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Down To The Wire: Wednesday's Congressional Vote On Boehner Plan Delayed Until Thursday To "Find More Savings"
When describing the Boehner's plan as perceived by the CBO we used one key word: "laughable" in that i) it cut far less than many had expected it would cut, particularly during its "first stage" and ii) it had a pathetic $4 billion of actual discretionary cuts in its first projected year. It seems even the GOP has realized that its plan is nothing but a red herring, and as a result has declared that it is delaying its previously scheduled vote on the debt ceiling which was supposed to take place tomorrow, has now been delayed until Thursday after republicans "scrambled Tuesday night to rewrite the measure to ensure that accompanying spending cuts were large enough." Which means that with far too much action expected int he aftermath, most of which includes the expected voting down in the Senate following just after the House vote, and another vote on a plan proposed by Reid, as well as possibly a vote on Obama's still non-existent grand compromise, this is no longer an 11th hour affair. The budget farce just became a 12th hour and 1 minute affair. Alas, the money runs out at midnight. What happens next nobody knows, but perhaps Ben Bernanke can tell us: after all it is him everyone looks up to in order to justify never selling on any news, good, bard or otherwise. And he better have a damn good explanation.
From Washington Post:
House members have just seven deals to raise the debt ceiling before next Tuesday’s deadline, and the latest move came after budget analysts said the plan endorsed by Speaker John A. Boehner (R-Ohio) would only create $850 billion in government savings, rather than the sought-after $1.2 trillion.
Boehner had spent much of Tuesday furiously rallying support for his two-step plan to avert a potential default, even though Senate Majority Leader Harry M. Reid declared the proposal “dead on arrival” in his chamber and the White House issued a veto threat.
Senior lawmakers and aides continued negotiations aimed at finding a compromise between competing plans from Boehner and Reid (D-Nev.). But the two sides were still split over whether to hold multiple votes over the next eight months to lift the government’s debt limit or to have just one vote in the next few days that would extend the Treasury’s borrowing authority into 2013. Boehner’s plan calls for linking increases in the debt ceiling in two stages to about $3 trillion in spending cuts.
he White House expressed strong opposition to Boehner’s proposal Tuesday afternoon and threatened a veto, and Boehner also faced misgivings in his own party. About 10 House Republicans publicly declared opposition to his plan as too timid in its restraints on spending, and about nine more suggested they were leaning against the plan. Few, if any, Democrats were expected to support his plan, so the speaker could afford to lose only about two dozen of his 240 House Republicans.
This latest push merely guarantees that a "compromise" plan out of necessity will have to be adopted as there will be "no other options" or at least that is how it will be spun by the GOP. The result will be, just as expected, a plan that has been completely and utterly gutted and who only point is to flick the switch allowing not only another $2.5 trillion in debt to be issued, but the long overdue QE3 to be launched.
Because Bernanke has to monetize something.
In the meantime keep an eye on the dollar and gold. Both are likely, as soon as the market realizes what just happened, to move very fast in opposite directions.
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This is nonsense.
Just like debt as money.
You have to ask yourself, "who hates this country more, The Fed or Congress?" Personally, I think it's a toss up but it is clear that both organizations don't give half a fuck about the United States and its people.
I think Boner is a cunning linguist . . .
Oops - double click = double post. Bad finger - sit, stay!
Or a linguistic cunt!
or a cunnilingust . . .
http://www.youtube.com/watch?v=4PQrz8F0dBI
Billion Chinese and Indians are willing to work as slaves for the benefit of top 0.1% corporate executives and shareholders. American and European middle class has no chance unless a revolution happens.
The Revolution known as stop buying foreign made garbage when there is an alternative made in the U.S that you can afford.
LOL, it's easier to just prattle on about American exceptionalism than to actually believe in it enough to take action. WTF do these "where are the jobs Mr President" types think American jobs will come from if they import every product and service from overseas?
