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Obama Says Debt Deal Reached, America To Avoid Default, Or "Hank Gave Us A 3 Page Term Sheet; Boehner Gives Us A 7 Slide Powerpoint"
In a much anticipated statement, Obama just announced that he has struck a deal with Boehner on the debt and the deficit, which will allow the US to avoid default. And also, as Reuters adds, Obama said that spending cuts included in deal to raise the debt ceiling will not happen so quickly that they will drag on the fragile U.S. economy. In other words, there will be no cuts for the immediate future. But there will be a single $2.4 trillion debt ceiling raise (based on a Joint Committee green light, LOL) just as Obama desired. And of course, there will be no tax hikes. Bottom line: there will be about $40 billion in actual, real spending cuts until the next, $16.7 trillion debt ceiling limit is hit some time in Q1 2013, at which point it will have to be raised to $20+ trillion. But no really, they are cutting spending and all that.
Just as Zero Hedge predicted all along.
Now comes the brief relief rally.
Then comes the hangover.
More from the AP:
Ending a perilous stalemate, President Barack Obama announced agreement Sunday night with Republican congressional leaders on a compromise to avoid the nation's first-ever financial default. The deal would cut more than $2 trillion from federal spending over a decade.
Default "would have had a devastating effect on our economy," Obama said at the White House, relaying the news to the American people and financial markets around the world. He thanked the leaders of both parties.
House Speaker John Boehner telephoned Obama at mid-evening to say the agreement had been struck, officials said.
No votes were expected in either house of Congress until Monday at the earliest, to give rank-and-file lawmakers time to review the package.
But leaders in both parties were already beginning the work of rounding up votes.
In a conference call with his rank and file, Boehner said the agreement "isn't the greatest deal in the world, but it shows how much we've changed the terms of the debate in this town."
Obama underscored that point. He said that, if enacted, the agreement would mean "the lowest level of domestic spending since Dwight Eisenhower was president" more than a half century ago.
Senate Democratic leader Harry Reid provided the first word of the agreement.
"Sometimes it seems our two sides disagree on almost everything," he said. "But in the end, reasonable people were able to agree on this: The United States could not take the chance of defaulting on our debt, risking a United States financial collapse and a world-wide depression."
As highlighted in a presentation just released by Boehner, here are the key point of the completed framework:
Emerging framework has three main features:
(1) cuts government spending more than it increases the debt limit;
(2) implements spending caps to restrain future spending;
(3) advances the cause of a Balanced Budget Amendment
Framework accomplishes this without tax hikes, which would destroy jobs, while preventing a job-killing national default.
For those who are interested, Boehner's whopping 7 slides on the proposed deal can be found here.
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relief rally then reality kick after oil spikes, yields spike and the USD plummets. Ah China's gift! A fudged PMI. Great stuff, another wave of inflation about to slam into Asia, Middle east and everywhere else.
All eyes on rating agencies now.
This rally has less strength than the we got Osama one. At least for that they could get some college students to show up for free beer
Those were interns working at the DOD and CIA.
Now for QE Light to turn into QE 3. Presto!
there was a (ir)rational behind the huge boost in the debt ceiling, which is probably why the markets seem so happy
Wish I could give you three greens for that Mr Lennon.
Platinum just went apeshit.
Well, up 1% when I just checked. That's OK, I love my platinum!
another pile
of unicorn crap....
They must be planning one hell of a QE3 to need that much.
It ain't over till the tea baggers sing. (an affectionate reference).
Thank what ever the hell you want for "extremist". Were it not for "extremist" This show would already be over.
America finished.
Is that what you really want? Fine enough if yes, I at least like the fight though. Something to remember and something to galvanize Libertarian nuts when it comes time to wake up and fill the void.
the Tea Party voted itself out of existence when it passed the Boener bill, the Obama bill will have solid bipartisan support
this is a profound moment that all but guarantees his re-election
Mitch McConnell is a piece of shit. His plan was to asure that Obama wasn't reelected, but just gave Obama everything he wanted.
Exactly.
The real winners here are Obama, Congress, and the banksters.
