it does to whatever extent. Reagrdless, seeing as how almost 20% of the population lives in those 2 states, your nonchalant comments about their fates with everything happening right now that should spark the "there's no way in hell!" attitude, seems perverse to me.
I don't think I am alone. If the red states and the Midwest have to bail out the blue states it might end in civil war.
I do agree. My point is only that I wish we could rise up now...together.
+100
That kind of talk makes you a racist teabagger.
Where the fuck does he mention any kind of race? So now if someone has a different opinon than you they're a (((racist)))? Hilarious
It's that exactly. If you go outside on a sunny day and hold up a sign that gives the impression you are not happy with the status quo you probably don't like Barry. And the MSM portrays that as racism and fear-mongering. They sent kids home that wore an American flag to school on Cinco de Mayo and hispanic students staged walkouts. WTF? Check out this poll. Safety of the students?
http://www.foxnews.com/opinion/2010/05/06/american-flag-banned-america/
Duuuude,
I am stunned by the results of that poll. OMFreakingG.
Pan-the-ist
You mean Jesusland
http://en.wikipedia.org/wiki/Jesusland_map
That "never ending bailout" of the banks was repaid some time ago. It was effective in halting the bank runs. It is the continuing support of the "political" financial entities that is continuing to drain the govt.
I'll take the over on the projected deficits for Greece, Portugal, etc. Governments are pathological liars.
Yeah me also, hold up, ill take a 3 team parlay, ah forget it, just give me a 5 team round robin..
Wow... And I'm guessing that $2,250 that the US rolls does not even include the unofficial debt that is still backed by the full faith...
Wow Greeze is really cracking down,
stop using sattelite imagery to locate renegade tax dodging back yard swimming pools.
But will they bring in enough revenue to break even on the helicopter flights?
Own (or have some sort of controlling interest of) any property built on Greek land?
We will have to wait for the bond market to give the middle finger to the USA, and that day is coming soon. The question is, will it be a deflationary collapse or Zimbabwe?
We will have a "Zimbabwe" situation, where inflation will rapidly grow. We have passed the point of no return and now committed to a global redistribution of wealth.
Ya it sucks. US had reserve currency, most oil was traded in dollars and now even if the US where to magically be able to continue controlling oil and reserve currency the drop in oil production will implode the system anyway. All the killing and bullying for nothing.
Hey Heph, I have been trying to reconcile your point of view with the following:
1. The suggestion that there is more oil than 'they' say there is (Drillers are more concerned about there being enough oxygen to burn.)
2. The idea that we are in the middle east to keep oil prices high.
3. That high oil prices are artificial and caused by speculation.
I agree that if gas went back up over $4 a gallon, the USA would be f***ed. I am not sure which point of view is the correct one.
1. Drillers are laughably wrong.
2. wrong again
3. wrong a 3rd time...trifecta for you!
Oil has peaked...that's pretty much the long and the short of it. The OCS doesn't contain enough SUPPLY to materially affect anything
Hi Trav-
I wasn't saying that I was supporting that point of view, just pointing out that it existed.
Well it's chemistry. Carbohydrates-Hydrocarbons. The potential for oil "production" through the chemistry is enormous but it doesn't all work out just right.
Our control over oil is an attempt to control the natural flow of wealth. Money is an abastraction of energy be it human or natural resources. America had gold and attempted to get oil for cheap by putting it's swap spread into every transaction involving oil. It's a leech model. Everyones strength gets leeched constantly by it's incessant blood funnel. People are not focusing on what is important. Oil producing countries are attempting to "revolt" and use any other currency as oil money. They are being hammered relentlessly by america's military machine which is nothing more than gang violence.
Once oil goes up gold goes up. They tried to HFT up the price of oil and keep gold low. You can't do that. You can't work with these forces. You can't spend a 100 gallons an hour in thousands of blackhawk helicopters while simultaneously making american's feel "bad" about using energy. Fuck that. It's going to tear itself apart.
Zimbabwe was a deflationary collapse, a complete and utter one.
The whole inflation or deflation debate is just a red herring, perpetuated by the 'money managers' to obfuscate the situation.
The value of the Zimbabwe dollar deflated to 0. The granaries were empty, the mines shut down, people slaughtering their breeding stock for food. Capital was completely consumed.
I saw a chart from NYT re how much the PIIGS owe each other as well as the main players in Euroland. FRANCE looked most on the hook re holding PIIGS debt.
Tyler! Could you add a similar column for France? Or anyone else comment?
Maybe in the end it does not matter, because I think we are ALL going to get hosed.