Radio show out of Pittsburgh, no lie, was praising some "entrepeneur" who keeps bringing Indian H1Bs in for his growing IT service company. Carnegie Mellon, one of the top computer science schools in the world, is in Pittsburgh. After 20 minutes of fawning over the Indian-importing asshole who won't hire Americans, this brain surgeon blames Obama for unemployment. The really scary part? This fool and his listeners vote.
I am convinced that all the theatrics over the debt ceiling is nothing more than falderal. The Party is simply directing its republican and democrat factions against each other in an embarassing display of histrionics.
Any serious plan would call for substantial cuts (at least 25 percent, preferably 50 percent) in military spending. Any plan lacking this is just more strutting and preening for the audience.
Yep. This glaring omission shows that this whole debt ceiling debate is nothing but theater for the masses, especially those who still think the repugs are right and the dems are left. Both parties are corporate shills. End of story.
But then, the corporate military fascists have done their level best to ensure we do nothing but worship the military in this country. So cutting any waste in the DOD is considered unpatriotic. That's one more reason why nothing is fixable in the current system in which the first and foremost task for all elected federal officials is ensuring the wealth and power of those who bought them.
Task two is sending more wealth and power their way regardless of the implications to ensure the flow of campaign funds for re-election.
Task three is acting as if they are still there fighting for the peasantry against oppression and evil.
Israelies still get their $3 Billion++/year even if they have to take from Grandma and the orphans.
Kudos for the Monkey Wrench reference George.
It's happening for a reason. What's the other hand doing? Soon, the answer will appear, as if out of thin air and we'll that much further down the rabbit hole.
[It's happening for a reason. What's the other hand doing?]---spear-x
Astute presumption.
I also presume post-debt ceiling deals are being worked into the bargain.
Examples:
"falderal" pfft. stop teaching me new words. it pushes all the old stuff out of my head
Congres suck
I left off a couple S's for SAVINGS
a wize man one said " deficits are irrelevant "
So did an aptronymic guy named Dick.
Aptronymic is so my word of the day.
Love, Weiner and Boehner
that's not even in the dictionary
Can't "find" what you're really not looking for boys and girls.
BTW Gold is hovering just below new highs.
Also Cog, (as you know)..All around the planet, the CBs been busy 'stackin' for some time now...
Don't trade when your high ! Monedas 2011
New advertising campaign for the Republicons: "New Federal Govt Lite,
only half the size of the Old Federal Govt -- Less Taxing -- More Responsible!".
Oops, I forgot temporarily that the Republicons are the party of "Tax Less, Spend More."
Darn it, the Decepticrats aren't any better though!
Their ad slogan appears to be: "New Super-Sized Federal Govt, All the Bureaucracy of
the Old Govt, with less Fiscal Sanity!"
Stop spending $billions on a war machine that kills women and children for oil to support a "lazy, overweight, cheeseburger in one hand, tv remote in the other" lifestyle.
If God blesses America, then that's not a god i want to know.
I think it's meant as a "prayer"... or request. My own version is: "God....have mercy on this pathetic nation"
There is only one god in capitalism.....capital.
You'll pry the french fries from my cold dead hands.
Damned arrogant Eurotrash take all the fun out of life.
Try some baby back ribs and maybe your asshole will loosen up a bit.
How far do you want them to shove the ribs up there to loosen it up? You may need some photos in your instructions.
Would "Until I see them punch out the top of his pointy head." be too much?
but the wars also dont support anything even the cheeseburger....they make defense industies richer, but go to other counties...they have cheeseburgers and tv too but no wars....
Funky Monkey ? Do you shit in a hole while doing chin ups ? Monedas 2011 Love that Continental flair !
Hey Monedas - Nobody likes you ... except you. Check it out. I'm not lying.
Its the ultimate filabuster. If its not broke, don't fix it, but when you are broke, stop spending.
How is it that people are too dumb to fend for themselves, yet so intelligent that
they can vote for the right person to fend for everyone else?
Wishing the government to be a great protector and benefactor does not make it so.
It is not difficult to find evidence that it is anything but.
All you're really asking for is to exchange the potential corruption of a private
merchant for the assured corruption of a government bureaucrat. If a merchant cheats
you, you won't go back. If a merchant cheats enough people, he'll go out of business.
