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Friday, December 16. 2011
ZeroHedge posted an article that lists 50 crazy facts about the US Economy. It is pretty impressive how this economy has been 'recovering' for so long, and yet these facts exist. Did I say impressive? My bad.
One of the 50:
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Soon, nobody to pay for this. Currently, loans from the Chinese.
We have a debt of around 15 Trillion dollars. Of that, the Chinese hold somewhere around 1.5 Trillion. While that's bad enough, it's a little less than a TARP and a Stimulus.
The proverbial you and I hold the majority of the debt, not the Chinese.
True enough. The reality is the Fed actually owns the most US debt.
They have purchased massive amounts of it from investment banks to shore up reserves.
The primary objective of any bureaucrat is to keep their jobs. They do this very well.
They give money to as many people as possible, making sure that they keep controlling who gets the benefits. This gives them power and control.
They take money from those who typically do not complain.
They make productive people feel guilty if they do not give away enough of their hard-earned money.
They continuously expand their grasp with regulations, red-tape and taxes.
They invent new panics so that they can expand their domains over more people.
We need to say STOP.
Unfortunately, desperate people turn to, not away from, the government.
American teachers have done a good job of failing to teach critical thinking, so most Americans have no understanding of causality in general, and economic causality in particular.
Wish I could be more optimistic.
If the schools would teach the 'undistributed middle' many a scoundrel would soon be out of public office, booted by the gift of gab.
Zero Hedge is a schizoids dream. One can find whatever one wishes to find there.
As example, that list of fifty.
Perfect fodder for any reader of any persuasion. Bullet points for stasis, and progressives too. Though I don't think that was the author's intent.
Actually, aside from the comments, and a few of the regular contributors, which are heavily tainted with conspiracy, ZeroHedge is one of the very best pro-market and informational sites on Wall Street.
The editors, like Maggie's, allow varying points of view to be aired. There is, however, a preponderance of pro-market viewpoints posted.
The 50 points were apropos of nothing, just indicative of how an economy has become completely dislocated and confusing. I don't think the author was trying to say anything except that, if you seek regular and easily definable data that makes sense then you will be disappointed.
One of ZeroHedge's main points is that technical data is useful, but misleading in this market. Example: the S&P goes up 15 points, but volume is down or flat. Usually a healthy rising market will have heavy volume.
Another is that bond auctions have been coming up short, only to be 'saved' at the last second by some kind of heavy purchasing, which we will presume is the Fed stepping in by providing funds to bank acting as a beard. This auction may be followed on by stock market activity which makes no sense given the state of investment in bonds.
As a result, we are left with a government and media seeking anything to hang a hat on. Yesterday, core inflation exceeded expectations (.2% growth or 2.5% annualized). Normally, this is what the government and media focus on to justify their heavy monetary stimulus, because energy and food would be rising too quickly while core inflation was weak). As a result, what does the government and media do? They point out that energy and food was DOWN last month - justifying their monetary stimulus. Basically, it doesn't matter what the information is, as long as they can pick a portion which suits their needs. Nevermind that overall inflation (year over year) is at 6% and rising.
This kind of data dislocation and misinformation is making further decision-making and directional analysis difficult for many who believe the government can 'guide' the economy.
The government can't 'guide' the economy, and this is frustrating for them. And it is this very point which ZeroHedge revels in.
Denninger lets loose:
(open quote, using only a small part of his bolding)
Note that this does not mean you can't argue for justice. Justice occurs when you borrow money and can't pay -- you go bankrupt and lose your "stuff" and your credit rating. But it also means that the person who loaned the money loses his or her investment at the same time. That is justice -- not getting a "free house" or "free education" because you "deserve" it.
It is the latter half of the check and balance found in justice that hasn't happened. It is the frauds involved in making bogus loans, securitizing bogus loans and lying about them, then knowingly selling crap labeled as "Grade A Chocolate", cost-shifting in the medical system and exempting student loans from bankruptcy that has led to these problems. Private banks put all this crap together and lobbied for it, getting the ability to steal from the common man in the process because people demanded "free stuff" and to get it government had to deficit spend. That in turn resulted in the ability to cover up the economic rot caused by offshoring your jobs and destroying our economy -- for a while.
The limits of that cycle have been reached. It thus now will end, not because someone wants it to or doesn't, but because the math mandates that it cannot continue.
If you continue to press for this destructive cycle to continue the damage that will be done our nation, to you, to your children and grandchildren will go up exponentially. That damage may reach the level of government and civil society collapse, and if it does odds are that what comes out the other side is much worse than what we have now in terms of corruption and loss of freedom.
In short, we have to be adults and cut that crap out -- right now.
So read the question above, debate it and then answer it. Do so in your General Assemblies, on your mailing lists, in your public pronouncements.
A few points may mean less than they seem to mean.
48% of Americans have a low income -- by a definition that is distinctly arbitrary. A family at the lower end of the third quintile can get along pretty comfortably. I have an income smack in the middle and I've had a little good fortune to help -- I have a largish home, run three older cars, have two younglings in college, and still save a little.
48% of households receive at least some benefits: this may reflect the aging of the population more than any other single element. We have fewer new families and more older families who receive Medicare and Social Security. Not saying it's sustainable -- as it stands, it isn't -- but it's being driven largely by demographics that changed rapidly and can't change back as rapidly.
And some of the other stats have comparable possibilities.
You'll get no argument from me.
I've actually had a drop in income over the last 15 years and I'm still very well off.
But the data is "meaningful" insofar as it puts many things in perspective.