Everyone else is toast...
It was a tough negotiation. This video just came in from the "secret negotiations." Shhhh. don't let it get out:
http://www.youtube.com/watch?v=E6N0yJRAAAM&feature=player_detailpage
And you thought "it was just a golf game" back then.
And I mean nuts in the testicular sense.
The biggest loser out of this is Boehner. If the tea party is real, then he should be their No. 1 enemy going forward.
Boehner has to go.
Where are the defense cuts?
Where are the tax increases on the rich?
What a waste of a good piece of paper. Again special interests win, America loses.
More wars - No cuts in Defence
Lobbyists win, American Citizens lost.
Let the games begin
The truly rich have never had tax increases. Their money is in trust funds and offshore. The "rich" who are being demonized are making $300K while working 80 hours a week.
End the wars and a 20% across the board cut in all departments.
I'd take that deal in a second.
>> The "rich" who are being demonized are making $300K while working 80 hours a week.
Hedge fund managers, and others in similar situations, pay less than half the tax rate on his income that a typical working man pays on his. Why should a hedge fund manager making millions of dollars a year pay less than half the tax rate of most people? You keep puking up the same old garbage that has no basis if fact.
right at 9PM eastern
it must be true
but no bets will be final until the ink is on the papyrus
sorry
i need both knees
Thank Allah Obama struck this deal before it interrupted his celebration of Ramadan!
You sir are a f&*^ing asshole.
The US would gladly pay in the future for the debt increase today. Sound familiar?
http://www.youtube.com/watch?v=NJ6xBaZ92uA
In summary, business as usual. Fire up those printing presses and lets get this debasement rolling again.
Bonner just gave Obummer a second term.
that's because he just realized that the alternative would be Ron Paul.
Thankfully Dr. Paul will be able to retire in peace knowing that he stuck to his (and the Constitution"s) principles through out his political career. He will get my vote and a few others, but won't win the Republicrats primary. Let Obama, Reed and Pelosi go down in history as the captain and crew of the Titanic.
Hasten the Collapse, OBAMA 2012
>> Bonner just gave Obummer a second term.
Any why wouldn't he? Obama is one of the best Republican president's we've had since, oh, Bush. More war, tax cuts for the rich extended, bank bail outs, massive handouts to the health care and insurance industries, and social security attacked like never before. Obama is the best thing right wing nut jobs could have every asked for.
Why is platinum rising against gold and silver right now?
It's playing catchup. It's a damn fine store of wealth, if you ask me.
Ask me! Ask me! Yes. Yes.
Quite OK to have diveristy in your PM holdings, better even.
because the deal is "good for the economy" and platinum is an industrial metal...?
Platinum and Palladium are industrial metals.
WTF, is this math. Fire all of them. Crock of shitz. bend Over USA, you ain;t getting any vaseline.
Forgive me for being gauche. One should never let facts enter into a discussion of politics and money.
A really stupid person, Albert Einstein, predicted the course of events we observe today. Maybe he knew something? Or just a lucky guess?
Care to experience rational thinking and knowingness?
http://monthlyreview.org/2009/05/01/why-socialism
For part 2 of deal if committee fails to get $1.2T in deficit cuts, it wld trigger across-board cuts to make up difference.
I'm a little hazy on the details, but the 1985 Gramm-Rudman-Hollings Balanced Budget Act had such a plan, and was found unconstitutional.
http://en.wikipedia.org/wiki/Gramm%E2%80%93Rudman%E2%80%93Hollings_Balan...
There is much in this administration that is unconstitutional...
This congress cannot force the next congress to cut a single penny from any budget. The only thing that can is a balanced budget amendment
Fantastic. Seeing as how I'm in a bit of a bind right now with some entirely unforseen medical stuff earlier this year I would absolutely love another 9-12 months of can-kicking to try to get my family's financial house in better shape. Can't get entirely where I want to be, of course - but since I know DOOM! is coming I'll just focus on the essentials.