If a government bureaucrat cheats you, then he receives no punishment. In fact, he'll probably receive more funding and more authority to do a job he was too incompetent to do and had no incentive to do effectively in the first place.
+ 1621.
We somehow make Europe's mess look sensible. FTW
indeed. and ftw. look at the fx pairs n gold.
Something tells me that our German friends here are seeing a de jevu ala Weimar here in America
Can it happen here? Yes.
Currency is a matter of belief, of trust; Americans are losing belief in their currency as a store of value. But unlike the Germans who did not understand who the foe was in Weimar Germany that had defeated them in the Great Inflation of the 1920s, an enlightened American populace does know – it is the same foe that defeated the Germans – the central bankers and greed…
It was not so very long ago, the 1950s, that the U.S. was producing half of the world’s oil, half of its automobiles, and 40 percent of its industrial output. By 1958, the dollar was better than gold.
The parallels between Germany from 1914 to 1923 and present day America are striking…
Before WWI, Germany was a prosperous country – she had a gold-backed currency that exchanged four or five to the dollar, expanding industry, and world leadership in optics, chemicals, and machines.
That was in 1914.
But by 1923, according to George J.W. Goodman, “at the most fevered moment of the German hyperinflation, the exchange rate between the dollar and the mark was one trillion marks to one dollar, and a wheelbarrow full of money would not even buy a newspaper.”
Says Goodman: “Most Germans were taken by surprise by the financial tornado.”
Walter Levy, an internationally known German-born oil consultant in New York, said of the time: “My father was a lawyer, and he had taken out an insurance policy in 1903, and every month he had made the payment faithfully. It was a twenty-year policy, and when it came due, he cashed it in and bought a single loaf of bread.”
Just as Bernanke’s central bank presses are running, running, running, the German printing presses ran, and ran and ran… till “dentists and doctors stopped charging in currency and demanded butter and eggs, but the farmers were holding back their produce. ‘We don’t want any Jew-confetti from Berlin,’ a chronicler quotes a Bavarian farmer. The flight from currency that had begun with the buying of diamonds, gold, country houses, and antiques now extended to minor and almost useless items—bric-a-brac, soap, hairpins…
“By November 1923, with one dollar equal to one trillion marks, the breakdown was complete. The currency had lost meaning…"
It was then that a new president took over the Reischbank - Horace Greeley Hjalmar Schacht and introduced the “miracle of the Rentenmark” -- one Rentenmark equal to one billion old marks.
Says Goodman: “But although the country functioned again, the savings were never restored, nor were the values of hard work and decency that had accompanied the savings…
“Widows dependent on insurance found themselves destitute. People who had worked a lifetime found that their pensions would not buy one cup of coffee…”
Said Pearl Buck: “The victims were millions of people. They had lost their fortunes, their savings; they were dazed and inflation-shocked and did not understand how it had happened to them…”
J.R. you can write a novel... You called that, this, usd/jpy trade... Nice work Yen.
Real leadership is just around the next corner. Keep looking for it.
frontal lobotomies for all
The Kenyan is probably hamming it up right now with his La Raza friends.
President of ALL the people.
What a crock.
It's like having an effeminate, less athletic, O.J. Simpson in the oval office.
It's funny because it's true.
Cheezy is correct... that was a good post. Don't get a big cerebelum! (SP(?))...
what I say is true.
"that its plan is nothing but a red herring"
Eat your peas bitchez!
Sorry. The pea bushes got it!
Ripped 'em out and going to replace them with beans. :-)
Another "give peas a chance":
http://iowntheworld.com/blog/?p=84923
No one who reads I Own The World can be all bad.
Excellent!
Their 'Bottle of Obama Pills Contest Results' were hilarious.
http://iowntheworld.com/blog/?p=86777
"All we are saaaaaaaying, is give peas a chance...."
Visualize Whirled Peas.
I'm sure Bernanke has cabin fever at this point. By the time Obama gets him back in the saddle for QE3 he'll be monetizing IOU's for 8 balls.