Yeah, USD is much better than the Euro...
Add up all the gold those countries have compared to even the pretend amount the US claims to have. I would much rather place my bet on the Euro making the hard changes now with lots of gold to back it up versus the extend and pretend USD.
Epic Euro short squeeze coming this week.
So all public servants will get paycuts...
I CAN LIVE WITH THAT!
They should actually fire 50% of them. These services are totally outdated and unefficient.
If I would run my company like they run public services, it would be in chapter 11 and 7 in 12 months!
If you want efficient services from government live in a dictatorship since that is the US business model. sheesh.
Following your advice we should sell private shares in the DOD and DOJ since that would enhance their independence and make them more "efficient". roflmao
Well said, since that's about how things have gone for the last two generations.
DOD, DOJ, SEC, pick your favorite alphabet agency......they've all been up for sale for quite some time, just not on an open market.
Hacks get hold of Senate/Rep seats and hang on to them forever; before long they're millionaires and the bidders who get to run these agencies as a result are completely beholden to them (i.e., no real internal investigations, political witchhunts that alternate polarity every 8 years, general waste of time and public money as everyone in DC gets richer). Gee, ya think there's some purchasing been happening?
True privatization would be cleaner, clearer, and yes, more efficient.
I disagree, in the worst way. The reintroduction of infinitely focused chains of responsibility will work far better than the continuation through hybridizing our current dictatorial government (governing via non disclosed Executive Orders) with the pure subjugation of the whole of society through the total submission of social power to the corporations.
In essence, your solution is treason to the constitution and the bill of rights, not an advancement of or even a return to the same. Pure and simple. Treason is no excuse for more of that nonsense!
One decision maker is essential to the operation of a business, but it is disastrous to a constitutional republic. There is at least one area of agreement between the successful operations of a corporation and constitutional republic. That is in the requirement for a strong do, check & review process. It appears that this much needed process has broken down rather badly in both major corporations and government. Any bureaucracy detests the concept of clearly defined and ruthlessly enforced chains of responsibility.
Let us have justice!
http://www.youtube.com/watch?v=QzIT67dBkSc
No, they should fire 100% of them and then let the private sector do the same jobs at 1/3rd or half the costs!
hahahahahaha
Private security contractors, 250K per year, mostly tax fee, for now (more stupidity, global national tax collection). A Special Forces Master sergeant with 20 years experience 50K a year. Get a clue! Mercenaries running the country .. Hell, that's what we have now. Fool!
If I may add, contractors are getting "cost+" contracts as well. I don't call that efficient? I call that theft! I'd call it a crime, but apparently our laws currently allow for this insanity.
No doubt! Frederic Bastiat spoke eloquently 160 years ago about the subjects of lawful plunder & false philanthropy. We have it now .. in spades. Resolution, not restructuring is the key. Too bad the concentration of private plunder now control the organs of society, regardless of whatever color one wishes to assign them.
http://bastiat.org/en/the_law.html
Isn't that because of the status quo?
No Wings, this one is designed specifically to circumvent the limits on the size of the military and to make our war fighting irreparably depended upon those whose only loyalty is to "shareholders" and more importantly, bond holders rather than the nation and its laws. So we pay folks 100K a year to scramble eggs, $50.00 for a case of soda, 250K to a private gun toter and trillions to support bond & swap holders all to say some other account is being kept low. It is all just faith based governance. Smoke & mirrors. Lawful plunder. During a time of war many of these activities were considered treasonous previously. A fine example of what happens when state power becomes subordinated to concentrated private money power.
To answer you directly, this reminds me of the arguments from the 1980's when pay parity between the private & military sectors was all the rage. Not hearing that any more... what folks seem to be saying is that it is better to have these essential organs of state power in private hands because it is a bigger rip off and provides for even less accountability than we presently enjoy. Some folks don't know how they are getting screwed because they never bother to look beyond their last scoop of banana flavored gerber.
We are in the midst of the most radical changes made to western governance in many years. The status quo, regardless of whatever color we assign it is ever changing and attempting to expand and centralize power all at the expense of the micro. The real reason this ever shifting status quo will collapse. The macro cannot survive and thrive without the micro doing the same and vis a vis.
Screen Some Rot
"Privatization" is generally a cover for budget... increases.
There's no such thing as a "private" prison for holding dope-dealers that relies on externalizing costs to the bond market, the taxpayer, and Mr. Bernanke. Your typical Xe thug is just an overweight ex-Spec Ops on babysitting duty. But it's the only adequate retirement plan for a typical soldier battered by PTSD, barely employable in a gutted private sector.