The Patriot in me had hoped, of course, for someone to actually be the adult in this tragi-farce and admit to Idol America that we're doomed and that we actually have to take our medicine (or "eat our peas", just not in the way the OPM-addict in chief meant) for a couple of years but only Dr. Coburn and a couple of House Tea "extremists" seemed to be up to that task. Most of the rest of you bankster-c*m addicted guardians of the status-quo performed your expected rolls to perfection.
So thanks for buying me another couple of quarters while we all go slowly bankrupt, pols. You've been great.
How are the Tea party "extremists" "up to the task"? maybe Ron paul would qualify. How many Tea partiers were pushing for significant cuts in defense? How many would agree to bring back Glass Stegal? The Tea party is full of hot air -they have ben preemeptd by the money people. We're screwed. America is a Nation of about 95% idiots.
The roughly dozen or so who voted against increasing the debt limit were to whom I was referring.
Is bringing-back G-S even on the table in any serious form at this point? I mean, it should be, but that seems to me to be a post-triage operation because the patient isn't even stable right now, bleeding out of several gaping torso wounds. But YMMV.
When was the last time you watched politicos reverse a decision? GS is dead, unless the banks lobby to bring it back...
We all knew what the results were going to be. Why is anyone surprised?
Maybe for a minute you thought some congressmen would do what was best for America? If you did, they played you for a fool.
It was always going to turn out this way.
Now I have more time to buy and stock the essentials. Unlike a lot of you I came late to the party and do need more time.
Yes the can got kicked, but the road will end
finally, the looted pensions will be placed back, and i eagerly await the chinese rating downgrade!
WTF.
Notice to Americans: you got until Q1 2013 to get the fuck out of the US and get your money and affairs in order someplace else. If not, your wealth will very likely be confiscated and your economic freedom will be over.
For the rest of Amerika, now you can go back to watching Amerikan Idol and wondering where Casey Anthony is hiding.
What a fucking joke my country has become; being led by a bunch of elite twits who aren't qualified to run a hot-dog stand.
I am working on the first part and have already gotten a head start on the second...my assets are already overseas. Americans are not prepared for currency controls...they will come...as they did in England and in Argentina among other countries. The average drooling american idiot won't know what hit them. Do as the military does...contingency planning now!
Most Americans don't have any assets to move overseas
And the band played on:
http://www.youtube.com/watch?v=-ALRLZQf42s
Apologies to the Temptations, but Love and Rockets is my cultural/temporal reference to this song and David J's bassline kicks ass.
+1
This plan allows them to spend more now and pay later through unspecified future cuts by unspecified future committee. Sounds like
a solid plan. They should dub this the Whimpy Plan: I will gladly pay you tuesday for a hamburger today.
They couldn't agree on anything, so they agree on agreeing on something in the future for a debt ceiling deal now. The shear
genius of it. No wonder these masterminds lead the greatest country on the face of the earth.
Oh, thank god! Praise Osama, er, Obama, and the Republican'ts! Now, back to buying my B of A stock.
For those wondering, you have just witnessed a classic example of Necrophilia, administered by real pros.
I don't know about that but they sure did fuck the corpse of the Merican economy.
Yes they did. Batten down the hatches.
Attack social security. Keep giving the rich tax breaks. Obama is basicallyy a Tea Bagger. Left wing my ass. This whole charade was to cover the attack on SS.
and to provide lotsa noise cover to disguise the GDP print/revision. had my doubts about this before tonight, but no more.
You're a dumbfuck who knows nothing about the tax code. You're attacking families that make $250K as rich while ignoring the trust funds. 0bozo attacked SS when he cut the payroll tax last year. He's a typical leftard just like Bush Jr
I'm glad I saved my great great grandpa's confederate T notes. The South's gonna rise agin' - at least Texas will anyway.
I'm a sucker. I still vote in every fucking election. However, from this day forward, I will NEVER vote for any incumbant, regardless of party. Period.
That probably is not an overall good plan. Gotta do your homework, even participate, talk to people. Democracy works really well in getting people elected who are willing to make promises that someone else has to pay for.
At least the incumbent won't spend two out of the four year term on getting re-elected, and maybe, just maybe will have a twinge of
remorse and do the right thing,even if it isn't popular. Or maybe I'm just a sucker too for believing that could happen.