Alas, Repubs just can't get out of their own way. Put a bag of shit in front of a Republican, and sooner or later [usually sooner] he/she will step in it. It's like they can't help themselves.
Putting the country in the hands of the excrement pile Bernank is truly a scary proposition. QE to the nth power is the only thing the guy knows.
We're in the very best of hands.
For all the bitching they do and scapegoating on repubs. Democrats still hold the majority of all of this. They have the WH and the senate. it's mostly their fuck ups 2 1/2 years of runaway spending and fed giveaways.
repubs this, dems that, barf.
You'd fight Gandhi, but not me.
Yeah, you'd think after their $870B "porkulus" bill passed two years ago without a single republican vote they'd be willing to cut at least $870B out of the budget for the next two years, just to get us back to the 2008 budget baseline. Anyone ever figure out what the positive effects of $870B on the economy were? Seems like they claimed unemployment would be down below 8% and GDP above 3.5% by now?
Guess you can't solve a debt problem by taking on more debt!
Boehner is no Republican and he is no conservative. He is a:
Cunning
Useless
Narcissistic
Tool
does anyone with a brain really care what the congress clowns do? does it really matter either way? tune out, its a joke.
its a freaking non-stop marathon circus stalled on the dog and pony show....and the kids love it!
Unfortunately, it's not a dog and pony show, it's a Tijuana donkey show, and we're not the donkey.
Any compromise plan will have to go around the tea party and include some combination of rinos and democrats in the house. Any repub who votes in favor gets a primary.
Until Cornyn leaves leadership, all R fundraising material goes straight into the trash.
Bastard lawyer decided to dick with primaries, he must go.
+1. And if the Repub nominee has a name like Mitt or Newt, I will redirect any and all contributions into ammo and stay home on election day.
Same here.
Romney is a pale skinned Obama. Huntsman is worse. He's Obama's butt elf on vacation.
Newt shared a couch with Pelosi when he thought the Dems had a lock on a thousand year reich.
We need someone who with a killer instinct.
The Bush's burned me out on deal makers.
"The Bush's..."
Buahaha....sucker chump! X2
This is not being read correctly.
Boehner's plan coming up short of target is what actually SHOULD happen when you put something on paper and submit it for independent review. If there was no doubt about anything, you'd never have an independent review.
Contrast this with how CBO can possibly score plans that are not on paper.
Boehner will now have to cut more, and maybe more in FY2012. This is a good thing.
Bhoaner's plan was put down on tissue paper. That's why CBO wanted to toss it out.
They are going to scare the bejeezus out of their very bestest friend Mr. Market pretty soon.
Clinton ruled by looking at the polls constantly. Obama rules by looking solely at the Dow Jones Industrial average. Those are a very important 30 stocks. Who knows how Bush ruled? I think he gained insight from The Tales of Benny the Goat. It is sad what reprsents us. But then again there is the old saying that, "great poets need great audiences". I just have to commute to and from work everyday and I see exactly why we have the idiots that we have. Moronic politicians require moronic electorates. Turning that mirror on society isn't pleasant but it is true.
Tyler, I think the CBO scored it as a whopping 1 billion in "savings' the first year! It's a frikking JOKE. If you look at the details of the plan, the Boehner plan gives us a 23 trillion debt in 10 years vs. a 25 trillion debt using Obummer's last budget. Either way we are fuked waaaay before 10 years comes. All Boehner is doing is more smoke and mirrors using baseline budgeting and claiming adding 9 trillion in more debt is a trillion dollar "cut" from adding 10 trillion.
You suck Boehner. I expect this shit from Obummer and the Dems. All of you establishment Repubs and RHINO's WILL be voted out. WE who pay the taxes are fed up and refuse to pay any more.
Mark my words, this is s defining moment in US history. Lines are being drawn in the sand. We are not going to be leaving the Repub party, you have left us.
All RINOs should burn in hell like they deserve.
And there just has to be a special hell for Snowe, McCain and Collins.
Lieberman will be the orientation coordinator.
I have always despised McCain. It is amazing that he still considers himself a "patriot". Rot in hell.
