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Bernanke – My Goal is to Wreck Social Security

Bruce Krasting's picture





 

In June of each year the Social Security Trust Fund (SSTF) reinvests a significant portion of its investment portfolio in newly issued Special Issue Treasury Securities. The interest rates on these bonds is set by a formula that was established in 1960. The formula was designed to insulate the SSTF from transitory changes in interest rates by averaging market based bond yields over a three-year period.

Bernanke’s Fed has set interest rates at zero the past four years. In 2012 the 1960's formula has finally caught up with the SSTF. It got murdered on this year's rollover.

The following is from the SSA (link). It shows what has matured this year and what new investments have been made. I will be breaking down sections of this report, so don’t get eye strain looking at this:

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Consider the bonds that matured in 2012:

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$135 billion of old bonds matured this year. This money was rolled over into new bonds with a yield of only 1.375%. The average yield on the maturing securities was 5.64%. The drop in yield on the new securities lowers SSA's income by $5.7B annually. Over the fifteen year term of the investments, that comes to a lumpy $86 billion. It gets worse.

Bernanke has pledged that he will keep interest at zero for a minimum of another two years. The formula used to set interest rates for SSA looks back over the prior three years. Therefore, SSA will be stuck with a terrible return on its investments until at least 2017. I anticipate that the formula will result in still lower investment returns for the next five years, but I’ll conservatively use the rates set this year to evaluate the consequences to SSA.

The following looks at what is maturing at SSA:

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A total of $543 billion of securities with an average yield of 5.6% is coming due in the existing ZIRP window. The reduction in income from the 4.2% drop in yield translates to a nifty $23 billion a year, for fifteen years ($350b). It gets worse.

As a result of the Fed’s extended ZIRP policy, and the SSA's interest rate setting formula, it is now a certainty that interest income at SSA is going to substantially drop over the coming decade. The problem is that SSA has provided projections for its interest income over this time period that don’t jive with this reality.

From the 2012 SSA report to Congress:

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The SSTF believes it will earn an average of 4% over this period. That is not possible any longer. I calculate that the most SSA could earn is an average of 2.3% (it could be significantly lower). The drop in yield translates to a reduction in income of $535B over the forecast period. That’s a lot of dollars.

Consider again the base case provided by SSA in April. The following compares the size of the trust fund based on SSA’s estimates and my adjustments for what interest income will be (everything else is constant).

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Based on a realistic assessment of interest income at SSA, the trust fund tops out in 2015, its peak value will be ~$2.823B. The SSTF has reported that the TF will top out at $3,061B, and that milestone will not be reached until 2021. Essentially, the train wreck will happen six years earlier then assumed, and the TF will be $250B short. It gets worse.

The other key ingredients in the SS "pie" are tax receipts from workers and the amount of monthly benefit payments (the assumptions used is that GDP growth will average 4%, and unemployment falls to 5.5% -  no recessions over the ten-year horizon). These are not realistic assumptions. This means that once the SSTF hits its peak in 2015, the run off in assets will happen very quickly.

The SSTF has stated that the date in which the TF falls to zero will be 2033. The actual termination date of the TF is much closer than that. It could come as early as 2023.

Anyone who is 55 or older should be worried about this. Based on current law, all SS benefit payments must be cut by (approximately) 25% when the TF is exhausted. This will affect 72 million people. The economic consequences will be severe. The drop in SS transfers translates into a permanent drag on GDP of 2%. In other words, when this happens, the country will be unable to have any significant positive growth for a long time to come.

I know I will get comments from readers who have worked 40 years and paid into SS and now want it back. I tell those folks in advance that I'm sorry, but they will have to accept a cut in benefits. It will happen it about ten-years. Make your plans accordingly. If you don’t like these conclusions, write a letter to Bernanke. It’s well past time that the true consequences of his monetary policies are understood. He’s not just breaking the backs of small savers; he’s killing Social Security.

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Enjoy the fireworks!

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Wed, 07/04/2012 - 21:48 | Link to Comment PulpCutter
PulpCutter's picture

Right - let's go to zero education.  Like Somalia.

