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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 - 20:34 | Link to Comment Bicycle Repairman
Bicycle Repairman's picture

Don't kid yourself.  Obamacare is European style socialism that calls for European style taxation.  Now given that context you think SS is history?  Never happen.  Here comes a VAT tax. Then the government will be able to re-open the goody bag.  Bruce did his numbers real well.  Now put in a VAT tax and see how the new numbers balance out nicely.  The VAT tax is universal, hidden and not progressive.  What else could the TPTB want?  Full.Retard.Socialist.  Romney has the VAT in his back pocket, so forget about this fall.  Game over, man.  Game over.

Wed, 07/04/2012 - 16:47 | Link to Comment Pure Evil
Pure Evil's picture

What the US got was the largest tax increase in US history masquerading as free health care.

Wed, 07/04/2012 - 19:16 | Link to Comment roadhazard
roadhazard's picture

The only "free" health care is that that the 30 or 40 million got that HAD no health insurance.

Wed, 07/04/2012 - 21:14 | Link to Comment Seer
Seer's picture

And they, and we, will STILL get SHITTY FOOD, food that's one of the greatest contributors to the medical industry (scam).

It's why I think that it's more appropriate to refer to people as "cattle" than "sheep."  Cattle are stuffed with feed (grain, mostly corn) that isn't a what they are really suited (genetically) to eat; this feed actually breaks down their system, requiring them to be pumped full of antibiotics to keep them going until they're slaughtered (their organs literally burst from failure).

Thu, 07/05/2012 - 02:42 | Link to Comment putaipan
putaipan's picture

stray thought here....sorry. has anyone ever tried feeding cattle hemp? (btw- i'm still waiting on hemp bottles instead of plastic)

Thu, 07/05/2012 - 16:25 | Link to Comment Citxmech
Citxmech's picture

My guess is that hemp is better used as a fiber stock than food stock.

Wed, 07/04/2012 - 15:42 | Link to Comment asteroids
asteroids's picture

No, it gets even worse. When, not if, interest rates rise, I expect inflation to take off like a rocket. The end result is that a whole generation will retire into poverty being only able to afford cat food. All to save a few bankers. What a shame, what a pity.

Wed, 07/04/2012 - 21:18 | Link to Comment Seer
Seer's picture

One day people will wish they could afford cat food... cat food isn't all that cheap (and wet cat food? mostly water anyway)

Inflation?  Deflation?  Doesn't matter, this ship's going down.  U.S.S Affordability is sinking...

Thu, 07/05/2012 - 23:20 | Link to Comment FeralSerf
FeralSerf's picture

Wheat is much cheaper than cat food and it can be made into bread.  It's not very healthy, but neither is Americans' current diet.  Eggs are cheaper than cat food as a protein source.  Eating the cat is another possibility.   Maybe a can of cat food a couple times a month  for treat.

 

Thu, 07/05/2012 - 08:54 | Link to Comment DOT
DOT's picture

Banker on a spit with garlic, rosemary, with a butter and mushroom sauce.

No lamp posts people !  the meat will be ruined.    

Thu, 07/05/2012 - 16:23 | Link to Comment Citxmech
Citxmech's picture

Wild game animals (goose, deer, etc.) are traditionally hung out to "temper" for a few days to tenderize the meat.

For a tutorial, go here:  http://www.fieldandstream.com/articles/other/recipes/2006/01/deer-hang-t...

Just substitute the work "Banker" for "Deer." Of course bankers might be pretty soft to start with. . . .

Wed, 07/04/2012 - 15:39 | Link to Comment Zero Govt
Zero Govt's picture

Great maths Bruce

is anyone at the US Govts SSA being grilled/demoted/sacked for their inept maths at the mo?

Wed, 07/04/2012 - 15:54 | Link to Comment cossack55
cossack55's picture

Au Contraire, mon cher.  Promotions and bonuses for all. 

Wed, 07/04/2012 - 15:20 | Link to Comment rodocostarica
rodocostarica's picture

I guess that seals my decision to start collecting lower benefits at 62 in 6 years rather than wait for the 25% lower benefits at 65.

Wed, 07/04/2012 - 15:38 | Link to Comment ptoemmes
ptoemmes's picture

For me...62 is nine months away and it's 66 - for me - for full "vesting". About $700.00 per month difference for rme  .  Of course there is no guatantee that the "early in" reduced monthly payout won't be cut as well.  This math problem is gonna be complicated...

And the wife has one of those "may not be there" state pensions in four years.... 

Wed, 07/04/2012 - 16:56 | Link to Comment DosZap
DosZap's picture

For me...62 is nine months away and it's 66 - for me - for full "vesting". About $700.00 per month difference for rme  .

