Today's FTMFW Soundbite Is... (And Live Obama Town Hall Webcast)

Tyler Durden's picture

...Courtesy of the teleprompter:

  • OBAMA SAYS SOLVING DEFICIT IS `NOT THAT COMPLICATED'

Translated: "My fellow Americans, I forgot my antipsychosis medications this morning, and god bless. Thank you." Watch the town hall webcast below.

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FunkyMonkeyBoy's picture

Obama went on to say "Releasing a birth certificate that looked genuine was a lot more complicated."

PaperBugsBurn's picture

 

 

Jesus H Christ, what a bunch of sheeple!!!!

 

The bankster CIA Manchurian Candidate at his finest.

Chuck Walla's picture

Kruschev was mis-interpreted when he said: "We will Barry you!"

Robbie4's picture

@ Tyler Durden. Just a question: say that, hypothetically, the government paid off all its debts, would there still be sufficient dollars left in the economy and if so, where did they come from? As far as I know is the government the only organisation that is able to create financial assets out of thin air. Every time the government spends, money is created into the economy out of thin air and every time taxes are paid, money is removed. It's a misconception that the government of a country like the USA needs to borrow to finance their spendings. Treasuries are just a monetary instrument and a way for the private sector to save with interest. Even the Fed is not able to add financial assets to the economy. F.e. Q.E. is clearly not adding any financial assets to the private sector. At the moment Treasuries were issued, dollars were removed from the economy. Now with QE the opposite is true and netto no financial assets were added to the economy. Is there such a big problem with government spending in times where the private sector is heavily deleveraging? Off course it brings inflationary pressure, but this effect is heavily reduced by the deleveraging private sector. I understand that government spending can be very dangerous in times when the economy is on full capacity, but now?! I actually don't see the big problems of the deficit of a country that has the monopoly on their currency and debts denominated in that currency. I see potential inflationary problems, but again now?! Can you tell me where my reasoning is wrong?

Koffieshop's picture

Is there such a big problem with government spending in times where the private sector is heavily deleveraging?

 

Depends on HOW you spend.

You could spend by improving infrastructure and stimulate domestic production

Or you can spend on more wars and propping up the failing system that rewards the outsourcing of production, thereby making the system even less sustainable.

Robbie4's picture

I totally agree that government spending should be focused on sustainability and create added value to society (infrastructure etc) But IMO (and please tell me if I am wrong) many people on zerohedge are concerned about the fact that the government can never repay its debt, and that concern is, for different reasons, just based on nothing and shows a lack of understanding of how a modern monetary system works for a country that has the monopoly on its currency and debt denominated in that currency.

Koffieshop's picture

The US got itself in a situation where destroying money needed not keep pace with creating money. This was because the world economy was absorbing Dollars.
This has been going on for some decades and the US got thoroughly addicted to this 'tax on global trade'. This is why the deficit is so big.

The world can not absorb Dollars indefinitely however.
At some point the US budget needs to be balanced, or there will be rampant inflation.

The fear that you speak of is about the world rapidly losing all confidence in the ability of the US to sustain the value of the Dollar. The sell-off that would follow will cause hyperinflation in the US.

Paying back your debts in hyper-inflated currency counts as default.

Robbie4's picture

"This is why the deficit is so big."

Is it? Again I am really against the power of the Fed, the power of governments and the financialisation of the economy, and I consider myself a strong believer in free markets, but I still don't see why the deficit is unsustainable.

"The world can not absorb Dollars indefinitely however."

Why not if government spending, taxation, etc are well managed?

"At some point the US budget needs to be balanced, or there will be rampant inflation"

This statement may be true. But before I can agree, can you define "balanced"?

"The fear that you speak of is about the world rapidly losing all confidence in the ability of the US to sustain the value of the Dollar. The sell-off that would follow will cause hyperinflation in the US. "

There is absolutely no reason to believe that the market is going to lose all confidence in the ability of the US to sustain the value of the Dollar. Well, maybe in the future when politicians create another unnecessary crisis by having a new non-discussion about the self-enforced precondition for the monetairy system that is called the "debt ceiling".

