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Jim Grant Exposes "The Bureau Of Money Materialization" And A Submerging America
Jim Grant spends exactly the correct amount of time (zero) discussing the "urban myth' of the trillion dollar coin in this brief interview on CNBC; instead deciding to try and strike up some intelligent understanding of the dire situation we face. By providing context for our massive 16 trillion dollar debt (360 million pounds of $100 bills), and explaining how exponential the idiocy has become, Grant brings us full circle as he explains to the money-honey that once upon a time our debt was backed by gold, and "there was only so much gold and so many dollars," thus limiting our exuberance, but "now we have neither the gold covering the dollar nor do we have interest rates constraining us [thanks to Bernanke et al.]; the only thing remaining to constrain us is some sort of civil discussion, a numerate discussion about the debt," which it appears the bespectacled and bow-tie-bound bond brain-box hopes is possible. "The debt has increased twice as fast as federal receipts," he warns, adding correctly that "the United States is truly submerging."
Our fiscal problems are enormous and yet the Federal Reserve, that is "The Bureau of Money Materialization," can print money (materialize dollars on a screen), removing the fiscal constraint too; so what we have is a fiscal problem when the underlying problem is monetary.
With the decidely un-Hamiltonian Lew now in charge and a hyprocritical 'bewailing the debt' Obama now wanting no limits, our future is in the hands of foreigners he warns - and the debt markets will only react when they grasp exactly how big a trillion really is.
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For Americans, lets drop the zeros and put it in terms they can relate too.
The person's yearly salary is $2,300 per year.
The person has $0 in the savings acccount.
The person added $1,077 on the card this year without paying any principle on the credit card.
The person has a total credit card debt of $16,500
The credit card company adds another $3,311 to the credit card debt in interest each year.
The person owes his bookie "Baby Boomer" another $58,000 for a gambling debt and is now being threatened to have his legs broke if he doesnt meet his promise to pay back the money in large installments.
He wants to add 2,000 dollars to his spending money so he taxes his body more by selling his rich blood all year.
He plans on pulling his teeth and collecting the gold fillings for spending money if he has too.
He goes to his Mama Bernake and asks for more money. He pleads that he has a net worth (GDP) of $15,600 but he lies as he counts all his bills as part of his worth.
Then...
He comes to your door and says: Just thought of a great idea, I can manage your retirement funds for you since the market is so risky, I will set you up with an lifetime annuity, I promise.
He impatiently waits for an answer then pushes further.
"Can I move in with you for a while? ...just for a few days until I get back on my feet. I won't raid the refrig, drone over your wife , nor steal your kid's stuff"
Did you trust him and let him in?
Yes you already did...he is your big brother...Freddy Government.
I remember, it was Jim Grant who told me, (in a NYT Opinion from ~1999) "the history of currencies is unambiguous."
Maybe Jim should change the title of his newsletter because there aren't any interest rates to observe anymore. Those days are gone. Now we are all at 0 % indefinitely.
Nice tie.
I like Jim Grant ... but I find it hard to believe that he would be so clueless as to trust the markets to be free markets. The markets only show evidence of being managed and not free. If we have iron bound price controls on all of the markets run by the the central committee through international bank computers. The the price will never reflect the market until something else breaks or people recover their will and moral compass. With the markets intheir current condition rational and uncompromised people refuse to be participants and the controllers (as we are now seeing) become virtually 100% of the market. The copntrollers artificially depress interest rates. They artificially inflate the price of stocks and commoditees. They completely overwhelm the invisible hand that constitutues free market force.
We no long have free market force, simply non-free market farce.
So, Jim Grant must understand this, be a part of it and yet it must grate him on the inside to be a part of the fraud.
My guess is that it will not be the so called markets that break first. Something else will break and the markets will fail as a result. Obama is probably doing the world a favor by spending so much money as to make the dollar worthless and turn Wall Street into a farce. He has given them a drink of water by shoving a fire hose down their throat.
During the Weimar Republic hyperinflation, the biggest problem for those responsible for the currency was simply logistics: getting the printing done, needing increasing numbers of printers, getting the physical stock and then distributing the currency (more and more horses and carts).
Nowadays, with the magic of electronic accounts, even that physical logistical constraint no longer exists. The benefit of modern technology.