The candidates are bought and paid for and we are probably screwed no matter who we vote for. We need to change the whole
election process and somehow minimize private interest while maximizing public interest.
I say they burn through it before the 2012 elections.
A very, very real possibility.
The POTUS just lied to the American people. There is no deal yet. Nothing has been voted on yet. WTF. This aint over folks.
But futures are up as well as asian markets soooo MISSION ACCOMPLISHED!!! Watch snags develop in the "Deal" after the open. Sweet dreamz.
Has Biden been told Boehner is replacing him on the ticket yet?
Really, there is no way to describe this lack of deficit cuts, congreesional votes and overall intelligence of the bill just celebrated as this:
http://www.youtube.com/watch?v=rr1aIplo6rA
Extended and pretended,
keep stacking and stocking bitchez.
So they raise the debt ceiling by 2.4trillion which will run out in 1Q2013/(probably 4Q2012 when tax receipts come in way under projection) and they offset that with 2.5T over 10 years? How does that work in anyones head but some politician? As Tyler says, we'll be at 120%Debt/GDP in a 18 months. Ridiculouse. ELECT RON PAUL, SPREAD THE WORD, TELL SOMEONE, DO SOMETHING!!!!!!!!!!!!!1
Cue Moody's and S&P in 3,2...1
You know they have staff right now trying to beat the other to the punch.
ETA Downgrade?
ETA Downgrade?
Quarter past never. The USA is the ultimate TBTF, it seems.
I wonder if the Martians plan on bailing us out with their Red Planet version of QE?
They won't dare. Homeland Security and the FBI will haul them away on economic terrorism charges
+ to Mr. HANKy ... he is cackling somewhere.
Buy Gold and Silver on the dip. Dollar collapse when QE3 is announced?
Can this be stopped by the House?
yet it can but it will not be stopped
a majority of R and D will vote for it based on their security in their various districts
in districts that lean Tea Party representatives will likely vote against it to try and save their sorry asses, ditto for the progressive leaning districts but apart from that you'll easily have this pass with at least 240
as per the comments above this is beyond bad, the banksters mission is all but complete
Oops, that went off too easily. Now
1. They didn't get their Super Congress [temporary crisis measure that's permanent]
2. They have to face up to the gun running that's killing Americans at the border.
Fire all the printing salvos! Stoke the propaganda machinery with legal render!
I think you're going to find that the 0.4% Q1 GDP print in the middle of QE2, and subsequent 9.2% number, have pretty much ended QE of any sort for the forseeable future.
It didn't work.
They'll have to try something else.
That's a fact it didn't work and anyone with sense knew it wouldn't. But that won't stop them from doing it again.
Let the Default begin. The de facto inflation default.
They think they make economic law. This is a physical law they are monkeying with. Thermodynamics. Keep heating the system with efficiency dropping off as real business gets choked out by cronies and no coolant in the form of interest rates to promote savings then investment. Meltdown. Game Over.
since when do they stop doing something, just because it doesn't work?
Asian markets going apeshit
http://clearstation.etrade.com/cgi-bin/bbs?post_id=9796543
Brent up $1.45 on the news to $118, which is really all that matters.
But one might also note the 10 yr note futs are up sharply and the yield down sharply to 2.83%. The bonds know what GDP prospects are.
And of course oil scarcity will overwhelm reduced demand.
BTW Shanghai hasn't moved, and remains down about 50% since 2007. Errr 60%.
knee jerk and/or a bull trap, as for oil, should stay bid, gold etc. can't see the USD rallying, sold my index puts on Friday on the relief rally. looking at maybe a two days of bid equities. then either EZ news or a rating agency doing their thang...it's sell again.
As for Asia, sans the money printers in Japan, China is looking very, very unstable. good market to short is the ASX200 on China bizarro markets
USD is in bulltrap territory, kinda funny as the AUD (it's risk gauge) is still bid. If the USD stays bid there aint going to be a major stock rally.
It will sell.
