Archive for the Debt/Deficits Category

Debt Insouciance.  Does Debt Really Matter In The “Debt Age”? (February 25, 2019)

Posted in Debt/Deficits, National Security, Noble Prize in Eco-nomics, Petrodollar, Population, Supernova Dollar on February 25, 2019 by e-commentary.org

. . .

K          “A billion a day, they say, in interest alone.”

J          “Folks should show more interest in this development, I’m just saying.”

. . .

J          “The National Debt is now officially over twenty two Trillion dollars ($22,000,000,000,000.00).  And we spent the electrons producing plastic and plundering the Planet.”

K          “Most of it was spent bombing countries and killing people.  I suspect that if we could sub poena God to testify and muse on the situation, we would discover that the real National Debt accurately calculated is over sixty six Trillion dollars ($66,000,000,000,000.00).”

. . .

K          “Twenty two Trillion dollars ($22,000,000,000,000.00) in Debt are on the books and an additional twenty two Trillion dollars ($22,000,000,000,000.00) are not on the books but were devoured by just two Departments (DoD and HUD).  I suspect there are probably another twenty two Trillion dollars ($22,000,000,000,000.00) off the books at other Departments.”

J          “So what do we make of the economic theories that correlate debt and domestic product if the real Debt-to-GDP ratio is not hovering at 100+% but really exceeds 300+%?”

K          “Or way above 400+%, if there is another twenty two Trillion dollars ($22,000,000,000,000.00) in ‘dark money’ that is additionally off the books.”

. . .

K          “There are at least a dozen ‘ten’ets that provide the only perspective on debt, public and private, and should be memorized by heart:

1. Debt matters.

2. Debt matters.

3. Debt matters.

4. Debt matters.

5. Debt matters.

6. Debt matters.

7. Debt matters.

8. Debt matters.

9. Debt matters.

10. Debt matters.

11. Debt matters.

Reagan was wrong.  Cheney was wrong.  Most babblers are wrong.  In the private and public sectors alike, Deficit – the rate – and Debt – the total – spending serve to accelerate, yank and suck ‘consumption’ from the future into the present.  No one polls those whose future consumption is being stolen.  However, the unborn are saddled with the debt.  This amounts to the greatest inter-generational crime in history.”

J          “That may be the only acceptable tattoo.  ‘Debt matters.’  Those who opine on the greatest threat to our national security do not understand the greatest threat to our national security but are nonetheless allowed to opine on the greatest threat to our national security.  Despite almost complete silence by those who are allowed to make public noise, the greatest threat to our national security is . . . the unsustainable national Deficit and Debt.”

K          “Unless the Federal Reserve keeps interest rates near zero, the Debt will not even be paid in part.  Low interest rates devastate the lives of millions of those at the other end of the life cycle who have been born for a long time – retirees – who reasonably anticipated a rate of return of 6 to 8 percent on their money in their final years.” 

J          “The unborn and long born are the targets and the victims in America today.”

. . .

J          “To explain the growing cacophony of Debt insouciance, explore the sub-sub-conscious.  Most comment makers across the political and economic spectrum are unable to admit that the Debt will never be repaid, so they contend instead that the Debt does not really matter.”

. . .

[On page 136 of Andrew McCabe’s book, recounting a 2017 Oval Office meeting, he observes:  “Then the president talked about Venezuela.  That’s the country we should be going to war with, he said.  They have all that oil and they’re right on our back door.”]

[See the e-commentary at “Over Over-Population:  10 Billion Little Miracles (And Counting) (And Costing) (January 26, 2015)” observing that accelerating consumption from the future to the present results in a much greater “effective world population” today that is closer to 10 billion miracles effectively punishing and pummeling the Planet even more ruthlessly than the 8 billion miracles of record.  “Deficits Do Matter (January 7, 2008)” discusses the concern with Debt and Deficits in more clinical detail.  “Forgiving American Debt? (March 3, 2008)” eleven years ago notes that the United States will never pay off the national Debt and yet all economic models and forecasts assume that the national Debt will be paid off.  “America The Bankrupt:  Economics 210 in the Land of the Freeway and the Home of the Wave (January 17, 2005)” more than fourteen years ago addresses the impending bankruptcy of the United States.  “National Financial Literacy Month: Teaching Financial Literacy In The ‘Debt Age’ (April 25, 2016)” asks whether there is any serious interest in teaching financial literacy in the “Debt Age”.  “Venturing A Few Unfounded And Unwarranted Predictions (July 13, 2015)” provides some further analysis and discussion of the ”Supernova Dollar” and other concerns.  “Third Annual Noble Prize In Eco-nomics (October 8, 2019)” discusses the missing money in the federal budget, among other concerns.]

