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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. 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.

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.

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.

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


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.

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


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


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 long as people live longer and work for a good 60 years of their life.

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 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
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

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.

Tue, 07/01/2014 - 16:09 | 4915004 Sandmann
Sandmann's picture

but only with Fractional Reserve Banking which the US leverages even higher with Buying on Margin

Tue, 07/01/2014 - 16:04 | 4914986 MASTER OF UNIVERSE

Is there an echo in here?

Tue, 07/01/2014 - 16:08 | 4914999 Sandmann
Sandmann's picture

the servicing drains all the available cash flows and reduces the growth potential."

This is so obvious that it beggars belief that politicians and bankers are so blind. It is turning Interest into Capital and extracting it from any productive use. It is massive liquidation of all non-financial assets which is what you expect under occupation - it a sort of Morgenthau Plan.

We now see why Usury Laws were needed and why noone is permitted to create a Perpetual Trust

Tue, 07/01/2014 - 16:19 | 4915038 NOTaREALmerican
NOTaREALmerican's picture

Re:  Usury LAWS!!!

You must be one of those people who wants to punish the job creators who made this great-n-glorious country great-n-glorious, commie!

Tue, 07/01/2014 - 18:05 | 4915375 Bear
Bear's picture

They are not blind ... they use this debt to buy power that in turn builds their personal wealth. I would like to see a study of past and current Congress members wealth accumulation profiles (Hillary Clinton aside)

Wed, 07/02/2014 - 07:34 | 4917033 VAD
VAD's picture

They're not blind.  They know exactly what they're doing and what the outcomes will be.  It is INTENTIONAL.

Tue, 07/01/2014 - 16:08 | 4915002 D-liverSil-ver
D-liverSil-ver's picture

I drive a 1992 toyota tercel because I don't want a car payment.

My neighbors have two new BMW's (leased) and two Ford trucks, one is a Jacked up F-250 diesel with big wheels.

I figure just the wheels and tires on the Diesel are worth more than both of my cars.

Tue, 07/01/2014 - 16:10 | 4915007 Sandmann
Sandmann's picture

You probably have real metal in your car and why should consumer goods be replaced more often than the producer goods that made them ?

Tue, 07/01/2014 - 19:01 | 4915566 Duude
Duude's picture

I got almost 220K out of my 1986 Toyota Tercel till some dipshit rear-ended me on the freeway back in 2002. Was still getting close to 35 mpg when I was done with it. Had no idea such a little engine could run as long as it did with no major repairs.  I hardly even maintained it. It maintained itself. The ultimate frugal vehicle.

Tue, 07/01/2014 - 16:20 | 4915039 replaceme
replaceme's picture

I assumed he was talking about debt as applied to a nation, not consumer - printing money to service debt=digging a hole.  No?

Tue, 07/01/2014 - 16:38 | 4915078 NOTaREALmerican
NOTaREALmerican's picture

I don't recall Uncle Sam buying very many cars with subprime auto-loans.  

Tue, 07/01/2014 - 20:35 | 4915919 oklaboy
oklaboy's picture

you mean the 40% that is borrowed by the Treasury?

Tue, 07/01/2014 - 16:27 | 4915051 Jackagain
Jackagain's picture

Come on Rick baby...everyone knows that money is debt.

Tue, 07/01/2014 - 21:33 | 4916134 realWhiteNight123129
realWhiteNight123129's picture

This interesting.

John Galbraith should go and get educated and read Henry Thornton.

Commercial Banks never ever create money. They create currency. (Only teh central bank create money today, in the past the mint was creating money but only at the will of hte market, bringing their jewelry, their bullion to be minted, not at the will of central planners). Monetary policy as far as M0 was driven by the market.

Bank can create currency against credit (like a receivable from a merchant) or from someone bringing money to the bank (in the old days gold coins, today FRNs, i.e. M0).

Currency can fail (Cyprus) money can not (gold coins in the past, ECB notes today)

Currency can be redeemed for money (hence Cypriot running to get ECB bank notes today or Gold coins in the past).


Currency deposits can bear interest, money should not, if if does... trouble... a cardinal rule is violated.


The Masses know intuitively the difference between money and currency, while Galbraith is totally lost. Typical of post 1930s mumbo jumbo from Keynes who had only 1 semester Marshall economics at Cambridge before writing gibberish and never read Thornton, Tooke etc....


Today the most idiotic people (including Krugman) get to speak....

