Posted on 04/07/2010 6:05:55 AM PDT by blam
Wrong.
Great POST!
By Bill Bonner
04/06/10 Baltimore, Maryland – No matter how absurd things get, they can always become more absurd.
“Summers: US nears ‘escape velocity’
That’s the headline on the weekend Financial Times.
Summers is jubilant. He got the latest employment figures on Friday. They tell the story of an economy that he thinks is headed into outer space, with 162,000 new jobs created in March. Hallelujah…all this intervention by the feds is paying off! Thank God Summers was on the job. If he hadn’t been…well, the economy would have had to get along on its own…right here on planet earth…just like it did for all those centuries up until the feds got control of it during the Great Depression (or shortly after).
Heck, you know how terrible it was back then. People would go broke… Speculators. Bankers. Promoters. They would be wiped out. Jobs would be lost. Businesses would go bankrupt. And then, a few months later, they’d have to get back on their feet…begging, borrowing, or stealing enough capital to make a fresh start.
But now things are different. Now, we have a better world, designed in part, by Mr. Summers himself. Now, people don’t go broke. Well, at least, major campaign contributors don’t go broke. They get bailed out. They stay in business. The feds give them money so they can keep doing what they did before. And then, the feds put a booster rocket under the whole economy…
[snip]
its all on purpose
Just picture the stock market as a slot machine with a progressive jackpot. The jackpot keeps going up and up and will hit over 11000 pts. But, eventually some lucky player is going to pull the lever and cash out. All the other sorry suckers are going to be left feeding the machine.
Thanks for the ping!
I wonder how many of the non-census jobs (apprx. 110K) were due to govt construction projects starting up, road repair etc.?
Now, people don’t go broke. Well, at least, major campaign contributors don’t go broke. They get bailed out. They stay in business.
Failure was always the greatest regulator. The businesses that were "too big to fail" should have been broken up.
“I wonder how many of the non-census jobs (apprx. 110K) were due to govt construction projects starting up, road repair etc.?”
39,000 others were state & federal government jobs. NOT stimulus jobs. You need to factor those in as well.
What's wrong with this picture?
Don’t blame that on the American Public!!!
Do you see a bubble too?
Chris Matthews says you shouldnt use the regime word, only he can do that.
Very good from Bill Bonner
LLS
I feel vindicated just reading this excellent analysis.
He is so right in his statement that what comes will come, but we just don’t know when. This is the process that makes the uninformed say “he is a permabear, of course he will eventually be right after warning of doom and gloom forever”. I see this time and again here, with people discounting correct predictions that simply can’t be timed.
As far as his analysis, it sounds right on to me. I am not bying this “recovery”. Not at all. The fundamentals are still terrible. I don’t see any fundamental reason for renewed. We are still buried in public and private debt. All that has happened is that a huge piece of private debt was absorbed by the US Central Government, making it public debt. It didn’t go away - it was just transfered. That, and the Obama administration is aggressively adding to the debt above and beyond this transfer from private to public debt.
It is hard not to feel we are doomed. I am not convinced Bernanke will allow a default of debt rather than risk hyperinflation. I’m sure he will risk hyperinflation, thinking he can cut the liquidity in time to prevent it.
I have no clue where we are going from here, but we are not in a recovery. Not even close. It remains to be seen if the government can inflate a new bubble with green jobs or alternate fuels or something. I don’t think so. I think the Japanese style lost decade or two is much more likely than a recovery or a new bubble.
I guess we’ll see. This is not going to be pretty.
The original article for this thread and the link you posted come to 2 different conclusions.
The original post claims that governments choose to default on debt rather than risk hyperinflation, so too with the USA.
The article at the link claimst that governments choose to weaken the currency to inflate out of debt, so too with the USA.
This is the $64,000 question that points to whether we ultimately inflate or deflate. Maybe gold is useful in both instances, but otherwise there is no way to prepare for both and the investment strategy for one will kill you if you get the other. If you buy 3 investment properties and get default/deflation and a lost 2 decades, you have depreciating properties that rent for less and less. If you avoid a penny of debt and put all of your money in the bank and get high inflation, you have worthless cash that now buys a fraction of the hard assets you could previously have owned.
I am still a confusionista with no clue how this pans out, and anybody who feels they know the unknowable is kidding themselves. I am still leaning toward currency devaluation and high inflation and possible hyperinflation. That is what I see the government doing. Their current policies are certainly not indicative of a stronger currency.
Who knows? This is going to hurt either way.
We live in interesting times. A lot of people are getting a 1st class education in the dangers of debt.
Yup...me too.
I'm preparing for inflation. It will come at some point.
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