Comments on: Bring on the doomers

By: matt

matt — Tue, 18 Aug 2009 23:43:15 +0000

Back to the bond market,
I am still trying to get my
head around your Fed purchasing
its own debt. I am still cant work out
how this works, anyone? Now, if they cant sell
it on the bond market, obviously the
coupon rate is too low or the risk
that the bond cannot be redeemed is too great.
Or perhaps there is only so much ‘money’ to
go around. That is the global pot of money
is drying up.
Perhaps to fund the recovery and actually sell
bonds on the open market, the bond yield
will need to rise to attract investment this will
affect the cash rate and therefore interest charges on mortgages.
Just what you guys need – interest rates to rise.
The problem is of course too much leverage can create
its own feedback loop into oblivion – ’vortex’.
(Nothing wrong with toilets at least they produce something!:) )
The fact that the Fed is having trouble trying
to sell its own debt should in theory undermine
future investment in the bond market. What are the
bonds really worth? What is true value of the currency?
Put simply, at the end of the day the US is living beyond its means.
Too much borrowing, too much reliance on the bond market.
(this is easy to do given the US dollar is the worlds reserve currency.)
Your standard of living will require some serious readjustment.
You simply don’t produce enough stuff of any value (exports),
that can fund your lifestyle. The de valuing of the currency would
be a boon to exporters.
Bit off topic-
There is a cultural theme going on – the right wing media are looking for
scapegoats , somewhat typically theatrical and conspiratorial in nature – ie ‘the president is a socialist’!; bankers (goldman sachs – jewish! shock horror!) are tentacle wielding blood sucking leviathans; etc the shrill of paranoia is no greater than what is witnessed on Michael Ruppert’s website. I am reminded of what Reagan said many years ago, to roughly paraphrase ‘the role of government is to get out of the way’ to much applause. The legacy of which is a massive amount of governmental under regulation, and as a consequence corporations having too much power and control over the political process. Bankers are not blood sucking leviathans, they are simply there to make money for their stock holders. Without some form of competent regulatory authority they will perform this task very well or extremely poorly.
And from JHK on Monday -
‘All we can do now is give cars away, or give US citizens free money to buy them — which we are obviously already doing with “Cash for Clunkers” — which is additionally hilarious in the same nation that is deeply paranoid about the government giving anybody free health care. What a nation of morons we have become.’
Nice one Jim.

By: Stan Moore

Stan Moore — Tue, 18 Aug 2009 13:59:26 +0000

Vortex Forming Now
It takes just a few seconds to flush a toilet and watch the vortex form from gravity (weight of the water), then enhanced as a siphon is formed by the engineering of the interior passageways of the fixture, and then the whole contents of the bowl is evacuated down the sewer system.
It takes longer for a nation or a society to form a vortex, but it can and does happen, and I see it happening now.
When the State of California cannot keep its employees working every day of the month for its inability to pay them, a vortex is being formed. The same is true of the City of Chicago, which closed its facilities yesterday and left its employees off involuntarily without pay.
All those employees are typical Americans, in debt up to their ears and with scanty savings or “wiggle room” in case their income stream falters. Millions of formerly productive citizens are already out of work and not contributing to the economy by blind consumption. The hardware stores and the malls and the electronics stores and the auto sales lots and the malls are largely empty as consumption is curtailed. The vortex continues to form.
The lack of consumption builds on the vortex formed by gravity. People by the millions are on the edge of job loss, homelessness, despair. Fear is increasing throughout the society even as the president tries to reassure all that we are just about to “turn the corner” and return to normal.
But it is too late to say that. The trip lever on the toilet tank has already been depressed and the gravity of economic negativity is unstoppable now. The vortex is forming, but it takes a while to increase its power to the point of evacuating the bowl. But the process is underway. The New Millenium is fast shaping up to be far different than most people expected. The year 2000 seems like a distant memory already and the engineering of disaster, including the “War on Terror” is all part of a scheme to advantage some and disadvantage others.
Soon it will feel like “each man/woman for himself/herself” and survival itself will be at stake for the masses.
Flush…

By: Frank Mezek

Frank Mezek — Mon, 17 Aug 2009 17:02:54 +0000

I’m so proud of my part in bringing Prof Em Guy the international acclaim and fame that he so richly deserves.
Bask in his reflected glory ye lesser minions !!!
Frank

By: Guy R McPherson

Guy R McPherson — Mon, 17 Aug 2009 01:50:36 +0000

Wendy, if your comment is aimed at me, the answer is a resounding, "Yes." I felt like I was standing in front of the tanks in Tiananmen Square every day for about 10 years until I retired. Now that I'm no threat to the empire or the university, I no longer feel so alone. Too bad it took so long for me to make it into the real news. I could have used this prestige earlier. Thanks to Frank Mezek for sending me the link.