Take the 25% hit, you will never live long enough to make up the difference.

Plus nothing is saying they change the rules, and make your "66" to "75".

Thu, 07/05/2012 - 01:49 | Link to Comment Freddie
Freddie's picture

+1 If he is an older person, especially a white older person, he is expendable. 

Wait until O- "health" care starts getting rationed and competent doctors quit.  This is when Social Security will get "fixed."

Someone has to pay for those  new $200 Nike's bought with WIC credit cards or the O neighbor renting a very nice home for $3,000 a month with no job.

Wed, 07/04/2012 - 16:01 | Link to Comment Bruce Krasting
Bruce Krasting's picture

When the TF is exhausted ALL benefits will be cut by 25%. This includes you.

I think you can wait 6 years to get that extra $700. Say that means you will get $2,000 a month.

I think that five years later, all checks will get cut 25% so you will fall to $1,500.

It is precisely you that I worry about.

What I see is that there will be substantial means testing for SS. Too many people are 100% dependent on SS to live on. Some would starve if their income was cut 25%. This is the "Cat Food" syndrome.

If you have savings of ~$500,000 you will get very little from SS. I think they will bring it down so it is just enough to pay for your Medicare premium.

Good luck.

bk

 

 

Thu, 07/05/2012 - 01:44 | Link to Comment Freddie
Freddie's picture

ObamaCare is designed to kill him off sooner than later.  As Drudge has on his site today - old white people do not understand healthcare and people like Chris Rock call it independence day for whites.   Hype & Chains.

Wed, 07/04/2012 - 21:19 | Link to Comment boiltherich
boiltherich's picture

BK, my mother became disabled following a mysterious 3 month long coma in her mid fifties, she had worked since she was in high school at age 16 in 1951.  When they put her on SSD her income amounted to less than $900 per month in spite of her having worked full time every year since 1951.  People who were high income for all those years and married might get that kind of retirement check but the average payout is not what they claim it is.  If it had not been for subsidized housing from HUD, and about $100 in food stamps, and MediCal (California's version of Medicaid), she would have starved under a bridge somewhere.  How does one survive on the coast of northern California on about 900 per month?  Even with the section 8 housing and Medicaid and food stamps she almost did go under monthly.  And the lack of dignity that the world attempts to thrust upon such people is inhumane to say the least.  They act like it is some sort of welfare only a person with a leech mentality would try to collect rather than your own insurance policy you paid for every paycheck of your working life. 

And we all know that inflation is so underreported that the SS COLA's have meant a drop in benefits purchasing power of at least 30% in the last decade alone.  You want to know why gasoline used to rise seasonally for the "summer driving season" in decades past but now suddenly go up in winter and drop in summer?  Because the way they calculate all federal COLA's now takes a snapshot of prices on June 1 in the spring and another snapshot of prices on August 30 in late summer and measure the difference in those price levels, if (IF) there is a positive difference (higher prices/inflation) then IF that new higher level is above the level of August 30 2011, the COLA will amount of the difference between that increase and the previous highest prices ever measured (08/2011).  That is why people on SS got a zero percent increase three years in a row.  The raise announced in 2008 and effective Jan. 1 2009 was 5.8% and there has not been a raise since till last year they announces a 3.1% raise for this year.  Because gasoline was higher on June 1 than it will be on August 30 this year we will again not get a raise in 2013, barring a war in the middle east that sends fuel soaring or some such.  Never mind that many foods are now double what they were in 2008, and I know of none that have gone down.  Electricity is up 40%, same for cable, same for rents in this region, up by on average more than 30%. 

The government looks the other way as refiners and speculators gouge us in winter spring now, then the government goes out of it's way to bring down prices in summer toward fall, not because it is an election year and incumbents are afraid of voter wrath over high gas prices, the government got burned in 2008 by the COLA calculation because they did not bring down gas prices until October, that is not going to be allowed again.  Gas will now fall in summer even if they have to open up the SPR and give away oil. 

Thu, 07/05/2012 - 00:57 | Link to Comment Lednbrass
Lednbrass's picture

Your mother would have starved under a bridge? What? Are you serious?

You wouldnt even give your own mother a roof and food? Or work extra to provide them if necessary-and yet you are OK with others having to pay for her?

Unless you are in a wheelchair or something that is just messed up.  Christ, I supported my mother in law for 7 long hellish years and I hate the woman.

Edit: I hadnt read so far to see that you dont even have kids to care for and bought a nice car. Un friggin real. A male with no real responsibility on earth- yet in your own words your own Mom would have died if the government hadnt given her money?