It runs in the family. A traitorous bunch.
http://criminalstate.com/tag/uss-liberty/
if God is alive then BOTH PARTIES and their blind ass clown parades will fry.
THAT is what God blessing America would imply.
No patriot can still belong or contribute to either, not anymore.
ANy who do support the FSA even while they piss and moan are like as not skimming off the extended gvt tit or out and out squid suckers.
Yup.. dollar up and gold down I think.. short term at least. Until QE is unleashed again.
One thing that is sure to go down... standards of living.
Effin Pigeon { TURDS} Back ass-wards congress is!!! Who is in the PROVERBIAL [Barrel] today...? Squeek. Squeek. ( Mispel: INTENDED!!!
Cut your salary, bitches. Depend on Medicaid and Social Security when you retire, like the rest of us, bitches. Look inside your own back yard, under your own nose, or we will fire you or worse, bitches.
The first step is for Congress & Senate to set an example by meaningful self-sacrifice or, failing that, just get out of the way.
Time for $1 a year men & women.
Self sacrifice to them is that brief moment of uncertainty they have when they send other people's kids to fight wars for their corporate masters. It ain't much but at least it is not much. Sacrifice is for the peasants, not the nobility.
At $1 a year they would still be grossly overpaid.
I understand the sentiment, but it should be the opposite. Every housemember gets $1,000,000 per year. Raises occur automatically at the core inflation rate. Senators get $3,000,000. Their pensions are rated by time in office, like most other pensions. Even after they leave ofice, they are forbidden from making more money per year than the current members of thier rank.
But thats it. That is all the compensation they get. they are not allowed to own stocks or more than two homes. They have to pay for thier own election campaigns.
You'd have competent people comming out of the woodwork and citizen government again. That's how Murdoch intimated that Singapore's government is run ...
I'm a Republican you ass clowns! brainwashed and ignorant you are...
What an idiot. There are just enough gullible dumbasses like you in this nation slavishly submitting themselves to their parties such that this one-party, two-faced charade continues. Did it ever dawn on you that perhaps your party loyalty IS the problem?
BTW. Barack is no socialist. He's a corporatist puppet that uses our money to buy us off. Nothing less, nothing more.
You wouldn't know socialism if it came up, kicked you in the ass, and said "Hi, I'm socialism".
No self-respecting statist/socialist would ever give Wall Street 800 billion in taxpayer money.
Like that " New Float' AUD you ass clown? I'll tip toe with you all year long.
You are " Blasphemous" I never junked your remarks... Check my posts! You are a lost cause...
I've read the Aug 2 date isn't carved in concrete. Everything's paid for until 30 Sept. The first weekend in October is a Jewish high holy holiday, so you won't see many fireworks on that weekend.
It's time to break ranks. Some of you who are republicans that want to make a name for yourselves, just say enough. Demand a reduction in the debt ceiling and put forth a plan to start outright defending agencies and departments. Department of Energy? Don't need it. Department of Education? Gone. Pell grants? Toast. Defund all Fannie and Freddie loans. Department of Transportation? Take a hike. Literally.
To hell with this. These republicans aren't even as scary as the 1994 Contract With America bullshitters.
I would kind of like to not crash into another plane on my next flight. It's hard to walk 2000 miles. It's also hard to haul food from Iowa to NYC 1500 miles on highways that are never repaved.
What no supreme leader on tv tonight? I was hoping for a 3 hour Castro like speech.
I wonder what the markets would be like if we saw this headline:
"U.S Misses it's August Debt Payments"
I think Obama is trying to compete with Gordon Ramsay for most overexposed person on TV. At least Ramsay is fun to watch, some of the times.
Let's send Obama, Reid, Pelosi, Boehner and McConnell out on a crabbing boat. The boat can be called "The Douche" and the show can be called, "I HopeThey Fucking Sink".
President Bill Clintonlast week that the 14th Amendment that states the "validity" of government debt "shall not be questioned" means that Obama could simply ignore the congressionally imposed debt ceiling and go on borrowing.
http://www.reuters.com/article/2011/07/26/us-usa-debt-legal-idUSTRE76P79C20110726
The only thing worse than a sitting president is an ex-president that can't understand that nobody gives a fuck what they have to say. I'm looking at you, Carter.