Bumper stickers of the week:

Past, present and future walk into a bar.  It was tense.

Debt matters.

To Be (In Debt), Or Not To Be (In Debt), what is the answer? (July 23, 2018)

Posted in Banks and Banking System, Debt/Deficits, Interest Rates, LIBOR, Wall Street on July 23, 2018 by e-commentary.org

. . .

K          “The argument and the aspiration is that there will be a debt jubilee relieving them of debt.  Acquire the debt now and be ready for the great debt reset.”

J          “Yet someone else expects to be paid on that debt and may not be jubilant if there is a jubilee.  Few will voluntarily release the debt of another.  That is the dreaded counterparty risk.” 

K          “I remind others that foreclosures continued unabated throughout the First Great Depression.”

. . .

J          “Another observation is that the government’s only solution to debilitating debt and deficits is to keep printing money and then in desperation to inflate the economy and prices.  The debtors who can maintain their cash flow may be able to ride the government’s coat tails and pay their debts with dollars worth substantially less.”

K          “The dollars may be worth less, but the homeowner/renters will be forced to pay more dollars.  I am confident that even someone who has a fixed rate mortgage will discover that the interest rate is nonetheless cranked upward unilaterally by the financial players.  The scandalous LIBOR interest rate scheme is disappearing which may vitiate some loan agreements.  And sure enough, the courts will not offer any hope or redress to the homeowner.”

J          “But the judges will make their tee times.”

. . .

J          “Student loan debt is expressly not dischargeable in bankruptcy and serves to enslave the kids who may be the ones to spearhead a jubilee.”

. . .

K          “If you are in debt, you are in servitude to someone else.”

J          “No question.  But not everyone is free to make the choice to be debt free.”

. . .

[See the e-commentary at “National Financial Literacy Month: Teaching Financial Literacy In The ‘Debt Age’ (April 25, 2016)”.]

[See “The Most Important Number in Finance Is Going Away.  Wall St. Isn’t Prepared” in “The New York Times” by Matt Phillips dated July 19, 2018.]

Bumper stickers of the week:

Debt is not so good

“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.”  Ogden Nash 

Concerns, Troubling (July 9, 2018)

Posted in Civil Rights/Civil Liberties, Debt/Deficits, Freedom / Liberty, Money, Price, Society, Supreme Court on July 9, 2018 by e-commentary.org

. . .

K          “Decreasing velocity of money.”

J          “Increasing inequality.”

K          “Inverting yield curves.”

J          “Perverting civil liberties.”

K          “Distending price-earnings ratios.”

J          “Exploding national deficit.”

K          “Imploding institutions.”

J          “Exploding personal debt.”

K          “Collapsing trust.”

J          “Decreasing freedoms.”

K          “Increasing prices.”

J          “Deflating credibility.”

K          “Disturbing climate patterns.”

J          “Destroying the [Supreme] Court.”

. . .

[See the e-commentary at “Amtrak – The (Rail) Road to National Security (January 23, 2006)”, “Humanity’s Motto:  To Enslave And To Colonize (January 27, 2014)”, “Twenty Sixteen (January 4, 2016)” and “Prepping:  Public and Private Perspectives (April 27, 2015)”.]

Bumper sticker of the week:

A system that cannot go on forever will not go on forever

The Mandibles, FRNs, SDRs, IMF, G20, WTD! (September 5, 2016)

Posted in Book Reference, Collapse, Courts, Debt/Deficits, Dollar - World's Reserve Currency, Federal Reserve, Gold, Gold Standard, Guns, INFORM Act, International Finance, International Monetary Fund, Journalism, Money, Newspapers, Petrodollar, Press/Media, SDR - Special Drawing Rights, Silver, Silver Standard, Special Drawing Rights (SDR), World's Reserve Currency on September 5, 2016 by e-commentary.org

. . .

X          “Some of the folks at the G20 Summit may kick around the future composition of the ‘Special Drawing Rights’ that is emerging as the new world’s reserve currency.  The International Monetary Fund formally sets the composition of the SDRs, yet the major players gathered in China yesterday to discuss such matters.  A thing is now being described as a right.”

Z          “Sounds like they are creating a right to reach first for your gun.”