"Paying back your debts in hyper-inflated currency counts as default."

There is no paying back for the USA, because the government finances spendings by creating money out of thin air and therefore never had to borrow to finance. Btw, without the deficit, the US private sector would not even be able to save.

Reese Bobby's picture

"Btw, without the deficit, the US private sector would not even be able to save."

Seems dumb even by your standards.  There can always be savers and borrowers.  You could also still have fractional reserve banking if lenders took the risk of a bank default.  I guess MMT is kind of neat because it allows disciples to make crazy statement that sheeple might just nob their head at; unless you are actually the real sheeple.

Robbie4's picture

"Seems dumb even by your standards.  There can always be savers and borrowers. "

Funny that people that know less, offend more. I am, off course, talking about the private sector as a whole.

"You could also still have fractional reserve banking if lenders took the risk of a bank default."

Fractional reserve banking is not the system we have at the moment. Banks are not reserve constraint, when lending money.

"I guess MMT is kind of neat because it allows disciples to make crazy statement that sheeple might just nob their head at; unless you are actually the real sheeple."

Most MMTers are very much against the Fed and a lot of the policies taken atm. MMT is not an ideological direction. It just explains how the
monetary system works. If you were a little more open to arguments and were able to think for yourself, you could actually learn something from it.

StychoKiller's picture

Why not if government spending, taxation, etc are well managed?

 

Define well-managed, then try to find it in the US Govt...we're waiting...

Koffieshop's picture

 

"The world can not absorb Dollars indefinitely however."  Why not if government spending, taxation, etc are well managed?

Because the world population can not grow forever. 
 
Because economies can not grow forever. 
 
Because the SCO countries are slowly phasing out the Dollar for trade, for strategical and political reasons.  
 
Because new technical advancements today can just as well shrink the world economy, making people less reliant on the labor of others.  (Google around for "3D printer" for example)

---

 

"At some point the US budget needs to be balanced, or there will be rampant inflation" This statement may be true. But before I can agree, can you define "balanced"?

 

Spending in such a way that does not cause inflation or requires your currency to disappear abroad.

---

There is absolutely no reason to believe that the market is going to lose all confidence in the ability of the US to sustain the value of the Dollar

Have you seen the price of gold lately?

---

 

There is no paying back for the USA, because the government finances spendings by creating money out of thin air and therefore never had to borrow to finance. 

You are forgetting that international creditors are holding the receipts. So either the Dollar needs to maintain its purchasing power or the US won't be able to borrow in the future.

If the US wound't have borrowed but just printed, there would be unstoppable inflation.

 

 

 

Robbie4's picture

"There is absolutely no reason to believe that the market is going to lose all confidence in the ability of the US to sustain the value of the Dollar

Have you seen the price of gold lately?"

The gold price is much more correlated with real interest rates than with the marketperception of the ability of the US to sustain the value of the Dollar.

Koffieshop's picture
What you are saying here is that the perceived risk of an investment is much less worthy of contemplation then the yield it gives.  
 
With this logic it would be a great idea to walk into a casino and put all your money on one number at the roulette table. 
 
 
 
You can be sure most investors don't think this way.

 

 

Reese Bobby's picture

Wow.  QE buys assets with dollars created out if thin air and no dollars are removed from the economy.  QE2 was fun because the $600 billion was used to prop up the european banks that are still insolvent.

 

UST's are just a monetary instrument; one that is designed to charge taxpayers for the creation of money that could be issued for free.  You see Robbie4, the Global Bank Cartel owns and controls the federal reserve.

 

Meanwhile our "government" spends beyond its means in good times, average times and bad times.  And it will get worse: look at CBO's forecast of exploding deficits and debt even with rosy economic assumptions.

 

Tell your teachers they are morons.  And stop reading/watching the MSM.

Robbie4's picture

"Wow.  QE buys assets with dollars created out if thin air and no dollars are removed from the economy.  QE2 was fun because the $600 billion was used to prop up the european banks that are still insolvent."

