The Sermon On The Mount[ain Of Debt]

Tyler Durden's picture

Via Global Macro Monitor,

“Blessed are the young, for they shall inherit the national debt.” – President Herbert Hoover

The Hoover administration thought there was no room and was ideologically opposed to fiscal expansion to stimulate aggregate demand.  Furthermore, Keynesian theory was not even developed at the time.  The General Theory of Employment, Interest and Money  was not published until February 1936.

A policy error, partially due out of  ignorance, that led to the Great Depression, though it was monetary policy and the Fed’s failure as “lender of last resort” that “put the Great in the Great Depression.”

…what happened is that [the Federal Reserve] followed policies which led to a decline in the quantity of money by a third. For every $100 in paper money, in deposits, in cash, in currency, in existence in 1929, by the time you got to 1933 there was only about $65, $66 left. And that extraordinary collapse in the banking system, with about a third of the banks failing from beginning to end, with millions of people having their savings essentially washed out, that decline was utterly unnecessary  – Milton Friedman

Here is Ben Bernanke,

The problem within the Fed was largely doctrinal: Fed officials appeared to subscribe to Treasury Secretary Andrew Mellon’s infamous ‘liquidationist’ thesis, that weeding out “weak” banks was a harsh but necessary prerequisite to the recovery of the banking system. Moreover, most of the failing banks were small banks (as opposed to what we would now call money-center banks) and not members of the Federal Reserve System. Thus the Fed saw no particular need to try to stem the panics. At the same time, the large banks – which would have intervened before the founding of the Fed – felt that protecting their smaller brethren was no longer their responsibility. Indeed, since the large banks felt confident that the Fed would protect them if necessary, the weeding out of small competitors was a positive good, from their point of view. – Ben Bernanke

National Debt

06/29/1929 =  16,931,088,484.10    (16.8 % of GDP)

 

09/20/2017 =  20,179,769,858,967.22     (104.9 % of GDP)

Source:  U.S. Treasury Department

How many generations can keep “kicking the can down the road”?

Ernest Hemingway “kicking the can the down the road” in Sun Valley, Idaho.

Have we finally bumped up against the upper bound of the debt limit?   “This Time Is Different.”

Prepare for the “clash of generations.”

It has already started.

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Akzed's picture

How many generations can keep “kicking the can down the road”?

Is that a Bob Dylan lyric?

IH8OBAMA's picture

Nobody will inherit the debt.  Dispite talk of doing the opposite, the FRB will, from time to time, buy up more trillions of Treasuries and as they mature in the FRB vaults they will be quietly retired without payment from the Treasury, thus reducing the debt as needed.

ergatz's picture

With The Sermon On The Mount, God granted salvation.

With The Mountain of Debt, (((they))) are enslaving us. https://goo.gl/bFYusM

38BWD22's picture

+ 12 for salvation comment

stacking12321's picture

Die, spammer!
And you're enslaving yourselves.
And don't be a pathetic loser who blames others for your failings.
No one can force you to take on debt you don't want.

BigJim's picture

Yes, you can always choose to go to prison instead of paying "your" taxes.

rwe2late's picture

Yea!, I can repudiate the debts assumed by the federal, state, and local governments,

and I will not "owe" anything or be forced to help pay off "their" obligations ?

As for taxes, I can avoid them by giving up my house and property,

not working for an employer who deducts income taxes or SS/Medicare (tossed into general fund),

and not purchasing anything which is taxed (like fuel or clothing).

Seems so easy. Why doesn't everyone do that?

 

Arnold's picture

Three hots and a cot, with sex benefits.
And broke to the reins by lawyers to get there.
Very handsome retirement package you offer there.
I'll think about it.

JoJo Kracko's picture

Is Japan quietly retiring their debt?   Why not?

oDumbo's picture

I was considering down voting you, but I love your name, so it’s an upvote instead.

Antifaschistische's picture

...let's go with your thesis.

So...the trillions of dollars issued and outstanding, will STAY out floating around the world and will not be reverse Journal Entried when a Treasury obligation matures.  