"uptown has got it's hustlers...."
if there was a man to trust jim would
be that man. alas ...
Don't mess around with jim lyrics
http://www.youtube.com/watch?v=odkIEDi2x0g
.
so who is this slim character,
posted as a poetic and wondrous
analogical question?
Where credibility is concerned, if a man is going to wear a bow tie, he might just as well add the beanie with the propeller.
http://www.khq.com/category/195686/video-landing-page?autoStart=true&topVideoCatNo=default&clipId=8108860#.UN3YKigKtj0.facebook
this is good programming. amazing, i didn't think it was possible.
thanks for this post.
Yes, thanks for that Rusty.
I'm shocked that the producers and paper-pushers at the station would allow such programming, and for the video to remain on their website.
Maybe, there is some hope.
That was good. Thank you. I see a new RT reporter.
There is hope!
united states
of submarnine ....
LOOK! Overhere... http://www.platinumringcompany.com/images/product/CP5_L.jpg it's a platnum ring! To bind them all;)
" and the debt markets will only react when they grasp exactly how big a trillion really is."
They already know.
" so what we have is a fiscal problem when the underlying problem is monetary."
We have a debt problem. The economy grows on the expansion of money, created through debt. Thus debt must keep expanding. Government has replaced the private sector as the expander of debt. A balanced budget exposes the extent of the debt problem, as debt will stop expanding if that occurs and thus the economy.
More and more debt is needed to "solve" a problem caused by debt, as previous debts have to be repaid with INTEREST.
360 million pounds of 100 dollar increments of debt. How many more hundreds of millions of pounds have to be created to pay off those debts?
Gov. Jindal proposing elimination of personal and corporate income taxes, to be replaced with a flat sales tax.
Where has Orde Wingate gone?
Jim Grant, like Ron Paul and so many others, trips over his words when trying to explain the problem in everyman's terms. The point gets lost.
Who cares if it is called the Federal Reserve, or how heavy a trillion dollars is -that is opaque.
Maria is trying her best, she is at least willing to give airtime to Jim Grant, and Mark Faber, and Kyle Bass, but her brief is always to get back to 'what's gonna happen in the markets', 'where are you puttin' your money -and don't say gold' for her audience. These guys have to keep it simple. (Most investors, especially those still in the daily game, have to be clueless)
No.1 You can't live beyond your means, you have got to balance the budget.
No.2 You can't borrow if you have no means to pay it back without enslaving your children.
No.3 You can't rely on foreigners buying your dollars, at some point the chinese will just say we don't need dollars any more. When that day comes, the dollar is not the world currency, and no-one will take dollars for their oil.
No.4 If you print even more dollars, you accelerate the problem and bring armageddon closer, quicker. You also bring on inflation and hyper-inflation.
No.5 You can't trust the President or Congress to abide by the rules. For Chrissakes, in the middle of the fiscal cliff discussions they were still distributing pork in all directions, hundreds of millions worth. There have to be legacy chains on them. You cannot spend what you haven't raised in taxes. If you want to fund a maissive overseas miltary, then aks the people to pay more taxes.
No.6 There is always a tipping point, the working man calls time. Sounds like gun control will be the issue, not the taxes. The will be some genie if it gets outta the bottle.
http://www.bloomberg.com/news/2013-01-04/narula-s-no-1-hedge-fund-gains-38-betting-on-mortgages.html
The Feds Mission Is to Drive Down the 30 Year Mortgage Rate - Bloomberg Markets Magazine
“To revive the housing market, the Fed has thrown a lot of firepower at agency mortgage-backed securities,” Narula says. “Policy makers have worked hard to let homeowners refinance. They’ve been clear that that’s their mission -- and you want to be careful going against that mission.”
In addition to his intuition on Washington policy moves, Narula uses mathematical models to calculate how long homeowners will make payments at their current interest rates before either refinancing or defaulting. The models predict behavior based on a homeowner’s credit score, address, loan size, loan age and other factors. The algorithms also allow sophisticated investors to hedge against wrong-way bets.
“You want to come up with wagers where if you’re right, you’ll do really well and if you are wrong, you don’t get hurt too badly,” Narula says.