Bitcoin is not a currency but a form of money (not created by a bank, not reedemable in something else, and not bearing interest)

Credit is a promise to repay money in the future.











Tue, 07/01/2014 - 16:27 | 4915052 SirTaxedAlot
SirTaxedAlot's picture

Easy, we just go to a three income household. Just have you kids start working and pay into the household.

Tue, 07/01/2014 - 16:48 | 4915107 Kirk2NCC1701
Kirk2NCC1701's picture

All joking/sarcasm aside, that's what more and more families are doing out of necessity.

Some (ME) cultures take this to an extreme, and live in a multifamily Compound. Which has its advantages.

Wed, 07/02/2014 - 08:29 | 4917163 itstippy
itstippy's picture

We used to call those "family farms" or "family businesses".  I grew up surrounded by them (I'm an old fart).  

Back in High School our football team sucked.  Our school had lots of huge kids, strong as oxen; however, they were farm kids and had to go straight home after school to do chores.  The football coach was stuck fielding a team of city boys who had time to play recreational sports after school.  Our entire conference was made up of teams like that,

Tue, 07/01/2014 - 16:28 | 4915056 yogibear
yogibear's picture

Max out your debt and get wealthy.

Take out 125% Loan to value, plus a Home equity loan and buy PMs.

Then default and leave the central banks with the debt. Seems logical to me.

Tue, 07/01/2014 - 16:31 | 4915059 TeethVillage88s
TeethVillage88s's picture

I'm with Santelli, I don't get it.

It seems like Mind Control or Brainwashing.

maybe Snowden or Julian Asange or Cryptome can Publish something.

Here is a Great Example to pass around.

Pete Stark Blows Up Over National Debt

Pete Stark Obviously was Educated in Washington DC or some Government Leadership School

Tue, 07/01/2014 - 16:37 | 4915073 NOTaREALmerican
NOTaREALmerican's picture

Re:  I don't get it.

I don't get, what's not to get.    Only people with Economic Morality OCD wouldn't take free money.     Most humans are pathological optimists, what could possible go wrong by having more stuff?

Tue, 07/01/2014 - 16:40 | 4915082 OC Sure
OC Sure's picture

Rick sounds like he wants to say what he is not allowed to say.

The problem is that the debt is facilitated by counterfeit and not money.

"Good debt is represented by money, the money represents the product of work, the work is necessary to meet the demands of living. Bad debt is represented by counterfeit, the counterfeit represents the absence of product, the absence of product represents the impersonation of work, the impersonation of work represents the necessity to steal to meet the demands of living." -

Tue, 07/01/2014 - 23:40 | 4916559 Morla
Morla's picture

Well, sounding like he wants to say it is the next best thing to saying it. Better than nothing :)

Tue, 07/01/2014 - 16:46 | 4915099 TalkToLind
TalkToLind's picture

I like to use the penis analogy to explain income vs debt:     Income = erection.  More income = larger erection.  Debt = shrinkage.  Too much debt = more shrinkage...until the penis draws into the body to create a new orifice.  Is there anyone out there who can't grasp this concept?

Tue, 07/01/2014 - 18:21 | 4915434 remain calm
remain calm's picture

So now I understand why the economy emulates Bernanke.

Tue, 07/01/2014 - 16:55 | 4915125 ebworthen
ebworthen's picture

Debt is not income?  Blasphemy!

Well, debt is income for .gov, corporations, and banks because they don't go bankrupt.

Bail-outs and free money for everyone except the lowly citizen; all hail the Kleptoligarchy!

Tue, 07/01/2014 - 17:32 | 4915217 Chuck Knoblauch
Chuck Knoblauch's picture

I deserve a new car.

I'm entitled to it.

I cannot afford a new car.

I will borrow the money.

Some idiot will loan it to me.

The car dearler books it as revenue.

It's income to the dealer.

The consumer will just lose the car when repossessed.

The car is the only collateral for the loan.

The dealer doesn't have to reverse the sale.

In fact, bad loans are encouraged by the finance company.

Who the hell is financing all these bad loans?

The Fed?

Wow. How do I get in on that action?

It sounds like a growth industry.


Wed, 07/02/2014 - 07:00 | 4916991 snr-moment
snr-moment's picture

No different than the credit card companies.  Several years back wife's purse was stolen. While we were still sitting at the restaurant from which it was stolen, the thief went to a gas station to see if she had noticed yet, than ran and bought 5k worth of electronics.  They have his face on video but  didn't do anything about it.

It's insured, they said.