Sorry, only Congress can borrow. Article 1, Section 8. The Courts would stop Obama, is my belief.
Article 1 - The Legislative Branch Section 8 - Powers of Congress<<Back | Table of Contents | Next>>
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow money on the credit of the United States;
Interpreting that law really doesn't matter.
If he chooses to try to jack the ceiling up, just a few weeks later is 1 October when spending authority ends. THAT law is not in doubt. Spending authority comes only from Congress, and it ends 1 Oct.
If he tried that, Congress would cut it all away instantly.
How many times do we have to inform you that raising the debt ceiling is not borrowing, clownboy?
You made my decade! Gummy Bears are over rated!!!
How many times do we have to inform you that raising the debt ceiling is not borrowing, clownboy?
The only purpose in raising the debt ceiling is to borrow.
And who would be doing that borrowing?
Congress!
never let a good crisis go to waste. all the more reason to officially announce more easing. of course theres been easing all along this folly jolly path!
http://www.google.com/search?q=bread+images&ie=utf-8&oe=utf-8&aq=t&rls=o...
and
http://www.youtube.com/watch?v=V8vINCq_IAI
More savings or more votes, since Boehner's right wingers have abandoned him?
The tea party cool aid lovers has said "NO" already, long before the CBO issued its analysis.
When they are compared to the government worshipng Kool aid drinkers who never saw a another persons dollar they don't like to spend , I'll take the tea party Kool aid drinkers.
God bless them.
What happened to the pledge to cut spending by the amount of debt ceiling increase
What about credit rating agencies expectation? Didn't they assure us of downgrade if there is less than 3-4 TRILLION of cuts over 10 years?
Looks like they are just kicking the can again. What a bunch of spineless cowards! The establishment Republicans like Boehner (and Cantor) can always be counted on to cave whenever the heat is on. It seems to be the only thing they can really be counted for. What a disappointment! No wonder so many Tea Party candidates got elected last time.
It's truely sickening to see that in the end Obama will probably get just about everything he wants so he can more thoroughly screw America, just because a bunch of spineless Republican leaders lack the intestinal fortitude to stand their ground on principles and put forth a realistic plan.
The only certainty you can take from this ridiculous charade is that the United States will get the deal that is worst for the long-term good of the country.
You might not have noticed but the republicans passed Ron Paul's cut, cap and balance bill by a large majority. Reid's spineless senate voted it down by 51-46. If they had passed it the whole issue, both debt ceiling and future deficits would now be resolved. They also passed a 2012 budget with over $500B in real cuts. Also, voted down in the senate. Obama theatened to veto each even if it passed the senate. Apparently, he just can't live with a government budget of only 18% of GDP. He's boosted it to an all time high of 25% of GDP! Well, now he gets the alternative, a cash flow only operation, no debt ceiling increase, and 1.4T$ in savings in just the next year alone.
It will just be a big bag of suck. Weeeee
"Tune in tomorrow for another exciting edition of "As the stomach turns" when we hear Ben say; "Hey! Those are my McNuggets!".
Tunga is shorting International McNuggets big time. You should too.
The [ BIG mac] agenda... Nice work Tunga. + another one...
American McCeptionalism, bitchez
Max gets an "up" for consistency
The Coburn plan cuts $9 Trillion and sadly, it is not enough............but it is the best plan out there
James Coburn is still alive? Good for him.
Tom Coburn... and I can't imagine his plan cuts much of anything. He's the chief idiot that cries about million dollar programs while completely ignoring the billion/trillion dollar programs.
maybe boehner used timmay to run his budget cuts through turbo tax first time around? honest mistake
Does anyone actually know what the actual date would be if/when the US would be default? I've seen July 22nd, Aug. 2, Aug 15, now Sept 30
Anyone...? Anyone...?
Obama said he would just twist some amendment to raise the debt limit if congress didn't from what I understand. But removing/not contributing to the pension funds, in my opinion, was when we defaulted.