Fed has to buy more debt which means they'll be busy printing.
Hasn't this been done before!
http://upload.wikimedia.org/wikipedia/commons/9/93/German_Hyperinflation..."As the president’s approval rating slips to a dismal 40 percent in the latest Gallup poll, the spin-obsessed White House only looks further out of touch with reality in a nation where 75 percent of likely voters believe the country is moving down the wrong direction. This latest Twitter campaign merely comes across as yet another act of desperation from a presidency whose mantra is increasingly “leading from behind,” both at home and abroad. "
http://blogs.telegraph.co.uk/news/nilegardiner/100099148/barack-obama%E2...
dead-on comment by Suzie T:
The approval ratings tell the tale. The nation is coming around, albeit rather slowly, to the fact that our president is not as was advertised.
He does not have a first-rate intellect OR a first-rate temperament. He does not float above us god-like. He is not cool. He is not a natural leader. He is not an enlightened being. He is not the smartest person in the room. He is not well-read (nor does he seem to know much about history). He is not Abraham Lincoln, FDR, JFK and MLK all rolled into one (nor any combination of them). And he most assuredly is not the Messiah.
He is a man of small talent and small accomplishment who is in way over his head. He is an ideologue who cares not for our country but for what he would make of it. He is a narcissist who would see our nation remade in his image. And he is blind to the fact that his policies are driving us over a cliff and that he must change course. Such a deal he was.
Act of a desperate man.
futures are up. robo is levering up now..........going long..........................its green shoots.............
Duh, duh, duhn't-worry...things will get better! Here comes the solution: http://www.npr.org/2011/07/31/138867706/former-obama-adviser-brews-a-different-tea-party?sc=tw So glad NPR(No Politics, Remember!) is up to speed on this...whew...and I thought we were in trouble. FDR-lite...or FDR-anti-white...
next logical headline is s&p and moody's reaffirms US AAA bonds.
Your credit limit is increased immediately ! You have ten years to pretend to fix your spending addiction ! Hahahahahahaha ! Monedas 2011 Cuts, my ass !
Name 1 western civilization that didn't run it's deft to infinity. Exactly.. None. the sh*t's built on it ever since Moses commanded all judeo-christians.
Please continue your Jihad Debt Comedy Tour, Monedas!
Spending addiction! Cuts my ass!
I am pleased to hear that we have 10 more years to pretend to fix things. And I had been worried the end was near. Silly Bearing! Cuts are for kids!
SOROS reflexivity. The markets influence capital spending now and not the other way around. CFO's press the risk ON button effective tomorrow.
Human Breakdown of Absurdity, everytime President Hussein speaks. http://www.youtube.com/watch?v=4LygC-phaJQ&feature=channel_video_title
Tyler, I agree... Would it be possible, to obtain ( CItI %5) and {G.S. Global linx?}
Yen Cross,
R.s.V.P.
I think we shall leave one main library open for each city, closed all remainings to save budget. If you can learn why Roman Empire failed on CNN, why go to a library.
... ''The Free'' Library every 666 miles is about right. http://www.youtube.com/watch?v=XwwXVJ6275U&feature=related
31 Jul 2011: Representative Raul Grijalva, who heads a group of liberal Democrats in the House of Representatives, said on Sunday that he would not back an emerging debt-ceiling deal surrender crafted by Republican and DemocRATic leaders. "This deal trades peoples' livelihoods for the votes of a few unappeasable right-wing radicals, and I will not support it," Grijalva said in a statement. Grijalva heads the 74-member Congressional Progressive Caucus. [Exactly! Scr*w you, Obama, and your Wall Street/GOP overlords, six ways to Sunday! Invoke the 14th Amendment and be done with it! MSNBC interview (no link) with Kathy Hochul, D-NY, in a heavily *Republican* district people were asking why the wealthy did not pay their fair share, and that they DID NOT want Medicare or Social Security touched. (Hopefully, they don't want Medicaid touched, either.) This was a GOP district/phone town hall w. 6,000 callers on a Saturday afternoon! Obama, you f*cked us on the public option, the Bush (now Bush/Obusha) tax cuts for the wealthy - not to mention the Patriot Act, Guantanamo Bay, Bagram -- and a thousand other lies, obfuscations and betrayals. --Lori Price, Citizens for Legitimate Government
Para graphs? I never forget ...