Now, no signature required under $50.00.

Tue, 07/01/2014 - 17:33 | 4915256 honestann
honestann's picture

At best... debt pulls later economic activity forward to the present.  This makes the "now" (the short term) appear better (more buying == more economic activity) and makes the "later" (the medium/long term) appear worse.

Here is a simple and slightly exaggerated example to illustrate in concrete terms.

2010 - income $25K : borrowing $25K : spending $50K
2011 - income $25K : borrowing $25K : spending $50K
2012 - income $25K : borrowing $25K : spending $50K
2013 - income $25K : borrowing $25K : spending $50K

For years, this individual enjoys the lifestyle of someone who earns $50K.  However, at some point (4 years in this example), he reaches his "credit limit" or for some reason can't or won't borrow any more.  What happens next?

2014 - income $25K : repayment $10K : spending $15K
2015 - income $25K : repayment $10K : spending $15K
2016 - income $25K : repayment $10K : spending $15K
2017 - income $25K : repayment $10K : spending $15K
2018 - income $25K : repayment $10K : spending $15K
2019 - income $25K : repayment $10K : spending $15K
2020 - income $25K : repayment $10K : spending $15K
2021 - income $25K : repayment $10K : spending $15K
2022 - income $25K : repayment $10K : spending $15K
2023 - income $25K : repayment $10K : spending $15K
2024 - income $25K : repayment $10K : spending $15K
2025 - income $25K : repayment $10K : spending $15K
2026 - income $25K : repayment $10K : spending $15K
2027 - income $25K : repayment $10K : spending $15K
2028 - income $25K : repayment $10K : spending $15K
2029 - income $25K : repayment $10K : spending $15K
2030 - income $25K : repayment $10K : spending $15K
2031 - income $25K : repayment $10K : spending $15K
2032 - income $25K : repayment $10K : spending $15K
2033 - income $25K : repayment $10K : spending $15K

As we see, the borrowing made the "personal economy" of this individual look good for the first 4 years (and helped boost the "public economy" too).

But the next 20 years this individual can only spend $15K on goods, because the rest of his current income gets sent to his lenders to pay back his loans... plus interest.  Of course, exactly how many years belong in the above depends on what mix of interest rates his loans carry.


One nasty consequence of fiat, fake, fraud, fiction, fantasy, fractional-reserve toilet-paper debt note currency is... lender don't have to earn the money they lend (just tap a few keys to create it out of thin air), so they have absolutely no limit to how much each of them can lend.  And lending out boatloads of money in the short run looks great on the books... in the short run (hence big fat bonuses for bosses).

As a result, in a fiat system like this, lenders are everywhere, trying every trick in the book to entice individuals to borrow, borrow, borrow and spend, spend, spend.  And the government loves this too, because it "boosts GDP" (as measured by the liars who create government statistics).

During the last 40 years or so, credit cards were invented... then gradually became popular, then gradually every possible form of debt got invented and promoted, and all stigma against debt vanished, and almost all restraint vanished, and the entire western world got as deep into debt as they possibly could.

Which means... all the long-term economic activity that could be pulled forward into the short-term, has been pulled into the short-term.

The world has now reached that long term.  Now is the time for the entire western world to greatly reduce economic activity to pay back their earlier consumption.

This is the price of being irresponsible.

Tough turkey... everyone asked for it.

The point being (in the context of this article and federal reserve policies), what the federal reserve is doing cannot possibly fix the economy.  The economic activity they want to cause has already been enjoyed in the past.  It is gone.  What's worse, overall, debt has a depressive effect, meaning people don't even get to enjoy the money they earned, because quite of bit of it gets consumed by interest.


PS:  Yes, a few of us "weirdos" never borrowed money.  But we are so few at this point in history, we barely ripple the curves.


Tue, 07/01/2014 - 19:12 | 4915628 LooseLee
LooseLee's picture

Bravo!I knew there was something about you I liked!

Wed, 07/02/2014 - 11:43 | 4917901 ThirteenthFloor
ThirteenthFloor's picture

Yes Bravo. To add how this applies to the 'free sovereign state'....

Each sucessive POTUS and administration (generation) inherits more debt from the previous, making it appear he is worse spender than his predecessor

Service of interest grows payment of principal becomes impossible and default (aka bankuptcy) is inevitable.

Future potential investment monies are drawn into debt payments, making growth slow, reducing income, increasing debt principal

76% of Ibero-American debt payments are only for interest at this point

Weapons of mass financial destruction (MFD) are built to keep it going.

