Santelli Slams America's 'Debt-Is-Wealth' Mentality

Tyler Durden's picture




 

In American society, 'debt' and 'income' have become increasingly synonymous over the past 3 decades; but as Rick Santelli blasts (commonsensically), "they certainly shouldn't be." It appears the average joe has been led to this conclusion by the Central Banks. Rhetorically asking "where's the horsepower in the economy coming from?" Rick reflects on the auto-loan fears we discussed earlier, santelli notes that 55% of used cars (and 30% of new cars) are financed by subprime lenders... and rages, "if we continue as a country to fuel our consumerism with debt, there is no way the bond market's going to be wrong."

 

 

The bottom line, Santelli concludes,

"Until we start to get the income equation moving, the central banks can't do enough. ultimately, end game, can't fuel an economy on debt."

As we noted earlier...(via Macronomics),

"When somebody has too much debt and cannot reimburse it, how do you bail him out? Obviously by restructuring his debts, which imply losses for his creditors.

 

But when one lends him more money in order for him to pay back what he owes, he is not bailing him out but rather pushing him in a bigger hole! The game until now has been to "print" more money and to add more debt on the shoulders on the indebted ones, to gain some time in the hope that growth will resume and reduce de facto the weight of the existing debt burden and the additional new debt issued to support the initial debt troubles.

 

This is a big misunderstanding of debt dynamics and its effects on the economy. When debt becomes too big, which it is now the case in many parts of Europe, the servicing drains all the available cash flows and reduces the growth potential."

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Tue, 07/01/2014 - 15:50 | 4914924 Theta_Burn
Theta_Burn's picture

All those sub-prime deadbeats.. so it's not their fault now?

Thanks for the self righteous sound-bite Rick...

Tue, 07/01/2014 - 15:54 | 4914944 Keyser
Keyser's picture

Since when is being right considered self-righteous? 

 

Tue, 07/01/2014 - 16:08 | 4915003 Theta_Burn
Theta_Burn's picture

I will forever be stuck in 2009 with this guy.

http://www.youtube.com/watch?v=eZkx6rZrshQ 1.20 in..

As far as this topic, yes he is correct

 

 

Tue, 07/01/2014 - 16:40 | 4915083 markmotive
markmotive's picture

Get it right folks.

Money IS debt. Gold IS money.

http://seekingalpha.com/article/1254301-money-is-debt-gold-is-money

Tue, 07/01/2014 - 18:54 | 4915537 BigJim
BigJim's picture

 In American society, 'debt' and 'income' have become increasingly synonymous over the past 3 decades; but as Rick Santelli blasts (commonsensically), "they certainly shouldn't be."

Bzzzzt, sorry Rick, wrong answer! Debt IS income... if you're a bank.

Wed, 07/02/2014 - 03:19 | 4916877 ThirteenthFloor
ThirteenthFloor's picture

Rick's too late...Rumor has it USA already defaulted, citizens to find out soon.

I hear China foreclosed on FRB from two alt. sources now and the US defaulted around Oct. 2013 henceforth, 1) no more debt ceiling debate, 2) pay China first legislation in same Oct 2013, 3) China has direct access to US Treasury computers early 2013, 4) China banks are free to buy any American bank 2012, and 5) Dallas Fed on Pearl St. flies Chinese flag last week.

http://www.trunews.com/friday-june-27-2014-jim-willie/

Rumor has it now JPM was sold to the Chinese after they bought 1 Chase Plaza for 725m (sic).  In fact, looks like China has bought a bit more than just JPM prime RE with the tunnels running direct to the FRB gold vaults.

Can you say: "The Chinese are coming, the Chinese are coming, danger danger get from street".  To paraphrase "The Russians are coming".

These cities in CA are completely afloat (operate) on Chinese money...Fresno (home of the West coast IRS), San Leandro, Torrance.

http://www.mercurynews.com/breaking-news/ci_24113366/san-leandro-fly-fla...

Tue, 07/01/2014 - 22:12 | 4916250 Unknown User
Unknown User's picture

The gold bugs deliberately confusing the issue. Gold is a good like any other. Using goods for payment is barter, i.e., goods are exchange for other goods (like gold).  It’s not just a barter system it’s a fraudulent barter system because gold coins or gold backed bills use fractional reserve gold.  

When will the people finally get it that money is merely a representation of wealth and not the wealth itself.  Wealth is created by people, while money is created by a banking cartel that uses this fact to extract wealth from the people.

This is why “We the People” should “coin Money, regulate the Value thereof, and of foreign Coin”.

The end of f*ing story!  The way the founding fathers wanted it.