Wed, 07/04/2012 - 22:59 | Link to Comment JOYFUL
JOYFUL's picture

leaving aside the inane "Max Fischer" style Somalia reference, the idea is a good one...zero education...

in the new "post-industrial base" Euromerika, 100% street smarts will be the ticket to survivin n thrivin...

farmers, foragers, trappers n hunters will be the new elite...

not because of any special income status, but simply because they'll be the only ones not standing in the Big Circle K FunRanch[o\a Camp Fema\EuroDisney] food script line... hopin for the Bill Ayres appointed Kamp Kapos to throw them a few  juicy morsels of "easily affordable" Higher Education StudentDebt Slave Stew.

I suggest those big on education study the story of Pol Pot...a man simply a few decades ahead of his times...welcome to the jungle Euromerikans!

Wed, 07/04/2012 - 19:57 | Link to Comment JR
JR's picture

The big news this week was the possible discovery of the God particle - the elusive Higgs boson - the entity that may suggest how matter develops. But missing from the major media as usual is the biggest story of the last few decades – the existence and operation of the Fed particle. This is the elusive particle that was inserted into the growing, healthy, successful body of the American nation in order to provide a constant flow of wealth to its initiators.

In the beginning, it skimmed money and resources here and there in a kind of protection racket for the owners of the Federal Reserve.

No longer does it operate as a kind of drain on the nation’s wealth, turning now into a monster enveloping every aspect of Americans’ lives. It’s now become so large that there’s not enough value to feed it. It’s is enveloping municipalities, state governments, housing, savers and pensioners, small businesses, social security and investments; in short, the cost of living.  In other words, if you have value, if you are an American and you possess value,  the Fed is coming for you. If it hasn’t appeared today, it will be on your doorstep tomorrow.

You have honed the unvarnished, undeniable truth into a rare piece, bankruptcy lawyer. The best perspective and summation of the Social Security dilemma I’ve read.

Wed, 07/04/2012 - 19:23 | Link to Comment robobbob
robobbob's picture

it was a ponzi from day one pure and simple. a way to buy votes, avoid having embarrassing pictures of grandma living in the street, and a road to pave the way toward socialism. a nice idea built on unsustainable assumptions

yes, people paid into the system.....with promises of more return than what they put into it......without any meaningful investment growth......the difference to be covered by an ever increasing pool of new investors, or borrowing

you know, a P-O-N-Z-I

the only thing keeping this one going where the original ponzi, or a madof failed, is that this one is backed by people with guns who have the power to make you continue to invest, long after everyone knows its time to head for the door

Wed, 07/04/2012 - 23:41 | Link to Comment HoofHearted
HoofHearted's picture

But it was the right kind of ponzi at the beginning. It just never updated. In 1935, when the SSAct was passed, the average life expectancies for men and women were 59.9 and 63.9 years, respectively. If the US wanted to keep up with changing demographics, we would need to start doling out the Social Security checks at about age 80, since the new 2012 life expectancies are 75.6 and 80.8 years. There...problem solved!!!

Wed, 07/04/2012 - 18:51 | Link to Comment New American Re...
New American Revolution's picture

Wreck Social Security?   More like wreck the whole damn thing.   But then, that has always been the plan, hasn't it?

Wed, 07/04/2012 - 18:50 | Link to Comment steveo77
steveo77's picture

Constitution of USA, Read It, Its simple

Links to the Constitution and Amendments and AoC

Happy 4th!

You can read all the docs below in less than 1 hour. Misinformation is rampant concerning these basic laws of the US. Read them, you will be really glad you did. In fact these documents are so simple that a group of high school students, would be able to read and interpret them and apply them to real situations, maybe with just a little help by an older person to provide some historical context and explanation of an older version of English, however for the most part the language used is 97% exactly the same as today.

http://nukeprofessional.blogspot.com/2012/07/constitution-of-usa-read-it-its-simple.html

Wed, 07/04/2012 - 18:24 | Link to Comment rufusbird
rufusbird's picture

Thank you Bruce for the extrememly valuble information. I need to plan accordingly. On a personal level, this is the most informative post you have done, (of many goods ones).