WTF?

Thu, 07/05/2012 - 07:57 | Link to Comment Henry Hub
Henry Hub's picture

***Your mother would have starved under a bridge?***

This just underscores the fallacy the Social Security transfers wealth from the young to the old. The truth is if grandma doesn't get SS then her children and grandchildren have to support her directly.

Thu, 07/05/2012 - 10:31 | Link to Comment Lednbrass
Lednbrass's picture

Nonsense, it does transfer wealth. The elderly are the responsibility of their own progeny, not someone elses.

If someone has no grandparents, or grandparents that care for themselves, there is no such expense at all.

And if there were- so what? The only complaint comes from self absorbed losers who arent willing to accept personal responsibility even for their own families, and if the old folks raised such a selfish twit its their own fault.

Wed, 07/04/2012 - 21:59 | Link to Comment Seer
Seer's picture

We were plugged in to a BAD system.  Trying to make some, what you might suggest are, small changes doesn't resolve the underlying issue, that being that the system ONLY ever worked because of GROWTH.  It's NOT a joke that this is a Ponzi, it IS a Ponzi: trying to rearrange the chairs does nothing to change this fact.

Your mother, and most likely all of us here, have worked FOR TPTB, and TPTB were happy to leave big crumbs (compared to those that drop for most of the world's population, not to mention as has been the case throughout history [except this short fossil fuel boom era of 100 - 150 years]).  With less growth (they cannot fake it anymore) the crumbs get smaller, this is no conspiracy (TPTB have always ensured that they have MORE).

If you don't like the price of energy then what are you going to do?  Keep in mind that on a per capita basis we've been dropping (and will forever more drop).  Buck the trend?  Fight TPTB? take their energy and party till it's gone? and then what?

Where my wife comes from it's not unusual for people to spend their entire lives w/o seeing a doctor.  I suppose that they could manage a visit or two if they deprived their struggling/starving children.  No, don't confuse what is tough with what is HORRIBLE (though the law of averages, which, with declining resources, says that this is OUR future [unless you specifically strive to cater to TPTB; they'll need more Praetorian Guard folks as well (it'll get you a slice of bread and a piece of cheese)]).

Wed, 07/04/2012 - 21:39 | Link to Comment boiltherich
boiltherich's picture

I meant to add that if you drive you will be getting car insurance increases as well because they fund payouts not on premiums taken in but on the money invested from past premiums.  when they cannot make payouts because of ZIRP they will have to raise premiums.  Same reasons and same results as with SS.  My insurance went up by 10% last 6 month period in spite of a still perfect driving record and a car that is now older, my premium was the same from June 2009 when I bought my car new till this March when it went up in spite of the car being worth $35,000 less than when it was new.  Premiums are a calculation of the flow of money they need to make future investments that will fund payouts/profits.  In a ZIRP world net present value approaches 100% where they used to calculate almost doubling of invested money every 8-10 years.  Insurers of all types now have to get payouts and profit from premiums, and they do not have an option of changing benefit levels so they have to raise prices.  I predict premiums will double in five years in the current ZIRP environment. 

Thu, 07/05/2012 - 00:51 | Link to Comment HungrySeagull
HungrySeagull's picture

If they increase insurance premiums, we will have no qualms about dropping a vehicle.

Dropping a vehicle means to garage it and leave it against a bad day.

Wed, 07/04/2012 - 22:12 | Link to Comment Seer
Seer's picture

$35,000 devaluation?  It's now only 3 years old, which would mean that it HAD to have been over $40,000.  Excuse me, but YOU ARE THE RICH (2/3 of the world's population lives on $3/day or less; yes, this also makes ME rich as well).  I've NEVER bought a new car in my entire life (which is wll over half over now).  My insurance is affordable because my car is 22 years old: operational cost is very low (I do my own maintenance, which, I'd rather not, is what I have to do; I'd like to buy a new engine for it so I'd have it when needed, which will also likely mean when I could no longer afford one).

But, yeah, you and others are now starting to (perhaps?) get my point about "economies of scale in reverse?"  As the price for things like auto insurance increase less people will have it, which means an increase, which then means less people, which...