Wed, 07/02/2014 - 08:23 | 4917143 SuperRay
SuperRay's picture

What is money if not a stand-in for goods or services - bartering is just a system of exchange that is direct rather than indirect.  True, there has to be agreement that the money indeed represents the value of goods or services.  That's why the system hasn't imploded yet - because people (clueless people, or psychopathic people) still agree that a FRN represents the value that traditionally gold represents.  The difference between FRN and gold is that gold has 6,000 years of agreement that it is valuable.  That tradition is not going away, since it is the last bastion of agreement that has never been violated!  ultimately, everything is based on agreement!

Tue, 07/01/2014 - 23:27 | 4916516 TheRideNeverEnds
TheRideNeverEnds's picture

and if you use your debt based money to leverage more debt capital in the market to ramp up your notional debt exposure (aka go all in long e-minis) you could easily, and would have already just this year alone, more than doubled your debt money and been able to exchange the difference for real money.

Wed, 07/02/2014 - 08:21 | 4917128 ZH Snob
ZH Snob's picture

exactly, mark.  our currencies are NOTES OF DEBT.  the only backings they have are the pentagon and more debt.  it is babylonian money magik at its finest. 

people are so used to seeing these debt notes as having actual value that it is difficult for them to wrap their minds around the truth of what they work for, kill for and swindle for: more DEBT.

personally, I have been and will continue to cash out of this system with every extra penny I have because, fortunately, we can still buy real assets with this debt.  so get it while you can because the window is closing on the ill winds of the coming shit storm.

Tue, 07/01/2014 - 17:30 | 4915241 Cruel Aid
Cruel Aid's picture

classic

Tue, 07/01/2014 - 15:56 | 4914956 NOTaREALmerican
NOTaREALmerican's picture

It's a similar question to:  Who is worse, the drug (debt) pusher or the drug (debt) user?

Debt and drugs make the brain feel good,  that's why it's so addictive.  

Wed, 07/02/2014 - 02:19 | 4916800 Radical Marijuana
Radical Marijuana's picture

Although I thought your quip was cute, and so, I up-voted it, of course, it was also grossly superficial.

The international banksters were behind driving their political puppet politicians to create the "war on drugs." Governments that enforced frauds were the source, that was worse than both the drug user and the drug pusher.

https://www.youtube.com/watch?feature=player_embedded&v=c7peMvnqwEo

The FKN Newz on DRUGS

 

The whole system was basically debt slavery backed up by wars based on deceits. It is a vicious spiral which is automatically getting worse faster. Within a Money As Debt system, there is no more money if there is no more debt. Within a Money As Debt system, those who benefit the most are those who take the most advantage of that process of making "money" out of nothing, as debts. Those who try to avoid debts end up getting screwed overall, in the longer term.

The Money As Debt system is the result of the application of the methods of organized crime to dominate the political processes, so that frauds would be legalized, and thus enforced by governments, which frauds would thus fantastically benefit some special interests. However, people who want to go back to commodity backed money continue to deliberately ignore the deeper realities: MONEY IS MEASUREMENT BACKED BY MURDER.

Gold and sliver as money is the measurement of gold and silver backed by murder. Those who want to go backwards to return to honest and sound money tend to deliberately ignore that would only be possible IF there was an honest and sound murder system to back up that honest and sound money. Of course, THAT is why these problems are so damned difficult!

The presently existing systems were due to the methods of organized crime being able to capture control over the government. Those methods were both bribery and intimidation, but, most significantly, those methods also included paying for the assassinations of some politicians that could not otherwise be bribed or intimidated.

In fact, the debt controls depend upon the death controls. "Money" as paper, or encoded bursts of electricity, gets its value from that being necessary to pay taxes, as well as various other legal tender laws, whereby the force of the government makes that fiat money have value. Moreover, money is merely the most abstract form of private property, which does not exist outside of some system of public violence, because private property depends upon backing up claims with coercions. Human realities are always organized lies, operating robberies, because the production of destruction controls production.

Anyone who deliberately ignores that when they propose idealistic "monetary reforms" I regard as merely being a backwards reactionary revolutionary. Anyone who proposes "solutions" based on impossible ideals is spouting useless nonsense, that could only actually make the opposite happen in the real world.

INSIDE A MONEY AS DEBT SYSTEM, THAT KIND OF MONEY IS "INCOME," ESPECIALLY FOR THOSE WHO GET THE FIRST CRACK AT SPENDING THAT NEW MONEY WHICH WAS MADE OUT OF NOTHING AS DEBT. Of course, in the longer term, too much of that kind of control of production by the destructive effects of enforced frauds destroys the productive capacity. Therefore, in my view, the established systems of enforced frauds are going to drive themselves through to their own mad self-destruction, which will make monetary revolutions eventually happen. It is NOT possible to reform the established systems sufficiently, since they are fundamentally fraudulent, which make reconciling the human economies with the natural ecologies impossible to do in any straightforward ways.