YEN...
[ HONESTY]
.
Grijalva and about 70 other dem members of the House, have not been checked for rabies yet, but they are card carrying members of the Socialist Democrats of America. Those are the real extremists and radicals undermining the US towards a UN conttrolled, one world, socialist government. How nice that the MSM never fails to report on these marxist miscreants in the most positive light, advancing global totalitarianism.
Un can't control their own bowel moves.........give it a rest.
.
Grijalva and about 70 other dem members of the House, have not been checked for rabies yet, but they are card carrying members of the Socialist Democrats of America. Those are the real extremists and radicals undermining the US towards a UN conttrolled, one world, socialist government. How nice that the MSM never fails to report on these marxist miscreants in the most positive light, advancing global totalitarianism.
...and...?
So the congressional progressive caucus thinks that a $1.5 trillion deficit isn't enough and we need to spend more. Tax increases on those making $250K/yr flying around in their private jets isn't going to close that deficit.Repealing the bush tax cuts will only bring in an additional $120 billion and the lowest tax bracket (those making less than $20K) will increase from 10% to 15%.
And on the Seventh Day (slide), he said SHORT GOLD
They are throwing a hog-trough party on the WhiteHouse lawn this evening in celebration. Fat cats, government contractors, lobbyists, usual suspects, shuksters, and banksters invited to this exclusive event. Taxpayers may gather around the fence and hope for a few bones to be tossed their way.
A bit of a tangent, but relevant...Einstein in 1949:
"Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights."
Tyler!
Good call.
No cuts in Medicaid, just Medicare? How can this be?
A major reason for rising medical costs is the expanded use of the Medicaid program for illegal immigrants. Obamacare extends the Medicaid crisis and relies on Medicaid to cover upwards of 20 million more people beginning in 2014.
“Between 1990 and 2010, national Medicaid spending increased from $72 billion to over $400 billion,” according to a May 6, 2011 report by the Heritage Foundation. “Federal spending alone has increased from $40 billion in 1990 to an estimated $271 billion in 2010. At the state level, Medicaid spending has increased four times faster than elementary and secondary spending, five times faster than higher education spending, and nine times faster than transportation spending over the past two decades.”
Federal laws provide states’ incentives to provide Medicaid coverage to illegal immigrants. All state Medicaid programs offer a long list of services; only four states check for citizenship before awarding Medicaid. Reuters reports that undocumented immigrants can get Medicaid coverage for health emergencies if they are in a category of people otherwise eligible, such as children, pregnant women, families with dependent children, elderly or disabled individuals, and meet other requirements.
California’s version called Medi-Cal covers well-baby maternity care, delivery expenses and long term care that are incurred for children born to illegal immigrants. Thus “anchor babies” become medical insurance policies.
Dr. Madeleine Cosman reports that free medical care to illegals between 1993 and 2003 closed 60 hospitals in California due to more than 50% of unpaid services, and another 24 California hospitals closed in 2004….
According to Wikipedia: “In 2006, the Oklahoma Health Care Authority estimated that it would spend about $9.7 million on emergency Medicaid services for unauthorized immigrants and that 80 percent of those costs would be for services associated with childbirth.”
IOW, Americans paying both for Medicare and for those on Medicaid are going to receive fewer reimbursed services, while those receiving free Medicaid benefits are not.
May 25'th 2009 [ J.R. ].
We are saving a failing system created by debt by raising the debt ceiling! May 25, 2009, is right on.
More hope and change bullshit you can believe in...
If Moody's does not downgrade the US, they should be laughed out and completely discredited.
comments , appreciated... yen
As much as I had hoped that it wouldn't come to this it has...and in the end it's exactly what we all knew would happen. There is no backbone or restraint in DC, it's all just one big clusterfuck.