X          “Or they are sketching a new picture of the economic future based on rights rather than on power and circumstance.”

Z          “Or someone special who has been allowed to have the only gun in the great currency gunfight now must play well with others who are suitably armed.”

X          “Or the one with the big gun is now being disarmed.”

. . .

X          “Felicitous publication really.”

Z          “Timely, even.  The times they are changin’ the way we will make change in the near future.”

X          “In The Mandibles, Lionel Shriver adopts Keynes’ term ‘Bancor’ rather than the new age term ‘SDR’ to describe supplementary foreign exchange reserve assets.  As the U.S. Petrodollar slips as the world’s reserve currency and then as the dominant component of the SDR/Bancor, the United States people will slip to second-world status in the world.”

Z          “The way I describe it, when the Petrodollar is no longer the big dog, the United States is no longer the leader of the pack.”

X          “Prices will increase and perhaps double in short order before more structural disorder devolves.  Our McMansions still will sport baroque brushed nickel bathroom fixtures in the multiple bathrooms, yet in due course the water coursing through the corroding pipes will be increasingly intermittent and decreasingly safe.”

Z          “Many of us have those problems now while everything appears to be dory hunky.”

. . .

X          “Her description of the human consequences is very plausible, yet her explanation for the underlying causes is only partially complete.  Contemporary economic doctrine is exposed as voodoo and a specious secular religion that rationalizes those in power acquiring and retaining wealth.  The entitlement Ponzi scheme receives appropriate blame.  The pernicious involvement of the Federal Reserve is alluded to obliquely, yet the entrenched corruption and incompetence in every quarter are not addressed.”

Z          “She does not describe the institutions that are failing systematically and simultaneously.  Congress, courts, executives and executive agencies, bureaucrats, universities, news outlets, parents, preachers, prophets, you name it.  At some time, a fragile, fractured, fissured and fundamentally weak system of manipulation and intervention will fail with consequence.”

X          “She does observe that the traditional news fashioners are defunct.”

. . .

X          “‘The Chip’ is first described in an e-commentary titled ‘Monitoring The Masses:  The Card And The Chip’ published on January 12, 2015.  She further develops the human impact of implanting ‘The Chip’ to control and corral the masses.  ‘The Chip’ is so much more efficient and effective than the corn chip and football at sating the populace.”

Z          “‘The Chip’ is an electronic lobotomy that is more powerful, pervasive and perverse than fear or drugs.  Technology saves us.  I think that is what one would conclude.  Surely.”

. . .

X          “An empire cannot continue to mimeograph a fiat currency and force it on the rest of the world at great cost and consequence to the rest of the world without the rest of the world demurring at some point.”

Z          “And the rest of the world is becoming restive.”

X          “They are issuing SDR-denominated bonds.”

Z          “And they are selling oil without even acknowledging the Petrodollar.”

. . .

X          “In her novel, the U.S. government confiscates gold and disregards even basic civil liberties while confiscating the yellow stuff.”

Z          “Survey the universe of commentary on the subject and you discover that no one has ever even questioned that the government will confiscate gold when the stuff competes with the fake stuff.”

X          “The people of the United State of Nevada who seceded from the dysfunctional disunion agree that it is ‘dumb’ and ‘arbitrary,’ but they base their currency the ‘Continental’ on the gold standard.”

Z          “She does not see that the government would have eliminated cash of any kind years or decades earlier.”

X          “That is one of the harbingers of great danger.  When the government outlaws or confiscates Au, Ag, Fe, Pb, or even worthless fiat cash, the end of civil rights and civil liberties is near.”

Z          “Or here.”

 . .

[See the e-commentary at “Monitoring The Masses:  The Card And The Chip (January 12, 2015)”, “Brave 1984 Farm:  The Best Of All Possible Worlds (March 19, 2012)” and the e-commentary on the institutional distractions in our society at “Foot Longs and Football (September 2, 2013).”]

Bumper stickers of the week:

G20 > G7; SDR > FRN; World > USA   

In the intermediate run, a Kleptocracy is unsustainable.

USA, FDIC, Or NCUA? LCU? SPCU? (October 19, 2015)

Posted in Bail In, Bailout/Bribe, Banks and Banking System, Boycott Series, Collapse, Credit Unions, Debt/Deficits, Depression, Dollar - World's Reserve Currency, Federal Reserve, Gold, International Finance, Kleptocracy, Money, SDR - Special Drawing Rights, Silver on October 19, 2015 by e-commentary.org

. . .