Tue, 07/01/2014 - 17:38 | 4915278 Chuck Knoblauch
Chuck Knoblauch's picture

10 fold increase in sub-prime car loans?

$2B to $22B?


Tue, 07/01/2014 - 18:00 | 4915366 Bear
Bear's picture

FICO at 775 ... I'm golden

Tue, 07/01/2014 - 18:49 | 4915509 Hongcha
Hongcha's picture

I'm 800+ ... was 825 until every cocksucking cc company and refi joint down the street started making 'inquiries' ...

Tue, 07/01/2014 - 19:54 | 4915782 daveO
daveO's picture

Freezing your credit might help. I did this years ago. It got rid of most CC offers and inquiries. You can also stop most all junk mail this way. It was free with one agency(in 2009). It cost $10 each, at the other two. It was worth it to me just for the reduced mail. You had to pay to unfreeze, but it's still better than trusting/paying Lifelock to catch everything. 

Tue, 07/01/2014 - 18:24 | 4915443 windcatcher
windcatcher's picture


Debt is wealth” is unsustainable.


Economic collapse is inevitable and coming in the next few months-ahh-next year (2010). Ha. Ha.


Wealth is ownership of assets that is free and clear of debt from the banksters. When the music stops, the banksters will legally own all the assets and the slave public will own the debt. Ha. Ha.


Tue, 07/01/2014 - 23:19 | 4916488 SilverIsMoney
SilverIsMoney's picture

You can only push the "slaves" so far until they rise up and murder you. Somehow i do not think this is going to go according to their plans.

Wed, 07/02/2014 - 00:12 | 4916645 Savyindallas
Savyindallas's picture

That's why they have Homeland Security armed to the teeth - and FEMA camps ready  -they know the well armed people will be coming after them. Let's hope they are not well armed enough  -and that the sheeple are not as stupid as they think.  CW2 (Civil war 2) is coming. Not sure how it will play out, but I hope a united America will prevail over the AmeriKan Internationalists who seek to complete their enslavement of this country.  

Tue, 07/01/2014 - 18:49 | 4915513 Hongcha
Hongcha's picture

Santelli isn't slamming a goddamned thing.  He doesn't name names.   He does not give a shit, he is just a rodeo clown like Cramer.  He piles into the ol' Towne Car for lunch at the 4 Seasons and kisses all the hands of power.  He laughs at the fucked mouthbreathers all around him ...

Wed, 07/02/2014 - 00:05 | 4916620 Savyindallas
Savyindallas's picture

I disagee  -he only gets 2 minute soundbites. There's only so much you can do in 2 minutes  -if he started naming names and specifics, he'd be off the air. What he says in his soundbites is true  -give him credit for that. His sponsors realize that to maintain some semblence of credibilty, someone has to tell it like it is. The elites who control the mainstream media can always cover their ass later when things collapse by telling us they warned us  - that's why they put on people like santelli.

The Truth does little, if any good, if it is always buried on page 23 of the New York Times  -it's what's on page 1 - the Headlines  -and which is repeated day after day in screaming headlines that counts. When the sheeple see it buried on page 23, they are lulled into complacency  -they read the headlines, then go to the sports page, or the weather or their horoscope, or the entertainment section. That's how the media is rigged and controls us. 

Tue, 07/01/2014 - 19:22 | 4915673 James Dandy
James Dandy's picture

Santelli isn't real, ladies and gentlemen.  The fact he's on CNBC should be your first hint.  He's been ranting for years, the only thing he's useful for is prepping you that something is about to bust.

Tue, 07/01/2014 - 22:24 | 4916322 Chuck Knoblauch
Chuck Knoblauch's picture

And what did he say that you didn't agree with?

Tue, 07/01/2014 - 23:34 | 4916548 Morla
Morla's picture

The problem with this kind of cynicism is that it's fatalistic by nature. When you assume that every apparent ally is an enemy, every apparent victory is a defeat.. You lose even if you're right.

It's a bit like the old "free will" argument.. Perhaps every action you take has been predetermined since the big bang, even if that's true you gain NOTHING by believing it. If there's even a 1% chance that you have free will, you're much better off assuming that you do.

Same with this, at least try and hope Santelli is genuine, as what he's saying appears to be true. Maybe the cartel doesn't have as absolute of control as you think. Even if they do and he's "controlled opposition", there's the odd chance that they've made a mistake by letting him play that role. Just remember that you must leave SOME victory conditions open, or you may as well just go watch American Idol and forget everything.