Look to post-Soviet Russia. They'll make a burlesque of the law in the name of "privatization." Just be agile in responding to it. The post-apocalyptic mutants have needs to be met, and there will be profit in doing so.
That's a pretty succinct way of putting it - my thoughts were in that direction, but how to articulate them?
Yeah, and "treason". What a dusty, cobbed-web word these days - unthinkable with a growing number of Americans that consider the Constitution an old piece of paper with leadership incapable of intentionally doing harm - just a series of accidents, blame games, and "bold" initiatives to "reform".
O: "Let me be clear..."
"... my Depends need adjusting". So adopted by Joint Proclamation during the State of the Union address, January 2010.
While the real reason behind Justice Alito's grimace is made plain (as size XXXL fails its load test). No word on a signing statement or regulatory impact.
What units are the top line in? I.e., percent of what? GDP? or budget itself?
UK is worse than Portugal..... no? PUGS?
I read somewhere that the U.S. has implemented austerity measures. Congress agreed to a future goal that Pelosi's executive assistant's administrative assistant's assistant will now be flying coach class...more often then previously anticipated.
and his Butlers Butler?
Where is the cell in the U.S. column indicating the promised savings from the health-care reform act (and it is an act).
As a reminder, last month the U.S. government caused physician's revenue to be cut by more than 20%, initially on Medicare, but imminently on all contracts as they are based on Medicare. The insurance companies have more money, and thus own more, and more powerful, politicians than the doctors do.
Same as it ever was.
http://www.google.com/url?q=http://s0.ilike.com/play%23Talking%2BHeads:Once%2BIn%2BA%2BLifetime:12611:s1966557.8512896.1798.0.2.108%252Cstd_ee7a0174d1bb47a69c2a2ffc443cd7c1&ei=AynvS6nnCY7usgOljcW4Dw&sa=X&oi=music_play_track&resnum=1&ct=result&cd=2&ved=0CBMQ0wQoADAA&usg=AFQjCNGbYsKZreo0PbuMwBlcz0WUzl7eKg
Most excellent chart that can come alive and be blown up to a wall chart! I agree the more data the better..whack France, Germany and Japan on there and the do a comparison with the US at the Federal level AND at the state level, so we can get some idea of whether Arizona = Greece and California = Italy!
Last time I checked California wasn't sitting on 2,000 tons of gold.
1906! all had to go somewhere! it held at Fort Knox..i guess no state owns it now.
oops sorry...didnt spot you were long Euros from an earlier post. Ok, so your view is that the Euro should stay strong because it has more gold backing it than the US does? Ok let see how up to date we can get this:
from http://www.grissoms.com/goldfaq.php
3. How much gold is there in the world?
At the end of 2001, it is estimated that all the gold ever mined amounts to about 145,000 tons.
6. Who owns the most gold?If we take national gold reserves, then most gold is owned by the USA followed by Germany and the IMF. If we include jewellery ownership, then India is the largest repository of gold in terms of total gold within the national boundaries. In terms of personal ownership, it is not known who owns the most, but is possibly a member of a ruling royal family in the East.
8. How much new gold is produced per year?In 2001, mine production amounted to 2,604 tonnes, or 67% of total gold demand in that year.
and from Wiki (sorry all I could find quickly)
http://en.wikipedia.org/wiki/Gold_reserve
The USA (with 8,135 tonnes of gold worth around 360 billion dollars) had only slightly less than the combined european countries as at 31 december 2009.
Not sure that using gold as some sort of insurance is worth much if the average for the (300 million) country leaves them with just 1200 bucks each!
When you factor debts and assets (cards, pay day loans, underwater houses, kaput businesses that folks pulled loans out to try to save, savings, stocks, etc.), I wonder how much the average american is worth these days? Wonder if 1200 bucks would do it?
If you count it all it is a zero sum game, fractional influences aside which always charge a hefty premium.
http://www.youtube.com/watch?v=gNbm5nALkF0
Do foodstamps count as assets? My guess is average is negative NW.
Hooligan2009
Ever read this?
http://www.marketskeptics.com/2009/08/us-exported-5000-metric-tonnes-of-...