B          “I want out of the Racket – the stock market Racket.  I want to hold my deferred compensation in the form of dollars, for what they are worth.  As I see it, Treasury Bills and Treasury Bonds are allegedly protected by the ‘full faith and credit’ of the United States.  What is that worth?  When the Big Jolt hits, what is Uncle Sam’s telephone number?  Or e-mail address?  unclesam@unclesam.gov?  A general promise by the Uncle when I have full faith that the credit of the United States is sketchy, provisional and conditional at best.  I won’t touch Treasury Bills or Treasury Bonds.”

C          “Another hollow and worthless promise.  I won’t touch Treasuries and refuse to deposit money in a bank.  The FDIC (Federal Deposit Insurance Corporation) allegedly provides insurance for banks, yet the agency is ‘stressed’ to put it mildly and will not pay all claims in the event of a significant bank run.  The NCUA (National Credit Union Association) allegedly provides insurance for credit unions and may provide some insurance protection for some time for some depositors.  I am willing to make a tentative commitment to the system and keep some of my funds in my Local Credit Union (LCU).”

B          “Depositing a healthy chunk of money in the Sealy Posturepedic Credit Union (SPCU) involves little counterparty risk and allows me to sleep peacefully at night.  When the Big Jolt hits, there will not be enough physical dollars.  Regular folks may accept regular dollars for two related reasons – inertia and habit – until the shock triggers them to do something and change their habits.  Regular folks will accept the few available physical dollars for four or six or eight weeks for transactions as long as other citizens accept dollars for transactions.  Then regular folks will only accept Sacagawea dollars and some coins for a few weeks, although coins like dollars of any kind are in short supply today.  After a few more weeks, some informed folks will accept silver coins minted before 1964 at a premium.”

C          “In the end, the Depression is our guide.  Twelve gauge shot gun shells may be another medium of exchange and twenty-two rounds may be used as change to support the emerging barter economy.  Cash of any kind is the threat to the those who run System.  The government now requires banks to obtain and record the identity of anyone making a cash deposit and are refusing to accept cash for some payments.”

B          “Banks do not need deposits to be able to loan money.  Yet today many banks are offering gimmicks and gewgaws to attract funds that they will be able to retain during a ‘bail in’ without any obligation to the depositor.”

. . .

C          “Junior’s paper route money stored in his piggy bank may be our only available liquid asset.”

B          “She may not stand for us withdrawing some of the Standing Liberty quarters from the collection she has accumulated with her baby sitting money.”

C          “We may need a bushel basket of Wheat Pennies to buy a pocketful of wheat.”

B          “When the banks are maneuvering to avoid a haircut, we may be required to go to our Barbers.”

. . . 

[See the e-commentary at Preserve Cash; Preserve (Some) Privacy (May 4, 2015), “Bail Ins” Are Globalized; “Bail Outs” Are Bailed Back In; No Bail For Bankers (December 29, 2014), Globalizing The Bail In (July 8, 2013), Bailouts: Out; Bail Ins: In; Slowly Boilin’ The Frog (April 15, 2013), Money “In The Bank” Or “Under The Mattress” (October 8, 2012), Boycott Big Banks – Vote Your Dollars (November 21, 2011), and Boycott Big Banks (February 1, 2010).]

Bumper stickers of the week:

The U.S. government is pursuing an international currency war and a domestic war on currency.

SPCU/You > LCU/NCUA > Bank/FDIC > Uncle Sam/FF&C

Prepping: Public And Private Perspectives (April 27, 2015)

Posted in Bail In, Bailout/Bribe, Bankruptcy, Banks and Banking System, Collapse, Debt/Deficits, Depression, Economics, Global Climate Change, Guns, Population, Recession on April 27, 2015 by e-commentary.org

. . .

C          “A system that cannot go on forever will not go on forever.  The System in its current incarnation cannot go on forever.  Thus, the debate shifts fundamentally from ‘if’ to ‘when.’  The syllogism suggests that fundamental change is in store.  Do we have the stores?”

D          “‘When’ not ‘if’ and also ‘what.’  Plan B is by definition less desirable than Plan A or presumably it would be Plan A.  The most desirable plan is failing.  What is Plan B?”