Funny and sad - all this arguing about cutting off this pittance or that. Neither mean anything big picture. We, like all empires before will fall at the hands of corrupt leaders without vision or consequence.
The debt model is broken. There's no going back, and not enough cuts will ever reign it back in. It's everyone for themselves soon. Prepare.
It's REIN, as in the lines from the horse to the rider, not the reign of a ruler ... another stupid idiot with insufficient education? Probably.
And the time for preparation is long since past. Got silver coin???
Probably not.
Dup
Yep another crazy drunks plan that even his own crazy party won't except, I'm the far left we need better actors for this theater.
http://www.nakedcapitalism.com/2011/07/michael-hudson-mr-obama%e2%80%99s-scare-tactics-to-get-democrats-to-vote-for-his-republican-wall-street-plan.html
Back to dinner of rice and beans.
"The Peas of Ass !" Moochelle Obama's unauthorized biography....Monedas 2011 Now available Amazonbutt.cunt
More savings? How much of that comes from switching car insurance?
Since no one is willing to seriously cut spending, there is no solution. So, over the cliff we go.
Tea Party "Mission Accomplished"
Have you considered that any meaningfull cuts in government spending would send the US right back into a nasty recession that would blow the already insolvent banks sky high and require Trillions from the Fed. For Bonner to come out with a bullshit smoke and mirrors plan only shows how desperate these guys are to just kick the can a little further down the road. This is one of those rare times when the real story is close enough to the surface to be seen.
Has everyone forgot about our failing economy and our insolvent financial institutions that are sitting on hundreds of Trillions of derivative positions ( many of them naked) that will be blown sky high if they are exposed to much more pressure. We can't afford to cut anything coming out of Washington it is the oil that keeps the machine running. It would be best to just raise the debt ceiling by 5Trillion and keep on partying like nothing is wrong. We are just showing our hand at this point and we have 5 jokers.
Have you considered that any meaningfull cuts in government spending would send the US right back into a nasty recession that would blow the already insolvent banks sky high and require Trillions from the Fed.
First, we are already in a Recession if not a Depression.
Second, we cannot spend our way out. That's been tried and failed. Not just here, but in Japan for the last 20 years. It doesn't work.
Third, history shows us that cutting government spending is the proper course (see 1920 Recession as one example). The banks need to be allowed to fail...this will free up capital for re-investment. There will no more bailouts.
Fourth, yes it will get worse before it gets better. That's why you should buy physical Gold and Silver, acquire firearms for home defense, and have a supply of freeze dried foods - "just in case".
Don't get me wrong, Im in your camp and I am preparred. Yes we are in a slowly evolving inflationary depression. My point is that it is too far gone to save. The unholy union of the TBTF banks and the USGov has permanently bankrupted the country. There is no way out. We can't cut our way out just as we can't print our way out either. However, the printing route will be if you will "Easier" on the powers that be and that is route they will go.
The Tea party has it right, they are just 20 years to late. Were fucked.
My model for this has evolved. For three years I have been studying the great debate between the deflationistas (Maulden, Denninger, Shedlock, Dent, ect..) and the inflationistas (Martenson, Papluva, Rogers, Faber, and so on).
So which camp is right? Well, my working hypothesis is now that both are right. That is of course predicated on a failure of market levitation to continue unabated. That's a big "if" and depends on whether you believe that markets can be manipulated long-term as opposed to short/intermediate. If you believe that this market can be propped indefinitely then my theory falls apart and we go straight to galloping/hyperinflation.
Deflation first, hyperinflation as the end game. A meltdown is inherently deflationary and with 500T in derivatives in the OTC, and tens of trillions of sovereign debt, a deflationary develeraging event would make 2008 look like 1992 in comparison. Debt destruction is inherently deflationary.
Also, deflation is a monetary phenomenon. Hyperinflation is a political choice.
When the next meltdown occurs, I believe deflation will rule the day in the short-term. Lacking revenues and facing credit market lockup (again!) and production halts, governments will make the political decision to "hyperstimulate" their economies back to life.