I am extremely disappointed
2013?
what a joke
we aren't getting past 2011/2012
Can someone please explain this to me?:
"Obama underscored that point. He said that, if enacted, the agreement would mean "the lowest level of domestic spending since Dwight Eisenhower was president" more than a half century ago."
Are you f**king kidding me?! Do people actually buy that s**t?! A third grader knows that's not true by a factor of 10. WTF!?
If this a**hole gets re-elected I'm moving to New Zealand post haste.
As % of GDP, which won't be true long if GDP growth goes negative.
Without the final document, nobody knows how much 'deficit reduction' will be effected. Most analysts believe cutting the deficit will aid 'growth' somehow.
So will unicorns if you can catch them!
In our (previously enlarging) waste-based economy there has to be some entity that can lose money continuously and remain in business. Why?
In order for private interests to prosper -- gain a surplus or 'wealth' -- some entity must not prosper -- run a deficit. This is because there is no organic gain by economic activity: unless you drive a taxi or run a rooming house, your car or house does not earn any money. The capital base shrinks as inputs are burned up for nothing: the outcome is that all profits are monetary based on the cycling/velocity of money rather than transformative returns on materiel.
It's the difference between selling a Picasso or becoming Picasso.
Since there is no possible monetary system where all entities can have surpluses, private surpluses need equal deficits somewhere. No private business can run continuing deficits and remain functioning. Enter the government. It can and does lose money and stay open.
Unlike private companies, government has a monopoly on the creation of currency and can do so at near zero cost. It is the ability of this entity to create from nothing that represents the private sector's great wealth. Cut government's losses and cut private profits simultaneously (with a bit of a lag).
What do you think is going to happen when the designated money-loser is forced to start losing less?
Most people in economics and elsewhere (here) don't understand this simple fact of economic life. They repeatedly confuse national accounts with household budgets. Over and over is seen and heard: "we have to live within our means", "we have to balance the budget", "We need a constitutional amendment", and "We need to get rid of the trade deficit", etc ...
We can, but the US will have to give up all its automobiles and aircraft! This is why I say whatever the outcome is energy conservation by other means.
The government cannot be a business, it cannot make a profit ... unless all the other businesses in the country fail.
Right now the 'designated loser' is failing because the disconnect between what the money economy can do and the constraints on the physical economy. Money is in the 21st century while energy races back toward the late 1800's. Meanwhile, as resource waste is repriced by the markets and becomes more expensive, the private/public enterprise collapses under the weight of its contradictions.
One reason the government deficit is huge because of ongoing high energy costs -- fuel costs 1000% more than it did in 1998. The other reason is because of our establishments' great wealth.
Now ... the establishment in blind desperation wants to outlaw business profits.
Good luck onya mates!
The Rev. John Witherspoon – remembered mainly for his tenure as President of the College of New Jersey (Princeton) commencing in 1768 and for having been the only clergyman to sign the Declaration of Independence - had an appreciation for gold and silver as representative of commodities, due to their value on the grounds of their scarcity, and a distaste for printed bills due to paper’s abundance that through inflation would increase the price of industry and its fruits.
I agree with Witherspoon’s evaluation of the damages done and imbalances created by corrupting a nation’s currency – such as in the crisis America is experiencing now.
“Experience,” Witherspoon warned, “has every where justified the remark, that wherever paper is introduced in large quantities, the gold and silver vanishes universally. The joint sum of gold, silver, and paper current, will exactly represent your whole commodities, and the prices will be accordingly.
“It is therefore as if you were to fill a vessel brim full, making half the quantity water and the other oil; the last being specifically lightest, will be at the top, and if you add more water, the oil only will run over, and continue running till there is none left.
“How absurd and contemptible then is the reasoning…that the gold and silver is going away from us, therefore we must have paper to supply its place. If the gold and silver is indeed going away from us, that is to say, if the balance of trade is much against us, the paper medium has a direct tendency to increase the evil, and send it away by a quicker pace.
“Hence it may be seen, that the resolution of the question, whether it is proper to have paper money at all or not, depends entirely upon another, viz. whether the evil that is done by augmenting the circulation medium, is or is not over-balanced by the facility given to commerce, and the credit given to particular persons, by which their industry and exertions are added to the common stock.”