Saturday, August 29, 20090diggsdigg
US Exported 5000 Metric Tonnes Of "Gold Compounds" Over Last Two Years
"I took special note of how 2,920 metric tonnes of “Gold Compounds” had been exported from the U.S. in 2008. This number seemed BIGGER than BIG – because the U.S is only alleged to have stockpiles of sovereign gold of 8,100 metric tonnes while annual U.S. mine production of gold is roughly 228 metric tonnes. This figure of 2,920 metric tonnes is equal to 36 % of all alleged sovereign U.S. gold stocks or more than 14 times annual U.S. gold mine production. So, I was left wondering, “just what is/are ‘gold compounds’?
I contacted the USGS and queried a qualified individual [who had working knowledge of this data stream] about the definition of “Gold Compounds”. I was told that, according to the U.S. Census Bureau – who supplies not only the definition but the actual reported numbers, gold compounds were typified by industrial type products containing low percentages/amounts of actual gold content – like gold paint.
...
My reaction: US has exported 5000 metric tonnes of "gold compounds" over the last two years
1) 2,920 metric tonnes of "Gold Compounds" had been exported from the U.S. in 2008.
2) The U.S is only alleged to have stockpiles of sovereign gold of 8,100 metric tonnes while annual U.S. mine production of gold is roughly 228 metric tonnes.
3) 2,920 metric tonnes is equal to 36% of all alleged sovereign U.S. gold stocks or more than 14 times annual U.S. gold mine production.
4) An individual for the USGS agreed that the data, as published, did not make logical sense and explained that the U.S. Census Bureau was questioned as to the veracity of this particular line item in their data.
5) The U.S. Census Bureau is assigning an astronomically high value to these goods.
6) The values being reported would be more in line with these goods being gold bullion or equivalents.
7) foregoing data and discussion with the USGS individual is proof that the United States of America has surreptitiously exported physical gold - and continues to do so.
8) Public acknowledgement of these gold exports would scream like a siren call that the global financial community has totally lost faith in American financial stewardship
9) Over the course of 2007 / 2008 - more than 5,000 metric tonnes of "Gold Compounds" have been exported from the United States of America representing more than 62 % of reported sovereign U.S. gold reserves or about 24 times annual U.S. mine production.
10) No credible audit of the Sovereign U.S. Gold Reserve will EVER be allowed - because the gold is simply not there."
Ok..this is beyond my knowledge. Are the measurements for gold compounds in gold ounce equivalent? Is gold paint mostly gold? Did US exports just boom in the 2007/8 compared to previous years? Did Iraq have lots of gold? Has the US been an agent for passing through middle eastern gold so it can be sold for gold compounds? questions questions and thanks for taking the time to reply. It all helps!
You make a fair point about it isnt that much.
However, at least the PIGS (not Ireland) have at least some gold reserves. The states do not even have that. In fact, they basically own nothing except their own tax receipts, I guess.
Common sense tells me not to believe the US gold reserves since they (to my knowledge) have not been audited in around 30 years. I have a hard time believing any financial numbers the US (courtesy of the Fed Reserve) try to make us believe.
My main point is the EU countries are in better relative shape than the US. Simply because the US believes they don't have to account for their (our) massive deficit since they are the reserve currency.
I am not long the Euro and don't even have 1 Euro to my name. I just believe the current move in the DXY is due to a herd mentality versus the Euro really having little long term value, in comparison to the USD.
I am betting (through SP calls) that it will reverse shortly.
Most of my positions still consist of gold/silver/miners/USD/physical, regardless.
I think the IMF values gold at $47 an ounce if Wiki is right too. I agree that numbers are best viewed in volume rather than value and that even though it is our gold, our government is quite willing to lie to us about almost anything they think we are too stupid to know about. Oh and apologies for mis-reading your book! I have been guilty of talking my own book rather than implementing the stop loss at point of trade, more than once heh.
There are also cooperative preschools. There are not a lot of them around. In a nutshell the school runs solely with the involvement of a teacher and parents. If you are available and would like to be a part of your child's first-school experience, check one out. One that I know of is St. Matthew's Cooperative preschool for 3 to 5 years olds in South Miami.
Austin Food delivery
Sure it is. The gold just happens to be locked up in rocks underground or buried in stream beds, protected by eco-nazis and defenders of pristine wilderness, salmanders, owls and other critters, that prevent California from digging, panning, and mining its way back to being "The Golden State".
Gold extraction from mineral resources can be done ecologically and in an environmentally friendly way.
Good luck with those austerity measures in the UK. The unions still have massive power in the UK and can paralyse the country if needed. The politicians have also lost the moral highground because of the MP's exspense's fiasco of 2009. When you add that to the fact that this parliament will have the highest number of millionaires and ex city folks, which will only serve to alienate the UK electorate even more. I can only see serious problems with all this.