At the moment the Fed bought the Treasuries, Treasuries were removed from the economy and Treasuries almost function as "money". Treasuries are financial assets which you can use as collateral to buy stuff in a lot of situations. The inflationary argument of QE is based upon the wrong assumption that inflation is heavily correlated with M1.

"UST's are just a monetary instrument; one that is designed to charge taxpayers for the creation of money that could be issued for free.  You see Robbie4, the Global Bank Cartel owns and controls the federal reserve."

That might be true. I am also very much against the current monetairy/financial system and especially the existence of the Fed. I just
want to discuss the reasons why the system is wrong and what are the
right solutions for the different problems. At the moment I have the feeling
that a lot of people don't actually understand how the monetairy system works and are therefore angry for the wrong reasons.

"Meanwhile our "government" spends beyond its means in good times, average times and bad times.  And it will get worse: look at CBO's forecast of exploding deficits and debt even with rosy economic assumptions."

That indeed is (if true) a big problem, like I said in my original post.

"Tell your teachers they are morons.  And stop reading/watching the MSM."

You didn't give one single argument that proves me wrong, so I won't.

Reese Bobby's picture

Think of the Fed as a Giant Global Bank Cartel SIV with an implicit federal government guarantee.  Next ponder the fact that 12 of the Primary Dealers are owned by foreign banks.  Most importantly, don't forget to party and chase tail as that is a very important part of your academic experience. 

Robbie4's picture

"Think of the Fed as a Giant Global Bank Cartel SIV with an implicit federal government guarantee. Next ponder the fact that 12 of the Primary Dealers are owned by foreign banks."

I never said I agreed with the monetary system and I never denied that there is a lot of corruption. I just want to discuss the working of the modern monetary system.

"Most importantly, don't forget to party and chase tail as that is a very important part of your academic experience."

Unfortunately, my academic experience finished long ago. Thanks for the tip though. I allways thought Modern Monetary Theory was the perfect turn on for girls and because of you I now know this thought is the reason masturbation is still my only sexual experience.

Reese Bobby's picture

I am talking about MMT.  But the masturbation comment is amusing.  Let's agree to have no common ground on QE and I wish you well.  I'm going to go talk to a wall I can see now...

StychoKiller's picture

Answers to your questions can be found in:

"The Creature From Jekyll Island, a Second Look at the Federal System",  5th Ed., G. Edward Griffin, ISBN:  978-0-912986-45-6

Chuck Walla's picture

The system is wrong because it puts power in the hands of corrupt, unaccountable bankers, politicians and various other nefarious wrongdoers.  It assumes the people are too stupid to do the right thing and the economic mechanisms are failures after thousands of years of experience. So, these crooks and liars "guide" us to the "proper" conclusions: ie inflate away any reason to save so they will spend. Inflate housing so they will spend. Destroy the value of savings so they will spend. Not once does the genius of a Krugman or Benank or Obama et al ever worry about saving.  So if everyone spends, who gets the benefit of selling these mostly depreciating assets?

SYantiss's picture

Robbie,

 

Good questions all.  It's true that in a static environment where T-Bills espunged debt, there would be little problem in continuing the "print/destroy" debt model.  The problem with this is:

1. Foriegn governments buy the debt in their currency with the expectation of a return (interest).  So the next issuance or repayment needs to be larger than the initial issuance.

2. The governement has made promises to pay a specified amount at some point in the future.  These liabilities need to be funded at some point or deferred to a TBill or some other asset exchange.  

3. The promises of payment are based upon debt that is, in turn, based upon faith that payment will be made.  To this point, we must turn to the Hitchhiker's Guide to the Galaxy...  wherein God, in protest to the loss of faith in Him appears and proves that He is real...  but, since His ability to BE is based upon faith, He disapears in a POOF of logic.

When people lose faith in the ability to repay, the demand for the $ is reduced.  Since the $ is sustained completely upon issuance of new debt, it is hard to imagine that the $ can continue without unlimited unicorn horn licking.

4. There has been a real devaluation of the $ in terms of purchasing power over the last (oh... take your pick of years)...  If you are a foriegn government who has to buy his oil in $ and the $ you have in your vault purchase less oil each year, will you want to hold the $'s?  Won't you be pissed when you've been robbed of your purchasing power through excessive printing by the issuer of the $?  I know I am.