IOW, is individual “industry” – that is a person’s daily labor or his business – bringing in more greenbacks, but their value is shrinking? That is the evil of inflation via the imbalances created by quantitative easing. That is in part why the prices of commodities are increasing despite recessionary conditions; the investment bankers have used access to QE funds to impact commodity prices, such as for coffee, and basic metals such as copper. In turn, this has impacted inflation.
"So will unicorns if you can catch them!"
Italy has one. Anything is possible.
http://www.dailymail.co.uk/news/article-1025793/The-horned-deer-solve-mystery-unicorn.html
I see 2.8 trillion (!) more reasons to own precious metals.
]
The perfect response to a perfect clusterfuck.
The House has yet to vote.
LOL @ that fucking .ppt presentation.
http://www.youtube.com/watch?v=CnjaUoR15dU
i can't believe anyone falls for this hand waving bullshit!1!!
Obama to declare two new Wars, "In the Name of Peace".
http://www.wnd.com/index.php?fa=PAGE.view&pageId=326893
http://www.americanthinker.com/2011/07/the_most_dangerous_war_in_the_middle_east_has_already_begun.html
...war(s) and ''emergency provisoin(s''), while CNN sells a borderless criminal world on the idiot box, as President Hussein (of America & Global Babylon) held the U.N. Security Chairman post at the same time and gets a Nobel Peace Prize for not letting loose with a nuke ''pre-emptively''? http://blogs.christianpost.com/bibleprophecy/2011/07/the-early-church-fathers-belief-about-the-antichrist-29/
...no feeling http://www.youtube.com/watch?v=Rz3KQVLqjY0
It will be interesting to see how Treasury sales go. There is a lot of debt to be sold or rolled over in a short period
of time and I can't see how treasuries will be attractive at current rates with risk off and inflation threat increasing.
I hope your are not long treasuries.
Investment grade corporates even high yield bonds seem a better bet.
There are some good ETF short term yield plays also.
The only thing I have been long on for a long time is Physical PMs.
MONKEY LOv..
that and rating agency lurking. we will get this big relief rally, then it will sell next few days. after all this BS regarding rge debt ceiling, can't see Asia being to hot and horny for UST's anymore. Yields up.
I can smell the toner cartridges and paper burning from here.
BRIC Banks Signaling Credit Risks as Loans Sou
http://www.bloomberg.com/news/2011-07-31/banks-in-brics-signaling-credit...
Obama, the great traitor, Wall Street in a black trojan horse. The only
but minor if any consolation is that a republican president would try to fuck the middle class even more... but Obama is doing a good enought job of that that republicans should be happy.
So,, Obama goes on TV to gloat about the deal. Now he really pisses off the tea party folks since this is not a done deal. My guess, they vote it in but not by much of a margin. This is all just so much political posturing bullshit. Does anyone thake any of these morons seriously. Gold down 14 bucks, will add to miners on the dump tomorrow. Nothing is solved. Nothing changes and now we have a minimum of 16 Trillion debt to repay. Have we paid any principle back in the last 30 years? NO!
What a crock of shit.
So,, Obama goes on TV to gloat about the deal. Now he really pisses off the tea party folks since this is not a done deal. My guess, they vote it in but not by much of a margin. This is all just so much political posturing bullshit. Does anyone take any of these morons seriously. Gold down 14 bucks, will add to miners on the dump tomorrow. Nothing is solved. Nothing changes and now we have a minimum of 16 Trillion debt to repay. Have we paid any principle back in the last 30 years? NO!
What a crock of shit.
So Reid thinks they side-stepped "a United States financial collapse and a world-wide depression".......the trinity will be walking on water tomorrow at the Washington Monument reflecting pool. Be There.
I'm trying to fix a pumpkin vine. Baking soda and vegetible oil work..
I hate the White Fungus on the. Facts, and the gay mini post, is WEAK tyler. I have knards! Don't f... with me!
YEN
What?
PWD
I don't quite understand yet.
posting while drunk