Of course this will not work, and we'll be giving heroin to the junkie to merely keep the corpse's heart beating, nothing more. But the cumulative doses of monetary smack will eventually kill the patient, who will have already have been dead for all practical purposes.
Deflation flattens the economies. Hyperinflation then bombs the rubble.
The arguments of both camps have some very compelling points (you can't outprint the debt destruction in the short-term when it happens) but the pivot point of these camps seems to be predicated on an either/or premise.
I am working on the assumption of AND, not OR.
Hence I keep cash, both USD and CAD, and gold as my primary fallback and trade the markets opportunistically with a portion of my account to earn more clownbucks so that I can go to the bullion dealer and trade them for some money.
Of course, I am open to any critique on this theory but wanted to toss my thoughts out here for others to chew on.
There's that QE^n thingy that could toss a wrench into it though. Right now from a political perspective, I think both TOTUS and ChairSatan realize that for the Muppet-in-Chief to get elected the cost of bread and porrige for the serfs has to come down in the short-term. I think that they'll use the rumor of QE III to goose the markets to the best of their ability, but I also think that they attempt a controlled decent of equities to prop up the bond market and stomp commodities.
Until after the election. Then all hell breaks loose, LOL.
Interesting. I completely agree but you are the first person I've seen express it. I made a good deal of money in a reverse index and am back in it. I wish when I had rolled out I had bought more precious metals but I am new at this and feeling my way forward.
Z
You are so vague... That was a good post though! Hyperinflation? I suspect the fly will hit the proverbial wall long before that happens. 500T in derivitaves is akin to water on ' Mars'... once again , you make a semi rational point +1
Regarding hyperinflation I am in absolute agreement with you. "The fly will hit the proverbial wall long before that happens". I've read and watched Mish Shedlock speak to this effect and he makes some good points regarding the observation that another potential deleveraging effect could be so profound that CBs will not be able to print and inject fast enough to fight off deflation.
But true to the nature of central planners (Bernanke, Trichet, ect..) and the gaggle of pseudoaristocratic carnival barkers in Brussels and Washington they will at least TRY to put what they think are defibrillator paddles to the dead golden goose by stimulating first with 10 trillion, then 20T, 50T, wash, rinse, repeat until Paul Krugman is satisfied, which we all know results in an infinite loop.
I continue to rethink this on a daily basis because as you know, if you pick wrong, and align your assets accordingly, then you're gonna get killed. What happens if you're a hyperinflationista, and your heavy on commodity futures but a meltdown blows M3 apart? Or conversely, your absolutely convinced of deflation, are holding dollars for that "blood in the streets" moment, and next month the damn bursts and a loaf of bread goes for $9.
I don't think the debate on this is as robust as it needs to be. I think most of us here are smart enough to want to be proven wrong IN ADVANCE of the event than to find out during "it", because we're not going to get a mulligan.
They only sink the country if they are stupid cuts, which I admit is a forgone conclusion with these clowns. For example, cutting social security benefits just shifts costs. Old people move in with their kids and accelerate demand destruction. Ending the wars cuts consumptive spending and the worst side effect is some soldiers going on unemployment for awhile, which costs millions that we can easily afford once we're not spending billions overseas anymore.
Time to Bail and Disengage from the US Government...
http://goodthoughtsgoodwordsgooddeeds.blogspot.com/2011/07/bail-disengag...
OT: Hilarious 2 MIn Vid..
http://www.youtube.com/watch?v=W0Uju3tYS2s
Aww...everyone is finally figuring it out. Deficits be damned, debt be damned, ratings be damned, country be damned.
The only thing Pugs ever want to cut is taxes.
Anyone talking " CDO's" I'm listening?
Fuck kitty litter (only good for burying shit). Buy your own bonds and stop being so tranchy.
Who pissed in your Kitty Litter? I'm on your side... 2's were over bid today...
Snowball. Pig. Animal Farm.
Came to bad end.
Oh noes...a purple ring....everyone into the short-end of the pool!
Do not take my sailor mouth for animosity, YC.
We still love ya...CDOs not so much.