Racer's picture

And  so... why hasn't he solved it yet?

Kestrel_1's picture

When he had the Green Bay Packers at the White House he joked that Aaron Rodgers should be traded to the Bears. I think Green Bay should do this but only if Obama get's rid of Timmy and Ben...it is a start.

SheepDog-One's picture

Exactly. If its so easy, then when are you going to get around to putting your 'easy solution' in play? Then again, this might be bad news as WW3 would solve the debt problem, confiscating all americans bank accounts and stock holding would be a nice plus the the banksters debt. Just depends on what the meaning of 'is' is.

bernorange's picture

Obama was elected by people who think he shits unicorns and rainbows.  Michelle Bachmann tried to steal his thunder with her comment that the economy could be fixed in 90 days during the last debate.  Obama has to step up his game for the starry-eyed lemmings.

pods's picture

I think she stole his thunder with the Corn Dog photshoot.

pods

MillionDollarBonus_'s picture

"And  so... why hasn't he solved it yet?" He is working on it. It's not easy managing the largest economy in the world, and ungreatful comments like this are not helpful at all. You should be at least satisfied that he has managed to keep this recovery going so that fewer people lose their jobs. The only barrier to prosperity is this libertarian religion that oposes what this economy is lacking most - AGGREGATE DEMAND. As I've said before, the ONLY way to boost our economy is further monetary and fiscal stimulus.

andybev01's picture

um...you forgot the <sarc> disclaimer...

 

And by the way, I would be truly 'greatful' if he were doing more than the 'least' he could be doing.

This little bus tour he's on right now is a poorly disguised campaign trip.

Anonymouse's picture

Saving it for an October Surprise

drink or die's picture

Just dissolve Congress and he can solve it no problem.

carbonmutant's picture

Don't laugh he still has another year to try that...

cowdiddly's picture

Already solved, Super Congress 

Milestones's picture

What a total lying piece of shit!   Milestones

djsmps's picture

He saved GM. He just told the crowd that. He also assassinated bin Laden.

baby_BLYTHE's picture

It'll be epic when they fail again.

HelluvaEngineer's picture

Nah, it'll be epic when they kill Bin Laden again.

Mad Max's picture

OBL still has 6 of his 9 lives left.  We can assassinate him another 3-4 times easily without raising any suspicions.

I just hope that the miniseries accurately portrays him wandering the Afghan desert with his dialysis machine, looking for an outlet to plug it into.

monopoly's picture

I am so glad Tyler does not give us a test on these videos. I refuse to watch them. And so much for the gold correction.

wang's picture
wang (not verified) monopoly Aug 15, 2011 1:24 PM

I blocked them cause even opening this article the WH site dumps a bunch of LSOs on your computer, hard to get rid of unless you run FF

Ahmeexnal's picture

Is this bullish for SBUX?

101 years and counting's picture

i listened to 8 seconds and couldnt take it anymore.

RichardENixon's picture

I think you win a free Klondike Bar if you last 5 seconds. Oh wait, that's for your wife.

Debtless's picture

It's really sux the only choice democrats have to vote for is more of this nonsense guy. As the republican establishment ignores R. Paul, the only candidate it has that has any real chance of bringing the dissatisfied democrat/independents over. We're truly fucked into more of the same.

Smiley's picture

Puns, Platitudes, anecdotes and cliches...

 

VERBAL DIARRHEA!

nmewn's picture

Eat your peas you bitter clingers!

GenX Investor's picture

Zip your lip with a padlock, na na na, please reelect me with your pants on. I'm talkn' bout... blah blah blah, blah blah blah.

 

American Sucker's picture

It's simple to solve the deficit problem.  DEFAULT.  There's no good reason for 2% of the economy to be burnt up paying interest on the debt - primarily to the rich and foreign governments - nor for a trillion dollars of capital every year to be fed to the gaping maw of the war machine.  Stick it to the rich and default!

DogSlime's picture

Amen.  Not just the US either.  We should be looking at this here in the UK too (since it seems inevitable anyway).