There's a lot of dischord between the private sector and the public sector with regards to pay and pensions being much better in the public sector, yet with the private sector footing the bill.
Add the huge public outcry over the bailing out of the banks and the obscene pay packages of the bankers, and you have one hell of an explosive mixture.
The fuse is well and truly lit.
Second side note:
Most European workers are protected by the inflation index.
Now that the euro is going down do much, it only need oil to go up to push inflation even higher which is now already at 2.1 since januari.
At 3% all wages are index inflationary adjusted. First in government jobs followd by privat companies. Austerity measures? Costs will even rise!!
It's the law! :)
It's good to be... european...
pensions are capped at 5% (LPI)...inflation is currently 4.4% in the uk (RPI not CPI, which is c.3%).. European Harmonised Index of Consumer Prices excludes all real inflation (like house prices) soooooo...europeans are linked to inflation up to a certain point only.
wages follow the consumer price index and national health index. It beats me what that is all about, but that is still below 3%.
lol the french have government inflation bonds that exclude (or was it include) cigarette price inflation!
Jim Sinclair’s Commentary
There is no country or currency that can survive the wrath of an attack on their debt, the foundation of value, by credit default swaps. None.
Furthermore, all major currencies will all be attacked over the next 24 months.
US just waiting around to copy ideas that work. No change there then :-o
WOW, so little said so much of the meaning, priceless.
For everything else, there is a government credit card. (for how long?)
We need "Austerity For Dummies" - badly....
The US does not understand the meaning of austerity. It is filled with obese people with an entitlement mentality. The US deficits and debt speaks volumes. Even though the public sector is totally funded by the private sector, our leaders do not understand that when the private sector is shrinking, the public sector has to cut back too. But our leaders pontificate on bankrupt keyensian ideas of spending more borrowed money to solved a problem created by borrowed money.
This can only end badly. Most citizens who have a clue are already arming themselves because when the entitled masses discover that their funding is cut, they will resort to voilence to get what they are "owed".
sounds exactly like a PIIGSUK'er to me then! :)
Focused austerity is just like focused QE. One more sorry assed attempt at manipulating capital formation and flows simply to feed the ponzi beast. The ever greater poison that is restructuring without resolution. As the situation deteriorates to the point where the current centers of power must exert their influence without artifice. And until these centers of power change, the song will remain the same with ever greater emaciation, destruction and eventual loss of these very engines of sustainable capital formation and growth.
Fools!
Future articles in the Ladies Home Journal - "Dynamite Dinner Parties on Food Stamp Cuisine" and "Home Decorating For Your Station Wagon/SUV" and not to be forgotten: "Rioting Etiquette - How To Avoid Embarassing Mistakes"...
I can only imagine what Cosmo and the girls of page 3 will come up with.
Rupert, care to shed any light for us?
You should not dump on Food stamp cusine, my brother. One who shops with his/her card and a reasonably well-informed consumer zeal can do well on $200 per month as a single person. Families with favorably endowed Heads can eat divinely on food stamps. Of course, that ain't the norm, but who ever said (besides most everybody I ever knew) that life is fair?
The program is a legitimate "Keynesian" stimulus, though, imo.
Gold, Bitches! though.
No. It is ADM, Monsanto and Wal Mart stimulus there Bob.
I know, but folks ain't dyin' yet. Live and let live . . . while that is still an option.
Living is the only real option, even as countless numbers of our fellows are being hauled off in body bags. - JAFO
http://www.youtube.com/watch?v=L1swnkVPZX0
Dying does not seem to be a bad option in matters of honor. Would one wish to die some other way?
Hope it doesn't come to that for me but. It's a crazy world.
Q - General, how is it that you can keep so serene and stay so utterly insensible with a storm of shells and bullets raining about your head?
A - My belief teaches me to feel as safe in battle as in bed. I do not concern myself with dying, but to always ready whenever it may overtake me. This is a way folks should live. This way everyone would be equally brave.
Paraphrasing Thomas Jackson at the battle of Manassas.
We're agreed, perhaps: It's how you die that matters.
I choose to believe that it is the way we live that matters. Death is the termination of the process of living, not the epitome of it.
As an equation, it's irrefutable.
The difficult variable seems to be the period of history we inhabit wrt the amplitude of critical issues of the times and that good ole problem of what it's all about.
Que sera, sera.
For each and every damn one of us.
:)
http://www.youtube.com/watch?v=P54ybJ0pX9g
Makes me wish I hadn't sold that external sound card and Grado phones. Thanks.