Wed, 07/04/2012 - 18:19 | Link to Comment El Oregonian
El Oregonian's picture

All I know is you'd better keep Fido & kitty locked up inside 'cause when the money runs dry people will get desperate to eat... Not a good thought -but the Animal Shelters will be empty...

Wed, 07/04/2012 - 18:25 | Link to Comment cynicalskeptic
cynicalskeptic's picture

but... but... that means there won't be any cat food or dog food for retirees to eat...... 'cause if the 'working class' has eaten all the cats and dogs, no store will be stocking pet food.

 

(next step = Soylent Green coming to a store near you)

Wed, 07/04/2012 - 20:21 | Link to Comment Dr. Sandi
Dr. Sandi's picture

No more pets to buy cat food for? Marketers will just need a simple change of labels on existing lines of cat food.

Natural Balance "Health" Food.

Nature's Logic Canned Energy Meal

Weruva Finger Lickin' Chicken Casserole Meat

Drs. Foster and Smith Canned Senior Select

Halo's Liver Spots Stew for Gramps

Wellness Chicken Canned Complete Meal

Newman's Own Chicken and Brown Rice. I already eat this one. It's Newman's Own for God's sake. I didn't notice the cat food bit on the label for about a year. They can probably keep selling this without the expense of redoing the label.

 

Wed, 07/04/2012 - 18:19 | Link to Comment JR
JR's picture

What the reneging on this “pact between generations” called Social Security is called in the words of Paul Craig Roberts is “Writing Off the Elderly.” Here are excerpts to back his claims:

"There is no discussion of the burden on future generations of the massive increase in the public debt in order to finance today’s wars.

"Affordability and intergenerational burdens are topics reserved for the discussion of Social Security….

“[I]t is incorrect to describe Social Security as the elderly using the political system to steal from the young.

“It is also not the case that Social Security retirees have the ear of Congress. The time is long past when Social Security was “the third rail of politics.” Since the 1980s Congress has been cutting back Social Security benefits in a number of ways. For example, the retirement age is being extended from 65 to 67, and the switch from a real cost of living adjustment to a substitution-based consumer price index results in the erosion of the real value of Social Security benefits, which was the reason for the switch. Up to 85% of Social Security benefits are now subject to income tax if the recipient has earnings or other retirement income above a minimum amount. The taxation of Social Security was another way that the political system reneged on the promised benefits.

“In addition, during the 1980s Alan Greenspan and David Stockman accelerated the phase-in of payroll tax increases that the Carter administration had enacted. By causing the payroll tax to rise before it was needed to finance benefits, more than $2 trillion has been collected than was paid out in benefits. The government spent the earmarked payroll tax revenues (leaving non-marketable IOUs in their place) on other things, such as the wars of the 21st century. As none of this $2 trillion reached retirees, the real “theft” from those of working age was committed by Greenspan and Stockman for the benefit of other spending programs…

“Another problem facing future retirement incomes is the growing practice of corporations laying off or firing older employees in order to reduce payroll costs and the cost of employer-provided medical benefits.

“What we have witnessed in the 21st century is a clear decision by political elites and the private interests that control them that gratuitous wars are more important than the elderly. “

http://www.paulcraigroberts.org/2012/06/15/writing-off-the-elderly/

Wed, 07/04/2012 - 18:12 | Link to Comment gdogus erectus
gdogus erectus's picture

Articles like this truly astound me.  No one really thinks that there's actually money invested in anything, do they?  SS is simply a tax revenue stream that's thrown into the General Fund and spent.  There is absolutely NOTHING but a drawer full of IOUs somewhere in the SS office.  SS pay outs are already being covered by the $100 billion+ that is printed per month right now to cover the federal deficit.  Sitting here calculating all these theoretical break points crack me up.  What a fucking academic waste of time.

Let's talk about how they have stolen our SS funds and spent them.  Let's talk about auditing the Fed.