C          “The other systemic challenge is weather.  That problem like the financial machinations is also substantially man-made and man-modified.  Mother Nature allocates every region a specially-tailored natural catastrophe.  Florida and the Southeast get hurricanes, the Midwest gets tornadoes, the West Coast gets earthquakes, other regions get typhoons and cyclones.  And Mother Nature is shifting the script so that some areas get floods and some get drought.  The jet streams and the gulf streams are working in tandem to change things on the ground.”

D          “Leaves you wondering what is Plan B?”

. . .

C          “The script never varies.  The public Emergency Preparedness offices provide detailed lists of necessary supplies and valuable advice yet always unfailingly avoid even hinting that a gun, even one for hunting squirrels or pigeons, is a wise and prudent investment.  Some of them are reluctant even to mention acquiring a knife other than a pocket knife or perhaps a scalpel.”

D          “And the private sector prepper sites go to the other extreme and focus the entire discussion around guns and ammo and ammo and guns and guns and ammo.  The alpha, the bravo, the charlie and the delta of preparation for the Great Omega.”

C          “Get a gun.  We have a moral duty to protect our family and friends.  And get an LED flashlight.  And extra batteries.”

D          “And beans and bullets.  My personal Plan B combines public and private sector suggestions.”

. . .

C          “Going it alone is a failure from the start, yet desperately few humans have the intellectual and emotional software to engage others cooperatively.  Finding others who have resources, skills and tools is not promising.”

D          “At heart, the most prudent preparation is to restrain the dragons in our soul to free our mind.”

. . .

[And this past weekend, earthquakes in Nepal.]

[National PrepareAthon! Day on April 30 is a grassroots campaign for action to increase community preparedness and resilience.]

[See the e-commentary at Beans and Bullets (April 6, 2009), We Ain’t Ants; We Are Grasshoppers (April 9, 2012), On Community (June 3, 2013) and On Roiling And Rolling Collapse (March 9, 2015).]

Bumper stickers of the week:

Get a garden rake, get a gun, get a grip

“If you want to awaken all of humanity, then awaken all of yourself; if you want to eliminate the suffering in the world, then eliminate all that is dark and negative in yourself. Truly, the greatest gift you have to give is that of your own self-transformation.” Attributed by some to Lao Tzu, but who knows.

Interest Rates ‘risin’? (March 30, 2015)

Posted in Bail In, Banks and Banking System, Credit Unions, Debt/Deficits, Federal Reserve, Stock Market on March 30, 2015 by e-commentary.org

. . .

1          “Can they.”

2          “May they.”

1          “Could they.”

2          “Should they.”

. . .

1          “The Federal Reserve cannot allow interest rates to rise because the Federal Government would be obligated to pay staggeringly more interest to service the ever metastasizing National Debt.”

2          “Someone in the Bureaucracy must be sober enough to realize that a rise in rates will trigger profound and devastating economic and financial consequences.  Everyone will need to look up the word ‘derivatives’ in the dictionary.”

1          “I could see the Federal Reserve raising rates by ‘25 basis points,’ as they say, to show that they cannot do nothing.  If they appear effete, they are effete.” 

2          “Even a quarter percent rise may be enough to tip over the economic and financial game.  Perhaps in desperation the Fed can generate real inflation then the Federal Government can pay the interest on the National Debt with deflated dollars . . . which reduces the real cost to the Government.”

1          “The Federal Reserve does what it wants to do, but its primary mandate is to maintain price stability.  Inducing gross price instability is directly contrary to its raison d’etre.  But then, do they care?”

. . .

2          “The dollars may not be worth anything in a few years, yet I will not pay money to store my money in a bank and also risk having my money confiscated by the bank to pay the debts of the bank.”

1          “When they slither from the ZIRP – zero interest rate policy – to the NIRP – negative interest rate policy – and start charging me to keep my deposits in their failing financial institutions, I am tucking all of my money in the Sealy Posturepedic Credit Union.”

. . .  

[See the e-commentary at Money “In The Bank” Or “Under The Mattress” (October 8, 2012).]

Bumper stickers of the week:

Compound interest is described as the greatest invention of the 20th Century, yet it may be the most vexing challenge confronting governments in the 21st Century.

“The first panacea for a mismanaged nation is inflation of the currency; the second is war.  Both bring a temporary prosperity; both bring a permanent ruin.  But both are the refuge of political and economic opportunists.”  Ernest Hemingway, “Notes on the Next War:  A Serious Topical Letter,” Esquire, September 1935

What goes down must go up?

ZIRP (Zero Interest Rate Policy) = Official National Policy . . . for all time?

NIRP (Negative Interest Rate Policy) = the straw that breaks