By: Stan Moore

Stan Moore — Sat, 15 Aug 2009 13:47:47 +0000

the following may be slightly off-topic, but a new essay by Greg Palast shows how Obama facilitates his bamboozlement of the masses with sweetness instead of Cheney-esque scowls. The setting is “health care reform” and Palast looks at the numbers. Amazingly, Obama supporters continue to take succor in the symbolism of the color of his skin rather than in the actual workings of his administration:
see: http://www.dissidentvoice.org/2009/08/obama-on-drugs-98-cheney
Stan Moore

By: Daphne

Daphne — Sat, 15 Aug 2009 04:27:07 +0000

I’ve just finished reading Richard Heinberg’s ‘Powerdown’ which I highly recommend but it doesn’t make for happy reading. As he published in 2004 it’s interesting to see how events have evolved to match (mostly) his predictions. The US administration is clearly mired in the’Last Man Standing’ scenario, although with this healthcare debacle there I don’t rate Obama’s chances much for a long and happy future. Living here in New Zealand, we feel mainly very lucky, but our new National (aka neo-con)Government and general populous blindly follow every (daft) European and American fad, like a little cousin desperately trying to be like the big boys going on ahead, which is deeply disturbing.
Well Guy, watching the unravelling of the global industrial/consumerist fiasco,I’m proud to be a ‘doomer’ too, but with school age children we still have maintain some vestige of optimism for the future.

By: Wendy

Wendy — Fri, 14 Aug 2009 13:42:09 +0000

Matt, you said it yourself:
1)”Buying your own bonds is much much worse, this is akin to printing money.” Right. That’s what the U.S. Federal Gov is doing – printing money with nothing to back it. We are so deep in debt we’ll never see daylight again, and to cover it we’re going deeper.
2)”Clearly you have the money to reform the healthcare system.” Clearly we DON’T, as shown by (1).
And whether we have the money to do it or not, the question in the minds of the American people is, is this plan a good one, or are we going from the frying pan into the fire?

By: matt

matt — Fri, 14 Aug 2009 02:49:52 +0000

the media subverts reason (x 10 in the US)
2 bit punditry-
China’s corporate profits are down 30%,
their share market is up 80% – what the?
Their economists believe the market is overvalued by
50-100%. They have officially created a bubble.
When it bursts domestic spending will
plummet, Chinese will probably seek to
redeem their US bonds and plough the money into
domestic infrastructure projects to stimulate the local
economy.
(I have not read the above links – excuse the repetition)
The fed buying its own bonds is no surprise
this was alluded to several posts ago.
The problem is of course that the bond/treasure note
is only worth what some one else is willing to pay
for it. Purchasing it yourself inflates the value
of the currency. Perhaps the fed is shit scared of
inflation, ie the fear of the rising cost of imports
if the currency continues to devalue/slide.
Personally I think this fear is over stated, let the
currency slide, the purchasing of imported goods
is typically discretionary. Buying you own bonds
is much much worse, this is akin to printing money.
Anyway, Obama is being accused of being a socialist,
because essentially he does not want to see people
left bankrupt through medical expenses or worse
dying because they have insufficient funds. The nature
of your media and how you are held hostage by
such ideological nonsense is bewildering to the
casual observer over here. Your military budget
is equal to the combined military budgets
of the rest of the world. Clearly you have
the money to reform the healthcare system.
Whats going own?
‘But a Gallup poll published on Wednesday found opinions on health care had not significantly shifted over the past three weeks, with 49 per cent saying they disapproved of his desire to introduce health-care reform and 43 per cent approving.’ the guardian
seriously what gives?

By: Charlene

Charlene — Thu, 13 Aug 2009 21:31:37 +0000

Most people are not in a position to do much other than accept and try to get along. I guess that isn’t as sexy as a revolution, but most people simply aren’t.
Somewhere in the mix, there are good people among the rats. Given the crap-shoot that is daily living the good will suffer right along with the bad. The thing that makes me calm about the entire situation is that 1) in the end, things work out the way they were intended 2) there will always be some amount of good present–no matter how small it may be.
I could rip my hair out worrying over things I cannot hope to control, or I can look to the future ready to do what is necessary whether the weather is fair or foul.
Since I like having hair on my head, I think you know what option I’ve chosen.

By: Frank Mezek

Frank Mezek — Thu, 13 Aug 2009 15:21:52 +0000

Big Brother James:
Naw–like a good Burgundy,you get better with age.
Frank