 

Thu, 07/05/2012 - 10:19 | Link to Comment Jason T
Jason T's picture

It's been invested in food stamps, which is backed by sludge sitting at the bottom of cesspools all across America.

Wed, 07/04/2012 - 23:43 | Link to Comment world_debt_slave
world_debt_slave's picture

but, but, they keep telling us it's a lockbox.

Thu, 07/05/2012 - 10:25 | Link to Comment Revert_Back_to_...
Revert_Back_to_1792_Act's picture

This is purported to be a photo of it.

http://www.willisms.com/archives/filingcabinet.gif

 

Wed, 07/04/2012 - 19:12 | Link to Comment JR
JR's picture

Well, somebody’s got to value backstop Bernanke’s Wall Street bonuses for the big banks and their multi-trillion dollar investment bank bailouts.  Why not the elderly?

And maybe, just maybe, the criminal Fed cartel is using a little smoke and mirrors to lay the blame for its own financial heists on the bent backs of the old folks, purposely creating resentment among the young. You know, trillions for the bankers, ZIRP for you.  It was none other than Obama, in April, 2006, as a young, Democratic senator speaking at the inauguration of the Hamilton Project who promised his “friend Bob” (Rubin) more NAFTA-type agreements and cuts in entitlements, such as Social Security.

Recall that the Hamilton Project is the “think tank” sponsored by Goldman Sachs and ex-Goldman Sachs chief, Robert Rubin, cleverly embedded in the Brookings Institution.

Another one of the banker-controlled socialist government’s mathematical tricks is to claim SS bankruptcy by lumping together government contract entitlements with people who’ve forcibly paid into the Social Security system with giveaway welfare programs for its imported low-wage-worker base receiving Medicaid, food stamps, 0% to 3% down mortgages…

End the Fed; it was never designed to be redeemable.

Wed, 07/04/2012 - 18:35 | Link to Comment cynicalskeptic
cynicalskeptic's picture

Electorns circulating in the ether..... THAT is 'money' nowadays.....   Those may not be the only electorns that end up disappearing. 

I suspect that much of the real money in Fort Knox may turn out to consist of material short 5 electrons, protons and neutrons     Au atomic number 79   W atomic number 74       BUT their densities are nearly identical  19.32 gm/cc vs. 19.25 gm/cc

 

I wonder if that's one of the reasons China is taking delivery of 400 oz London Bars and remelting them into 1 kg bars (along with reassaying them)

Wed, 07/04/2012 - 18:04 | Link to Comment New_Meat
New_Meat's picture

Bruce, you nailed it:

"The formula was designed to insulate the SSTF from transitory changes in interest rates by averaging market based bond yields over a three-year period."

And Big Ben has bent the "transitory" condition.

Good on ya.

- Ned

Wed, 07/04/2012 - 17:34 | Link to Comment fonzannoon
fonzannoon's picture

i thought the sstf is what was propping up aapl every day

Wed, 07/04/2012 - 17:27 | Link to Comment CrawdadMan
CrawdadMan's picture

Wreck Social Security. Isn't that a good thing?

Wed, 07/04/2012 - 17:18 | Link to Comment catch edge ghost
catch edge ghost's picture

Fisrt of all, it's 'jibe' not 'jive'. (peeve)

Secondly, I keep telling you, they are trying to wreck SS, it's not 'unitended consequence'. It is the same as they are wrecking the USD and every other currency, carefully and slowly. They've got replacements being readied. Railing against it is heroic I guess, pointless though.

Be the expert and tell us what the replacements will be. DAMN!

Ok. I will then. ETF's and SDR's, or by any other name, but whatever. The system you know so much about is coming to an end. Your career doesn't have to. Retrain yourself, survive, then enlighten us. Otherwise you may as well be screaming out your window that the sun will come up tomorrow. Duh.