Tue, 07/01/2014 - 23:56 | 4916610 Savyindallas
Savyindallas's picture

I think Rick is genuine. The mainstreammedia has to put on someone telling the truth or they lose all credibility  -and even the sheeple will start to figure things out.

Tue, 07/01/2014 - 21:56 | 4916212 luna_man
luna_man's picture



Santelli may not be for real, atleast he's not cheering the CRIMINALS and their acts like alot of the clowns you see and hear almost everywhere!


get'em santelli

Tue, 07/01/2014 - 22:30 | 4916344 AdvancingTime
AdvancingTime's picture

 It might soon become apparent the economic efficiency of credit is beginning to collapse and the additional money poured into the system coupled with lower rates can no longer drive the economy forward.  When this happens we are at the end game.

At some point the return on loaning money is simply not worth the risk!  Why do you want to loan money if most likely you will never be repaid or repaid with something that is totally worthless? When this happens the only safe place to store wealth will be in "tangible assets" and the only lenders will be those who print the money that nobody wants.

The collapse of credit can pose major problems such as what we saw when many sellers were forced to demand payment up front before shipping goods in 2008. More on this subject below.

Tue, 07/01/2014 - 23:17 | 4916480 TWFTG
TWFTG's picture

Debt is the new slavery !

Tue, 07/01/2014 - 23:17 | 4916481 TWFTG
TWFTG's picture

Debt is the new slavery !

Tue, 07/01/2014 - 23:48 | 4916585 robnume
robnume's picture

He's not really trying to say that credit = debt, is he? OMG!! It's about time this guy got it right.

Wed, 07/02/2014 - 10:20 | 4917612 Againstthelie
Againstthelie's picture

All money in this regime is only created as debt with compound interest! Money as debt with compound interest enforces exponential growth.

What Santelli suggests, that consumer debt expansion was bad, while producer credit expansion was good is nothing but disinformation to distract from the important aspect.

Tue, 07/01/2014 - 23:53 | 4916602 Savyindallas
Savyindallas's picture

We can't fuel an economy on debt?  Sure we can  - for at least another month or two- maybe 6 -possibly even another year. Where does Rick come up with these silly statements?

Wed, 07/02/2014 - 00:23 | 4916671 Spungo
Spungo's picture

I think we've reached a permanently parabolic debt plateau

Wed, 07/02/2014 - 01:59 | 4916825 quikwit
quikwit's picture

Debt is wealth.  For the secured creditor.

Wed, 07/02/2014 - 02:22 | 4916846 Peter Pan
Peter Pan's picture

Define secured and secured against what?

Wed, 07/02/2014 - 03:08 | 4916869 bunnyswanson
bunnyswanson's picture



39. We shall so hedge about our system of accounting that neither the ruler nor the most insignificant public servant will be in a position to divert even the smallest sum from its destination without detection or to direct it in another direction except that which will be once fixed in a definite plan of action. (Is this why a "private corporation," known as the "Internal Revenue Service," is in charge of collecting the "payments" of the "Income Taxes" and the IRS always deposits those "payments" to the Federal Reserve bank and never to the Treasury of the United States??).

Wed, 07/02/2014 - 05:32 | 4916936 crazytechnician
crazytechnician's picture

Anybody who believes a word of that needs to grow a brain.

Wed, 07/02/2014 - 02:21 | 4916843 Peter Pan
Peter Pan's picture

About the closest you will come to consuming and investing at the same time is when you buy gold jewellery.

Wed, 07/02/2014 - 05:22 | 4916931 crazytechnician
crazytechnician's picture

But Debt IS Wealth , just ask Krugman.

Wed, 07/02/2014 - 09:47 | 4917464 silentboom
silentboom's picture

I loved him in the odd couple.

Wed, 07/02/2014 - 13:36 | 4918389 Duude
Duude's picture

The odd couple of Krugman/Reality, or Krugman/Facts?

Wed, 07/02/2014 - 07:07 | 4916998 Bemused Observer
Bemused Observer's picture

Well, perhaps Mr. Santelli is finally starting to realize that the debt problem might NOT be the result of his "neighbor putting in a new bathroom"...oh yes, I remember THAT rant very well.../-:

It's a little hard to keep pointing at the individual when it becomes clear that the entire system is DESIGNED this way!