Do you see the problem?  1) how will they fund tomorrow's .gov spending.   2) a giant mountain of fiat (paper and electronic) is now floating around the world with no place to call home.

lasvegaspersona's picture

The shit hits the fan when those dollars are demanded to spend into the real physical economy.

When we boomers finally get serious about the quality of our liquor and Depends those prices will rise. Same for other consumer goods and commodities. When pension plans start selling shares to pay out (they can't just print) the Fed will come to the rescue with new dollars that eventually destroy the dollar.

Déjà view's picture

When Grim Reaper arrives with shotgun and ends it..."All Over Again"...

SeuMadruga's picture

But somehow for some people only Treasure's liabilities count, never Fed's !

libertyanyday's picture

where is all the currency that was created to buy up the debt?? Even the FED has to buy the treasuries from primary dealers...........they have to print the dollars and that will create massive INFLATION . 

BigJim's picture

Treasuries are already traded as money. Creating fresh money to stop them disapparating upon redemption doesn't create inflation, it prevents deflation.

The inflation occurred when the treasuries were swapped for bank reserves and the government spent that money into the economy.

ie, the inflation has already happened.

carlnpa's picture

Today is GOLD Star Mothers Day.  Overpaid players spitting on the Gold Star Mothers

Gold Star Mother’s Day is observed in the United States on the last Sunday of September each year. It is a day for people to recognize and honor those who have lost a son or daughter while serving the United States Armed Forces.

This will be epic later today - disrespecting Gold Star Mothers.

https://images.search.yahoo.com/search/images;_ylt=A0LEV1_vvcdZjsMAg1VXN...

The last Sunday in September is also Parents of Fallen Military Sons and Daughters Day in New Jersey. This day is a tribute to all parents whose children died as a result of their service with the United States Armed Forces. It commemorates the contributions, commitments and sacrifices made by those parents individually and through the American Gold Star Mothers, 

philipat's picture

"The problem with the Fed was largely doctrinal......."

Indeed

Rapunzal's picture

If anybody still believes the FED made policy errors, I can call that retarded. The crisis of 1929 was bank induced like all other crisis before.

The crime of 1873 just as a reminder. Those events are years ahead in the making, they are no coincident or the system ran out of control and

the poor bankers really didn't know it could happen. Fast forward 2001 and 2008 have been also planned ahead and have been no coincident.

The bankers always enrich themselves in neck break speed in those times and its merely a wealth transfer from the working people to the banker.

it's more, it's getting real assets for useless paper, the transfer of hard assets that the bankers take for sents on the dollar. If people don't get that,

it's understandable the bankers rule with impunity.

Also its very easy to see whats happening in the future, the FED will be eventually thrown under the bus, it's all planned. To make the stupid as fuck

sheeple happy. But the new system will be up and running a world central bank. It will be rolled out as a blessing and people will buy into it,

because the old system took everyone to a misarable ride. But people will not get it, its just the old people with new name tags running the show.

libertyanyday's picture

The fed has done nothing but make policy errors.  No one can steer a car at night with no headlights  down a curvy country road by looking in the rear view mirror...................you cant make tomorrows policy based on yesterdays data and that is EXACTLY what the FED does........They have never loosened or tightened money supply to avoid a recession, never

The FED will ride this into the ground with most of america onboard.....

How do you survive this????

JeffB's picture

Why You've Never Heard of the Great Depression of 1920 | Thomas E. Woods, Jr.

https://www.youtube.com/watch?v=czcUmnsprQI&feature=related

screw face's picture

Oh this is good shit hedgers.

Son of Captain Nemo's picture

WE'RE SO "FUCKED"... And have been since 2008!

Which is why your President, Ambassador to the UN and Congress need a back room loan in the trillions (put new currency/precious metal(s) loan here to replace the decapitated $$$) x__________ from the Chinese and Russians cause they don't CONTROL IT ANYMORE!...

The shenanigans with North Korea, Syria and EVERWHERE else we are up the butts of is to tell those two superpowers we'll be taking that RANSOM/"LOAN" INTEREST FREE!!!