Wed, 07/04/2012 - 17:23 | Link to Comment I think I need ...
I think I need to buy a gun's picture

we can always print entitlements we just cant guarantee the value of those entitlements

alan Greenspan

Wed, 07/04/2012 - 17:26 | Link to Comment I think I need ...
I think I need to buy a gun's picture

we may see benefit cuts in 10 years but payday is now, the generations that caused the crisis are going to pay for the crisis, free lunch time is over,,,,,,,,

Wed, 07/04/2012 - 17:15 | Link to Comment Rene-Paul
Rene-Paul's picture

Help me out: The bond matures and a new bond is issued to replace the matured bond at a lower interest rate. So how is a matured bond turned into a direct deposit to the reciepients? Is it a debit to the general fund?

Thx,

Rene 

Wed, 07/04/2012 - 17:12 | Link to Comment JohnKozac
JohnKozac's picture

Good article. However, I have come to realize the only mandate of the Fed is to guarantee & amplify Banker Bonuses. Other then that, it's all spin and propaganda to keep the Hoi Poloi numb watching Dancing with the Idols and Jerry Springer re-runs.

Wed, 07/04/2012 - 16:57 | Link to Comment world_debt_slave
world_debt_slave's picture

The banks must be saved at all costs.

Wed, 07/04/2012 - 16:48 | Link to Comment janus
janus's picture

http://www.youtube.com/watch?v=1aBaX9GPSaQ&feature=related

congrats on your democracy, amorica!

happy 4th!

cheers,

janus

Thu, 07/05/2012 - 00:54 | Link to Comment HungrySeagull
HungrySeagull's picture

One bought and paid for by our Marines and the entire Military past and present.

There is no real celebration tonight. Only a grim digging in getting ready for the worst. Especially as those Russian Blackjacks make combat practice runs against our homeland with juicy targets all around.

Thu, 07/05/2012 - 02:09 | Link to Comment Freddie
Freddie's picture

The Russians are not the problem. Maybe the tribe of oligarchs who looted Russia's wealth and still control it. 

Wed, 07/04/2012 - 16:40 | Link to Comment Rearranging Dec...
Rearranging Deckchairs's picture

Wow the emperor's are all trully naked. Unfortunately none of my freinds, aquaintences, or family want to hear about it anymore. Also its not like a credible action prompt is presented along with this article. Yeah I get it we'

re f-ed .

How about a sample letter if you truly want us to write Bernanke? How about an address? I amaffraid after the Dr. Michael Burry video that to speak out will result in harassment via the closely connected government agents at the treasury.

What exactly are we celebrating today? What Freedom? What taxation with representation?

 

Oh why oh why didn't I take the blue pill?

Wed, 07/04/2012 - 16:32 | Link to Comment TrustWho
TrustWho's picture

Social Security Trust Fund is a pretty simple program for a government to manage...basic demographics. Most people wrongly believe their money went into a trust fund; however the fund is a generational transfer. When payments are cut and people's expectations are crushed, will there be blood in the streets?

Now, ObamaCare...Can you imagine? How can anyone trust these governmental fools? We do not need expensive test on our students to demonstrate the failure of our educational system. The government needs stupid citizens who believe in the tooth fairy!

Wed, 07/04/2012 - 17:10 | Link to Comment GeezerGeek
GeezerGeek's picture

Blood in the streets? What are us old folks going to do? Throw our wheelchairs, canes and walkers at the culprits?

The solution is self-evident and has been approved by SCOTUS: Obamacare will use the death panels to kill all the geezers who get sick. Social Security's TF is therefore 'saved', or at least expenditures are significantly reduced. This solution helps Medicare, too, and leaves more money for Medicaid. (Gotta keep those worthless parasites voting for the incumbents.) Younger folks will be glad to be rid of the old folks, figuring they can inherit what's left to buy more iPads, 3D HDTVs and other gadgets, since many won't have jobs. 

OK, maybe that's extrapolating things a bit too far. But if anyone expects to see political action, it'll only happen if Federal pensions for senators, congressmen, presidents, etc. are folded into the existing Social Security system and their extravagant healthcare packages are turned into Medicare. That's how it should be, anyway.

Wed, 07/04/2012 - 20:52 | Link to Comment Seer
Seer's picture

GROWTH IS DEAD; EVERYTHING HAD BEEN BASED ON GROWTH.