Thu, 07/05/2012 - 00:19 | Link to Comment boiltherich
boiltherich's picture

Yes, it was $75,000 total of all payments and no I am not rich, by third world standards yes perhaps, but by American standards no I am not even middle class, I just prefer to spend my money to have a decent car than a house that I saw as being a bubble market as early as 1993.  I also have no kids, never married, that is for fools and suckers who want to give up half their assets and all of their freedoms, mobility is freedom to me, I will not have my freedom restricted by an unreliable vehicle and there are no public transport options in this region.  That is the thing about being free, we can choose to live as we like.  You can choose to drive an old piece of junk if you like and I will applaud your independence and grit, rather than respond with red arrows and disapproval.  I also bought a car I would like well enough to keep for the rest of my driving life which is about 20 years... I hope.  I have been homeless, I have had to live in a vehicle for a couple of years, I am entering the last quarter of my life and I do not plan to spend it as I have had to live the first three quarters of my life, once upon a time I worried about all the worlds poor, especially the children who were brought into this life with no options or say in what they found when they arrived, but I have come to the conclusion that what I think, say, do, none of has any impact, does not help anyone, will not change the destiny we are set for.  All I can do to improve the world is improve myself.  If you think otherwise that is your right. 

 

 

 

Wed, 07/04/2012 - 17:16 | Link to Comment Fred C Dobbs
Fred C Dobbs's picture

Means testing will come.  This is why one should have precious metals.  Keep your wealth from being tracked and measured. 

Wed, 07/04/2012 - 22:14 | Link to Comment Seer
Seer's picture

And, don't yap about it!

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

Not sure about your term exhausted. If the fund is exhausted, from what is anything paid? The working remnant? They'll love that to be sure ;) Warm fuzzies and all.

 

 

Wed, 07/04/2012 - 16:17 | Link to Comment Spacemoose
Spacemoose's picture

hide your assets in PM's ...

Wed, 07/04/2012 - 15:18 | Link to Comment bluepill08
bluepill08's picture

But.. I dont understand.  Isn't the money safe in a lockbox?

Thu, 07/05/2012 - 00:48 | Link to Comment HungrySeagull
HungrySeagull's picture

The WVa Parkersburg office "Lockbox" is FILLED WITH IOU's from ALL previous Congresses who took the money and spent it each year since the Reagen Administration.

It turns SSA into a gigantic hamster wheel keeping bills due and payable current while shuffling whatever it can to pay tomorrow's bill.

As far as Gold and Silver is concerned, I continue to stack. Those miserable Buyers saying they will pay 15K per ounce of Gold will need to price silver accordingly as well. Looks like 250, 375 or 660 per ounce depending on ratio.

If that did happen, we can retire the student loan easily. Just a few pounds will do it instead of 10 years labor.

Wed, 07/04/2012 - 19:11 | Link to Comment roadhazard
roadhazard's picture

It was until Ronald Ray Gunz got ahold of it.

Wed, 07/04/2012 - 16:13 | Link to Comment Bruce Krasting
Bruce Krasting's picture

The lunacy of this is that SS is required by law to issue debt certificates for every bond. They have a secret printing operation in VA. The actual pieces of paper are stored deep in a vault. The vault is designed to survive a nuke.

The thinking back in the 50's was that this would insure that society would continue after the country was blown up.

Why they still do it today is a mystery to me. I bet it costs $100m every year just to print and store the paper.

Only in America...

Thu, 07/05/2012 - 12:47 | Link to Comment machineh
machineh's picture

'The thinking back in the 50's was that this would insure that society would continue after the country was blown up.'

Sadly, it never occurred to the Soc Sec commissioners that THEY were the guys who would blow up the country.

ERISA coulda fixed that. But as is standard in the sleazy world of government, they contemptuously refuse to follow their own laws.

Laws are just for little people and the private sector.

Wed, 07/04/2012 - 15:18 | Link to Comment Milestones
Milestones's picture

Bruce, you are I guess a "guest contributor". I Do have a article to contribute that is very much in line with your theme, but I don't know how to submit something for consideration. Could you tell me how to go about it. I don't want to post it as a comment--too long and I don't want to step on your article. 

Tyler, if you read this perhaps you can lay out what is needed Would be appriciated.        Milestones 

Wed, 07/04/2012 - 15:46 | Link to Comment bank guy in Brussels
bank guy in Brussels's picture

You see Tyler's contact information on the side of the page ... You can send Tyler your lead couple of paragraphs and then the article in an attachment. - Try using WordPad instead of Word for your article text, it makes a much smaller attachment, and can be easier to copy and paste onto the web.

But Tyler quite busy, I am sure he gets tons of inquiries, so it's not reasonable to expect a personal reply.

Maybe a better strategy, if what you have to say is good ... put it up on a free blog on WordPress or somewhere, and put the first couple of paragraphs, or the key points, here on ZH in the comments section, with a link.

You say it's relevant to Bruce Krasting's article ... plenty of people add comments to BK's thoughts with links, no reason you can't be one more.