Deep In Vocal Euphoria's picture

you people from the 40s 50s 60s.....you will not be missed as you die a slow death.

 

this is your doing, make no mistake......sucking the government tit and your children has to pay.....enslaved for life.

 

goes to show how much you care for the children.....little fucking hypcrites.

 

the sooner you old fucks stop breathing, the better........slow death, animal.

38BWD22's picture

Not to mention resentment.

Pernicious Gold Phallusy's picture

Its baby boomer parents were permissive, and didn't insist it do well in school.

any_mouse's picture

This was put in place in 1913. Almost of all, if not all, people of majority age at that time are long dead.

Blame the descendants of the moneychangers and the owners, the ones you are not allowed to criticize.

Condemn those descendants to a slow death.

Now you are a NAZI.

How different were you when you condemned ordinary people of certain age groups to a slow death?

stacking12321's picture

Mostly correct, but wrong about money changers.
Money changers are not a problem, they provide a valid useful service.

Money counterfeiters (FED) are the problem, siphoning the wealth of society to the financial elites

Anon2017's picture

If the Family Values folks cared as much about people in the here and now as they do about the unborn, we might not be in such a precarious financial state.

lasvegaspersona's picture

I did not down vote you but will be laughing from Hell when your turn comes (cuz I'm evil that way).

Xena fobe's picture

Too recent. Had to have been born in the 1920s and 30s to be in power in the 1960s and 1970s when they began outsourcing jobs, crushing unions, importing labor and went off the gold standard.  That generation was also responsible for Vietnam and the cold war. 

Early baby boomers bemefitted from the post war industrial boom.  Retired early and collect fat pensions.  Late baby boomers struggled their whole careers with job security and will never retire.  But the boomers were not old enough to be in power until the early nineties.

As for you, as a dual citizen, you can evade taxes and skip out to your homeland so you have no cause for concern.

 

libertyanyday's picture

Only to be replaced by new stupid fucking idiots........go back to work now, i need my SS check.

The Wizard's picture

This should say, 40's, 50's, 60's, 70's, 80's and 90's. The dumbing down of America has grown exponentially if one considers the educational system. It continues to this day since most people are clueless to what is going on behind The Wizard's curtain.

Fundies's picture

It's not a can we're kicking, more like a full 44 gallon drum.

stecha's picture

johnny Walker red label til your there, then black label the rest of the way..

koan's picture

Hoover was correct, debt gives us purpose.

Sam Spayed's picture

BO once said "the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents – number 43 added $4 trillion by his lonesome."  BO then went on to added $10 trillion to the national debt. 

oDumbo's picture

This is reason 79 out of 1000 why I hate that piece of shit traitor oFuckface...o sooooo much.

HRClinton's picture

1913 Sermon of the Debt Mountain: "Cursed are the Goyim, for they shall be enslaved to our Babylonian Money Magic. Blessed be our Talmudic Ashkenazi Rabbis, for teaching us the secrets of how to be Masters of the Debt Universe."  (Sarc.)

"The value of a Conflict, the TRUE value of a Conflict, is in the Debt that it produces... Control the Debt, control Everything." - The International

"Allow me to control the issue of a country's money, and i care naught who makes its laws." -Amschel Mayer Rothschild

Rebelrebel7's picture

 

Shortly after Bill Clinton was elected, I was researching the financial industry using old world almanacs and my original copies have been stolen and replaced with frauds. They look brand new. It was about 25 years ago, and they should at least be off white.  Suddenly, after the 1919 crash, US Steel stock went from being listed at 508,302,500 shares with a high for the year of $88 3/8 and a low of $38 in 1915, several years were missing from the library, to a dollar amount of $508,302,500 in 1919,  and for preferred from 360,281,100 shares in 1915 with a high for the year of $117, and a low for the year of $102,   to a dollar amount of $360,281,100 In 1919. Luckily, I recorded it, but that is the only evidence remaining since it was stolen and replaced with fraudulent information. I photocopied 1900 -1930, with a few years missing, went back to photocopy more, and was told that they were destroyed in a flood, which is unbelievable, since they were on the 3rd floor.