As far as "Obamacare" enacting "death panels," give me a fucking break.  Apparently YOU haven't dealt with "insurance" companies.  NOTE: I'm NOT defending "Obamacare;" I'm just pointing out where the jokers are pointing fingers at the clowns...

2/3 of the world's population lives on $3/day or less.  We're the fucking abnormality.  We've enabled the wealthy to live like kings by helping put down the peasants who wish to retain their subsistence lives (w/o having foreigners come in and bribe and then clean them out [your entitlement actions relate to "death" squads the world over- did you know THAT?]).

Wed, 07/04/2012 - 16:22 | Link to Comment I am Jobe
I am Jobe's picture

Thanks Bruce. Very insightful.

No addresses this in Congress.

Yippie, pretend and more promotions is what s needed and don;t forget the bonus.

 

Wed, 07/04/2012 - 16:18 | Link to Comment headless blogger
headless blogger's picture

They may not have considered (when they decided to loot the SS in this way, along with other sectors) that the Elderly have Also become a humongous Market for workers and investors alike.

After the 2008 crash, in 2009 a person could basically find work in our area in three places: medical, agriculture, and elderly care. That was it. Elderly care is a multi-billion dollar industry, where a worker-bee can find a degree of security.

Huge Retirement communities, that employ millions of people have cropped up all over the place; Special equipment for elderly; Vacation packages designed for retirees; John and Jane's money-spending they do around their new community they just retired in: and many other ways in which the elderly are adding jobs to our communities. 

It is really stupid for the Bernanke-types, as well as many number-crunchers, to purely look at SS as some kind of leak in a ship that is already sinking.

THE MAIN REASON the U.S. is dying is because of Two things: The Central Banking System, that is based solely on creating money through the creation of never-ending Debt (and it's unruley offspring of the FIRE sector), and the Massive Military Insustrial Complex that became necessary for the excess in dollars that roll around the planet.

The Downfall of this nation has nothing to do with Elderly!! The Article is making good points, but then he concludes that the only way to fix anything is for all elderly to take a 25% cut, as if there is no alternatives.This has become a huge talking-point in MSM and why NY Times David Brooks writes articles encouraging the sick and elderly to kill themselves. But they forget that the elderly ACTUALLY bring money to communities, jobs and customers.

If the American people would go after those that are robbing them (in broad daylight) then I might be more sympathetic towards cutting all other areas. But until there are thousands of arrests, in the FIRE sector, as well as arrests of hundreds of Politicians who are openly taking bribes, nobody can take anyone seriously in the U.S.

After 10 years of growing knowledge on all things American, nobody is doing a damn thing. People are just bitching on the internet about it, and making money on bitching about it.

MEN, you need to start stepping up to the plate. This is your chance to take back your manhood you keep bitching has been robbed by women (a weak bitching point if there ever was one). I'm ready with my sharpened machette whenever you all are.

 

 

Wed, 07/04/2012 - 21:25 | Link to Comment brettd
brettd's picture

There's lots of people who are plenty ticked off....Millions, in fact.

The question is who gets the machete first?

Thu, 07/05/2012 - 02:05 | Link to Comment Freddie
Freddie's picture

If you watch TV or Hollywoods crap then you support The Matrix and the elites.  They use TV and the media to control the sheep.    You can get 140,000 idiots to show up for a college football game which is totally meaningless but the idiots will do nothing to protect their liberty.  A national of sheep and sefs being brainwashed in 200 channels of HD.

Thu, 07/05/2012 - 01:58 | Link to Comment Freddie
Freddie's picture

If you watch TV or Hollywoods crap then you support The Matrix and the elites.  They use TV and the media to control the sheep.    You can get 140,000 idiots to show up for a college football game which is totally meaningless but the idiots will do nothing to protect their liberty.  A national of sheep and sefs being brainwashed in 200 channels of HD.