From the sidebar -

Tips: tips [ at ] zerohedge.com

General: info [ at ] zerohedge.com

Wed, 07/04/2012 - 16:06 | Link to Comment Bruce Krasting
Bruce Krasting's picture

Tks Bank Guy. I agree, make a comment here with a link. The more info the merrier.

Thu, 07/05/2012 - 13:15 | Link to Comment Milestones
Milestones's picture

Bank Guy and Bruce--Thanks for the helping hand. I'll give it a shot. My article deals with Corp.s as people and the Federal Reserve. Both of course are gigantic frauds and I have found Supreme crt decisions to back it up. In fact my first post of 6-14-10 addressed the Federal Reserve but posted as a very long comment.  Again, thanks      Milestones

Thu, 07/05/2012 - 01:31 | Link to Comment Freddie
Freddie's picture

Does this mean we can blog pimp here and post links to our own sites?  I could use some ZH PR 6 backlink juice.

I had heard Tyler is multiple people.  Maybe it is one dude who just shines his gold bars all day long and collects his fiat ad checks. .

Wed, 07/04/2012 - 15:13 | Link to Comment Deep79
Deep79's picture

As much as I hate the Bernank, to balme him on this, and this, and this, people dont get the big picture. 

We are declining, and the FED is just making it at slow as possible, they dont want a qiuck collapse. We will get to below the March 09 lows, that I have no doubt, but it aint gonna happen overnight.

All the FED is doing with ZIRP, QE's, Twist, and so on is just to delay the inivatible. They are praying and praying something new comes around(technology) to get us out of this. 

To blame the FED is childish, everyone is at fault, the FED was just the enabler

Wed, 07/04/2012 - 22:29 | Link to Comment Seer
Seer's picture

You're actually much closer to the truth than the majority of folks...

These folks Fed et al) were trained in nothing but the same old same old; because... the System isn't that complicated to figure out (they obscure it and twist it to their pleasure, yes, but anyone thinking that they want to kill their golden goose is practicing logic without a brain).

It's the System Stupid! (as you correctly say, it's not a PART that's the problem, but it's the WHOLE)  WTF did people think, that we could really have endless growth on a finite planet?

People can clamor for a quicker death to all of this, but w/o understanding the fundamental reason for the inevitable collapse (whether the rope is cut or if slowly chafes away) we'll most certainly only repeat it (and, as always, we mask our failures in political-speak; the mirror isn't any place we wish to think- the unicorns run wild in the land of eternal growth).

Wed, 07/04/2012 - 21:31 | Link to Comment Everybodys All ...
Everybodys All American's picture

Everyone is to blame? I've been asking for someone to fire Bernanke for at least three years. I still believe some day when this all falls apart he will be at best put in jail. Wait and see.   To the degree that people bought unaffordable homes maybe there may lie fault. However, not everyone is at fault. In fact most of us in the flyover country have little to say or do with this insane monetary policy. Think about how stupid it is to at this stage still maintain a zero interest rate policy. Can you think of any way this moron can walk this back to a normal interest rate policy? Blame him ... hell it's time to arrest him.

Wed, 07/04/2012 - 22:56 | Link to Comment azzhatter
azzhatter's picture

No jail for this fucker, swinging from a lamp post with Geithner's dick in his mouth

Wed, 07/04/2012 - 22:34 | Link to Comment Seer
Seer's picture

"To the degree that people bought unaffordable homes maybe there may lie fault."

NO!  This is a symptom.  The DISEASE is GROWTH.  What Bruce writes screams how everything is based on growth.

"Unaffordable" = UNSUSTAINABLE.  The "American Way of Life" is TOTALLY UNSUSTAINABLE, it was destined to achieve this point from the moment the "system" was predicated on growth.

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

Quicker is always better when it comes to collapses.  I think the Feds have the martial law infrastructure already in place.  Bring it on.

Wed, 07/04/2012 - 22:37 | Link to Comment Seer
Seer's picture

Martial Law will be meaningless.  It will only be a matter of time before their retreat behind gated communities can't find enough bullet catchers.  As Dick Cheney put it: "The American way of life isn't negotiable" (until it isn't, at which point it is but a bad memory).

Thu, 07/05/2012 - 01:18 | Link to Comment Freddie
Freddie's picture

The gated communities will be the first places they hit.  People with guns and gangs know where the money is.  Those rent a cops, in Malibu or other gated communites around the USA, are not gonna take a bullet for Streisand or Spielberg or some other abusive fuk who has been treating them like dirt for years..  

Hopefully the gangs in LA will have maps to the stars homes in Hollywood Hills, Bellaire, Beverly Hills, Santa Monica, et al. Hopefully Cher is on the list with other libs.

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