Wed, 07/02/2014 - 07:22 | 4917013 Racer
Racer's picture

And the media is full of 'getting onto the housing ladder' and 'the dream of owning your own home'

all con tricks.. note:

'ladder' implying always going up.

'dream' something very pleasant

'owning' as in yours

'own home' something that is your own personal space

When none of these is true!  It is a debt millstone hanging round your neck, a property owned by the bank landlord, who can bankrupt you and chuck you out of it's house if you fail to pail your debt on time. You have to not only insure the bank landlord's property but also to pay taxes on it, maintain it and in maintaining it pay 20% VAT to the government having already paid taxes on your earnings!

Wed, 07/02/2014 - 09:53 | 4917489 Red Raspberry
Red Raspberry's picture

This is 100% true.  Even if you do outright 'own' the property you sitll must pay a yearly tax on it or risk the governemt confiscating of it for taxes unpaid.  As the economy has stalled most property values have not risin with inflation.  Yet the taxes must keep rising to keep up with inflation and the ever increasing governmt pensions.

Wed, 07/02/2014 - 08:07 | 4917092 LawsofPhysics
LawsofPhysics's picture

But debt (and the interest that is collected) is in fact income for the creditor.

Wed, 07/02/2014 - 08:31 | 4917176 Magooo
Wed, 07/02/2014 - 08:31 | 4917180 gallaghd5099
gallaghd5099's picture

I find it diifficult to listen and read what Santelli spouts. It has been almost 6 years and he has been completely wrong. Not a liitle bit wrong, not right once in a while, completely and totally wrong. If anyone, including himself, had listened to his advice and rantings you would be broke. That publications still even bother to print his rants is another amazing victory for the totally wrong ranters. We have huge challenges in front of us as a nation and individually and we need serious people to discuss them, not total idiots.

Wed, 07/02/2014 - 09:43 | 4917442 silentboom
silentboom's picture

I guess if you jumped out a window, the guy who warned you would be wrong until you hit the ground.

Wed, 07/02/2014 - 10:00 | 4917518 BeetleBailey
BeetleBailey's picture

OK smart guy....find the "serious people" then.

You fucking won't.

"Serious people" have left the fucking building/ARE doing what Santelli suggests...and Santelli does not give investment advice either. Unlike Jim Crapper....

Far from a "total idiot", Santelli is the lone voice of reason, mixed in with the fucking douchebags/Obamaviks/market taint lickers among cnBULLSHITc....

Wed, 07/02/2014 - 09:48 | 4917470 Marley
Marley's picture

Santelli is a Koch sucking idiot.

Wed, 07/02/2014 - 10:08 | 4917509 Againstthelie
Againstthelie's picture

"We can't fuel the economy on debt".

All money in this system is only created as debt, enforcing exponential compound interest.

So Santelli is just another liar who claims that exponential growth on a limited planet was possible, only if the creation of debt would be shifted from consumer credit expansion to producer credit expansion.

BS for the conservative sheeple, while the consumer credit expansion propagandists spread the same BS for the leftist sheeple. But both are sheeple and do not recognize that money as debt with compound interest is the force that needs exponential growth otherwise it collapses - just like cancer, which also grows exponentially. Until the organism dies...

Wed, 07/02/2014 - 10:36 | 4917662 Disenchanted
Disenchanted's picture

Guess what...Income does not equal wealth either.

Wed, 07/02/2014 - 10:38 | 4917670 sbenard
sbenard's picture

Santelli -- the best mind at CNBC. Okay,he's the ONLY mind at CNBC! But a good one!

Wed, 07/02/2014 - 10:50 | 4917699 Comte d'herblay
Comte d&#039;herblay's picture

wow....Debt is not Wealth??

How stupid of you, Santelli.

I personally know two multimillionaires who declared bankruptcy twice and now live in their dotage with many millions of borrowed dollars they NEVER have to pay back.

I can't imagine what those who can borrow billions have for a lifestyle now, but I'm going to bet they have yachts, multilple mistresses on multiple continents with bodacious Ta-Tas, and a stash to rival the most honest billionaires on the planet.

As the saying goes, "if I owe a hundred thousand on my house and can't pay it, I've got a problem.  If I owe the bank ten million dollars, THEY have a problem.

Debt (which is really cash, or a credit to my bank account by the bank) is indeed wealth.  

All you need to convert a billion dollars that you borrowed to your own personal wealth ( or your wife and family) is a good Bankruptcy attorney, no shame, or apologetic attitude and dollop of Chutzpah. 

Then Viola!!


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