Wed, 07/04/2012 - 21:06 | Link to Comment Seer
Seer's picture

Your "reasons," while valid points/concerns, are NOT what's at the root of the real cause.  Everything has been based on growth (all the big wheels turn based on projected growth), and now growth is DEAD: the planet cannot pump out enough resources to maintain growth (EROEI is trending toward zero, and with it the amount of REAL work that can be done [energy = power, and power applied = work]).

"I'm ready with my sharpened machete whenever you all are."  Wait for someone else to DO something?  Neither myself or my WIFE sit around expecting others to do our work.  I bought her a machete last Xmas and it's not hanging on the wall waiting for some one to tell her to use it; she uses it for... wait for it... REAL WORK, not for some further Zombie Apocalypse or a Zombie taking back of some "corrupted system" (it was fucking corrupt from the start; it was based on a PONZI).

Wed, 07/04/2012 - 21:27 | Link to Comment headless blogger
headless blogger's picture

The machete example is allegorical.

Wed, 07/04/2012 - 16:12 | Link to Comment falak pema
falak pema's picture

FED and the ZIRP, SS entitlements and what you won't get down the road. A closing circle of state organised retraction as the state is the culprit of lost collective freedom, dissolved in runaway Oligarchy debt. There have to be consenting victims as the rising tide of indignation amongst sheeple is mortal danger to TPTB : Inquistion and heresy; the instruments of oppression are in place. Back to the dark ages. Its like a movie about bygone days. I'm back in my medieval novel, only its Bernanke whose writing the sinister script! 

Wed, 07/04/2012 - 16:28 | Link to Comment magpie
magpie's picture

Maybe something about English capital controls and French currency debasement during the Hundred Year War might be appropriate... 

Wed, 07/04/2012 - 19:13 | Link to Comment Gromit
Gromit's picture

During the Hundred Years War "France" did not exist because the various dukes and counts were vassals of the English King.

Kinda like the US civil war except that the rebels won.

Thu, 07/05/2012 - 02:22 | Link to Comment magpie
magpie's picture

The French King at his worst didn't have mouch clout outside of Paris, yet also claimed the English king as his vassal. So yes, that's like New York claiming the allegiance of the rest of the USA. Your argument doesn't make that much sense in context of medieval politics, the English Kings were of course also hampered by the independence of their chaotic great vassals and their conspiracies, yet still managed to keep the upper hand most of the time (mostly because of able continental Allies.) Clearly this doesn't mean that 'England did not exist', but France was always closer to total disentegration.

Perhaps it's only a question of the side you picked to support ?

Thu, 07/05/2012 - 05:25 | Link to Comment falak pema
falak pema's picture

that 100 years war accelerated the demise of feudal order in England/France, and both the Plantagenets and Capetians moved to more central control. France more so, under Louis 11 in 1460 onwards after they chased out the English. England did the same under the Lancasters after the war of the Roses that led to Tudor central power.

French feudal convulsion would never result in french nation demise. For one reason : the population of France was thrice that of England in 1350 after the plague. A lot of people died in Europe. But the population grew very fast into the 1400s leading to the Renaissance, and France was the most populous nation and thus HUB of European growth fed by Italian Renaissance.

Population is an important variable. 

Wed, 07/04/2012 - 15:49 | Link to Comment q99x2
q99x2's picture

Abolish the FED.

Wed, 07/04/2012 - 15:49 | Link to Comment sosoome
sosoome's picture

(duplicate)

Wed, 07/04/2012 - 18:06 | Link to Comment John Law Lives
John Law Lives's picture

The Bernank is effectively doing the same thing to the muni bond market.  Municipalities are calling munis as the bonds become callable, and many are replacing them when necessary with bonds paying lower interest rates.  The longer the Fed sticks with near-ZIRP, the more municipalities will be able to replace existing debt with new debt at lower interest rates.  The Bernank is robbing fixed-income investors in the process.

Wed, 07/04/2012 - 15:45 | Link to Comment Bicycle Repairman
Bicycle Repairman's picture

The US just got a huge new entitlement: Obamacare.  But SS is going away?  Maybe in some bizzaro universe.  Taxes are going up, and $ will be printed.  EOS.

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