Not only is it necessary in the shorter term to understand that the established systems are based on governments becoming the biggest form of organized crime, controlled by the best organized gang of criminals, but it is also imperative in the longer term to understand how and why that situation necessarily developed. The political economy was always inside the human ecology. The monetary system was always inside the military system. In that context, economics became success through fraud, while warfare became success through deceit.

Making the brain feel good becomes quite hyper-complicated inside of social systems where "success" depends upon participating in enforced frauds. It is almost impossible to assess either drugs or debts properly without that perspective. In general, most people make their brain feel good by believing in bullshit, mainly by the ways that they rationalize and justify how they make a living.

Inside of the current civilization, where the belief in bullshit cascades down from the ruling classes to all those they rule over, creating absurd State Religions, which reward those who agree with bullshit, while punishing those who do not agree with bullshit, both drugs and debt are so deeply buried under layer after layer of bullshit that it is practically impossible to perceive what the deeply buried more radical truth may be.

Tue, 07/01/2014 - 16:51 | 4915102 Theta_Burn
Theta_Burn's picture

From the down arrow response thus far Mr. Santelli is the clear winner here. Santelli and Mozilo for Prez.. on the fuck the losers that were shoveled money because they could scibble a signature ticket..

The enablers of all this <crickets>

My new anthem?  I like Dick, I like Dick....

Tue, 07/01/2014 - 22:01 | 4915906 Ness.
Ness.'s picture

You do realize that it's been the policy of the administration, thru the FED's printing as much money they can, to push debt onto the public using the banks as the vehicle, right?  None of this is possible without the approval of the Prez and the FED.  I hate bankers too, but let's be honest about where the responsibility lies and who pays the ultimate cost.  

Wed, 07/02/2014 - 09:52 | 4917491 ATM
ATM's picture

The banks do not have the force of law behind them. The bureaucrats do however.

Tue, 07/01/2014 - 23:50 | 4916595 MeMongo
MeMongo's picture

@theta

Mongo is convinced you do indeed "like dick" Now if you and goatfuker, and top gear..who likes it in the rear would kindly pound some salt, the regular dudes can get back to some regular dialogue. Oh and thank you kindly in advance!

Wed, 07/02/2014 - 00:41 | 4916710 Savyindallas
Savyindallas's picture

You like dick? Keep your sexual preferences out of this discussion. There are other forums for such nonsense.

Wed, 07/02/2014 - 01:15 | 4916774 Cymore Duttz
Cymore Duttz's picture

The auto loans to sub-prime deadbeats is far worse than they are telling people.  There is no apple to apple comparison in Fico scores with now to pre-2007. The "New" sub prime loans are far worse risk than the old sub prime loans.

I base this on reviewing fico scores of my would be renters, with a full credit history not just a raw score. Since 2007, Fico scores have been greatly inflated.  Renters are scoring 50 to 100 points higher than they use to with similar histories.  

These sub prime loans are to people who would have been considered totally unqualified just a few years ago.  They will go bust in a big way. 

Wed, 07/02/2014 - 05:52 | 4916948 NoPension
NoPension's picture

They're just grading on a curve,dude.

Wed, 07/02/2014 - 07:18 | 4917011 Eyeroller
Eyeroller's picture

And history is again "rhyming".

We saw the same thing in the Subprime Housing Bubble of 2008.

HUD policy of pushing the "good intention" that everyone had a"right" to own a house saw loans given to people who had no hope in hell of keeping up with the monthly payments.

We all know how that ended...

Wed, 07/02/2014 - 01:15 | 4916775 Cymore Duttz
Cymore Duttz's picture

The auto loans to sub-prime deadbeats is far worse than they are telling people.  There is no apple to apple comparison in Fico scores with now to pre-2007. The "New" sub prime loans are far worse risk than the old sub prime loans.

I base this on reviewing fico scores of my would be renters, with a full credit history not just a raw score. Since 2007, Fico scores have been greatly inflated.  Renters are scoring 50 to 100 points higher than they use to with similar histories.  

These sub prime loans are to people who would have been considered totally unqualified just a few years ago.  They will go bust in a big way. 

Tue, 07/01/2014 - 15:50 | 4914926 digitlman
digitlman's picture

FINALLY.

Tue, 07/01/2014 - 15:53 | 4914936 insanelysane
insanelysane's picture

Rick should have read this from his own site.  There really isn't a problem with student debt because most of it will be paid off....eventually....as long as people live longer and work for a good 60 years of their life.

http://www.cnbc.com/id/101797721

Tue, 07/01/2014 - 18:40 | 4915494 Midnight Rider
Midnight Rider's picture

Two problems - While these students are piling up more and more debt, there are fewer and fewer good paying jobs to pay it off with. And secondly, a very good deal of this loan money is being used to pay living expenses, if not most of it for students only registered for an online basket weaving course in order to qualify as a student. I would venture a guess that a whole lot of this loaned money is not buying education.