In 1929, the high for US Steel was $261 3/4 , the low was $138, and for preferred, the high was $151 3/4, and the low was $141.

And that is the missing link.

 

Ironically,  there is a JP Morgan at 111 East Wisconsin avenue in Milwaukee.  My father had a store in that building, and I had worked in one at 330 East Kilbourn Milwaukee and Merrill Lynch, Paine Weber, and the FBI had offices in it, and my Dad also had a store in the Federal building on Wisconsin avenue which had IRS and Social Security offices, and other government offices, but, it's probably nothing.

 

libertyanyday's picture

Ive always subscribed to KISS,  fiat backed by nothing is insanity, NO american would trade their house for a simple 5 oz piece of granite, but they will trade their house for 5 oz of colored pieces of paper..........with the sole belief that they will be able to trade that paper for others hards assets............this is the crazy and dangerous game of musical chairs we play..........and their are fewer and fewer chairs as the song comes to the end............albeit, and end that is very stubborn in coming...........hard assets for me.

Rebelrebel7's picture

Exactly. That's why the bankers hate Trump. He has real assets. He would put them out of business in a heartbeat, if anyone actually had any money in this God forsaken economy.

Stock certificates? Those were the good old days. They don't  even give them out anymore. The firms just rely on electronic storage. Lots of luck trying  to reclaim that when anyone becomes senile! It will be the word of a banker against a senile old man or woman in a nursing home, assuming that the senile person even has any recollection of the stock.

Prior to the '29 crash, they sold stamps to buy stock with, because it was actually extremely pricy compared to today. Poor people desperately wanted to own stock and every week or month, they would buy a stamp, hoping that one day they would own a share of stock. 

For example, in 1929, Eastman Kodak had a high of $129 and General Motors had a high of $110. Borden $182. 

At the time, GDP was $100 billion.

 

1.21 jigawatts's picture

Cryptos are the modern-day continuation of Jesus flipping the tables on

Yahweh's Chosen Money Changers(TM).

honest injun's picture

Bernanke quote from Friedman's 90th birthday -

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.

So, there it is, we don't have to worry because the Federal reserved has learned it's lesson.
Rebelrebel7's picture

Call Hillary. That is her job. JP Morgan is quite accomplished at  it also. Nothing like drafting all of the share holders and murdering them in a grand heist of world war! No wonder J.D. was so distraught over her loss!

Jasher's picture

Blessed are they that dwell in thy house: they will be still praising thee. Selah.

32 Now therefore hearken unto me, O ye children: for blessed are they that keep my ways.

Blessed are the poor in spirit: for theirs is the kingdom of heaven.

Blessed are they that mourn: for they shall be comforted.

Blessed are the meek: for they shall inherit the earth.

Blessed are they which do hunger and thirst after righteousness: for they shall be filled.

Blessed are the merciful: for they shall obtain mercy.

Blessed are the pure in heart: for they shall see God.

Blessed are the peacemakers: for they shall be called the children of God.

10 Blessed are they which are persecuted for righteousness' sake: for theirs is the kingdom of heaven.

11 Blessed are ye, when men shall revile you, and persecute you, and shall say all manner of evil against you falsely, for my sake.

12 Rejoice, and be exceeding glad: for great is your reward in heaven: for so persecuted they the prophets which were before you.

 

DaveA's picture

Money and debt are just a smokescreen that let us pretend for a little while that things are not as they really are. What's really happening is that the hardy, self-reliant, quasi-libertarian stock that created America has since 1845 been gradually displaced by immigrants who cannot but transform America into the dysfunctional countries they left. The founding stock is also devolving as it is no longer subject to the scourge of natural selection.

Here's the real deal: Mass immigration and dysgenic fertility make each generation of Americans lazier, stupider, and more fecund than the last. The makers are still producing enough to satisfy the takers' needs, but they're being paid for it in promises that the takers can never make good on. This can continue as long as the makers don't pull up stakes and leave, but genetic entropy ensures that the taker/maker ratio will increase until something drastic happens.