Wed, 07/02/2014 - 05:55 | 4916951 NoPension
NoPension's picture

Zero.gov is going to forgive student debt, one day in the future. When they need the votes.

Wed, 07/02/2014 - 08:53 | 4917265 thorsmjollnir
thorsmjollnir's picture

*Except for people who qualify for student loan forgiveness.

Tue, 07/01/2014 - 15:54 | 4914938 NOTaREALmerican
NOTaREALmerican's picture

Just another hippy pinko who hates everything Merica stands for, and the troops! 

Tue, 07/01/2014 - 15:53 | 4914939 hustler etiquette
hustler etiquette's picture

I expected a passionate delivery. I am dissappoint.

Tue, 07/01/2014 - 17:07 | 4915165 what's that smell
what&#039;s that smell's picture

"we can't fuel an economy on debt." rick santelli via cnbc.

who said we are fueling an economy on debt?

hey rick! what we are doing is fueling debt slavery and usury and infinite fiat on debt.

rick and his talk about the "economy" is soooooooooooo buggy whip.

Tue, 07/01/2014 - 15:54 | 4914943 stutes33
stutes33's picture

You still watch this channel?

Tue, 07/01/2014 - 15:54 | 4914946 Uncle Sugar
Uncle Sugar's picture

As long as society believes 0's and 1's on a computer screen are wealth, the game will continue.

 

Yellen will win the battle, but lose the war.

 

Wed, 07/02/2014 - 03:55 | 4916889 Dementor
Dementor's picture

Someone missed out on bitcoins.

So did I.

Wed, 07/02/2014 - 03:55 | 4916890 Dementor
Dementor's picture

Someone missed out on bitcoins.

So did I.

Wed, 07/02/2014 - 03:56 | 4916891 Dementor
Dementor's picture

Someone missed out on bitcoins.

So did I.

Wed, 07/02/2014 - 03:56 | 4916892 Dementor
Dementor's picture

Someone missed out on bitcoins.

So did I.

Wed, 07/02/2014 - 06:52 | 4916983 snr-moment
snr-moment's picture

Small wonder.  Never too late to put your money where your mouth is.

Tue, 07/01/2014 - 15:56 | 4914953 Gtinkham
Gtinkham's picture

That's because money = debt.

Tue, 07/01/2014 - 16:08 | 4914996 Goldilocks
Goldilocks's picture

...furthermoar, economist = parasite

Tue, 07/01/2014 - 16:33 | 4915062 Kirk2NCC1701
Kirk2NCC1701's picture

I'd argue that Banker = Parasite, and
Economist = Bankster Shill.

Tue, 07/01/2014 - 17:21 | 4915214 NotApplicable
NotApplicable's picture

Why not both?

Wed, 07/02/2014 - 00:07 | 4916637 sylviasays
sylviasays's picture

"I'd argue that Banker = Parasite, and
Economist = Bankster Shill."

You forgot to mention politicians...

Politicians are the same all over. They promise to build a bridge even where there is no river. ~Nikita Khrushchev

Wed, 07/02/2014 - 01:41 | 4916811 Okienomics
Okienomics's picture

Economist = parasite
Or
Economist = Bankers shill

As an economist and middle man, having nothing to do with banks per se, I'd have to go with the former.

And yes, in a fiat reserve margin leveraged banking system, money is debt, all debt, and nothing but debt. Debt collapses, money vaporizes.

Tue, 07/01/2014 - 15:57 | 4914958 alien-IQ
alien-IQ's picture

in a society that values the illusion more than the reality, this debt boom should come as no surprise.

Tue, 07/01/2014 - 15:58 | 4914961 DOGGONE
DOGGONE's picture

The Public Be Suckered
http://patrick.net/forum/?p=1230886

Tue, 07/01/2014 - 15:59 | 4914962 Rainman
Rainman's picture

Debt most certainly is income when you have no intention of paying it back.

Driving that FICO to zero is 21st century #winning ! no worry ...Your loan will still get approved !

Tue, 07/01/2014 - 16:01 | 4914974 Yen Cross
Yen Cross's picture

     If you can squat in a foreclosed house for a few years, squating in a foreclosed car should be a piece of cake...

Wed, 07/02/2014 - 09:09 | 4917317 Colonel Klink
Colonel Klink's picture

They can't tow away a house.

Tue, 07/01/2014 - 16:02 | 4914979 Stoploss
Stoploss's picture

If you sell debt, you can accumulate moar debt, by paying down old debt with new debt issuance, which gives the appearance of debt income to which you can sell debt against to accumulate moar debt!

 

Back in the 80's, people would use cocaine to stay up longer, work harder, to make more money to buy more coc to stay up longer, work harder, to make more money to buy more coc...

 

God Damn i miss the 80's......... That shit actually worked.

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