Posts Tagged ‘debt’

The Knave New World

May 2, 2019

In 2007, Alan Greenspan published a fascinating book that chronicled not only his own life, but the life of the monetary world in which he grew up,  and in which he ultimately played a major role as Chairman of the Federal Reserve.

  https://www.amazon.com/Age-Turbulence-Adventures-New-World/dp/0143114166 

Mr. Greenspan’s keen observation of contemporary monetary history is demonstrated throughout the book. On page 92, Alan had this to report about the legendary Reagan tax cuts of the 1980’s:

“The cornerstone of the Reagan tax cuts was a bill that had been proposed by Congressman Jack Kemp and Senator William Roth. It called for a dramatic three-year, 30 percent rollback of taxes on both businesses and individuals and was designed to jolt the economy out of its slump, which was now entering its second year. I (Greenspan) believed that if spending was restrained as much as Reagan proposed, and as long as the Federal Reserve continued to enforce strict control of the money supply, the plan was credible, though it would be a hard sell. This was the consensus of the rest of the economic board as well.

But (David) Stockman (Reagan’s Budget Director) and Don Regan, the incoming treasury secretary, were having doubts. They were leary of the growing federal deficit, already more than $50 billion a year, and they began quietly telling the President he ought to hold off on tax cuts. Instead, they wanted him to try getting Congress to cut spending first, then see whether the resulting savings would allow for tax reductions.”

Well good luck with that!

And gollee, that was about 39 years ago, and about 20 trillion $$ of federal deficit ago. . .

Ronald Reagan, God bless ‘im, was the last of the Mohicans of old-style let’s-try-to-balance-the-budget school.

Yet we still pay lip-service to that principle.

But–let’s face it– those days are gone forever. They went out with with saddle oxfords and gumball machines and  Archie Bunker and 1-cent lollipops and debits on the left with credits on the right that balanced each other out.

Now Reagan, God rest his soul,  is no longer with us, nor Kemp,  and the world is a totally different place. Ronald Reagan was the last of a balancing breed that has vanished into fiscal history.

The cowboy hero has ridden into the sunset.

David Stockman is, however, still with us, and still living in the past,  still harping, God bless ‘im, on old-hat financial and fiscal responsibility. Good luck with that, Dave!

https://www.deepstatedeclassified.com/dsd20190426/

In his most recent newsletter, David Stockman posted this assessment of our present situation:

“The Main Street economy is failing. But the Wall Street fantasy is thriving. You can lay responsibility for this dangerous disconnect at the doorstep of the Eccles Building.

The Federal Reserve’s extreme monetary central planning regime long ago disabled capital markets and destroyed price discovery.

Bubble Finance has euthanized workers and savers and lobotomized traders and speculators.

And our monetary central planners know it.”

While Mr. Stockman’s assessment may very well be true, it may also be irrelevant.

The world . . . as it always does and always has, has changed.

Tap your ruby slippers together, David.

RubySlippers

and close your eyes and realize: We’re not in Kansas any more. All the rules have changed. Take off your rose-colored glasses.

We’re not wheelin’ and dealin’ in ole Wall Street any more, or Peoria or Pittsburgh or Palm Springs. Now we are in, as Aldous Huxley once said, a Brave New World. . .

A world in which monetary markets and price discovery are no longer the primary determinants in the money game. . . a world that has, yes Virginia, yes Alice and yes Dorothy, been commandeered by a thunderous consumerist horde who have no wish to be bound by these old financial fuddy-duddy obsolete principles, a world that has been fundamentally transformed by Keynesian realpolitic and by the pragmatic keep-bailing-this-boat central bankers of the world with their legions of yassah data-crunching technocrats to maintain the welfare of us all.

And we will never go back.

Because money itself is, and always has been, truth be told, worthless, being nothing more than klinky coins that can get you a wad of chewing gum, or paper bills that can get you a sugar-high from a vending machine, or electrons that can get you a charged-up night on the town, or a day in the sun, a week at Disney if you’re lucky, and a health-insured, social-security certified lifetime in this knave new world.

The “Capitalism” of Adam Smith and John Stuart Mill and Jacob Marley and JP Morgan and even Warren Buffet has . . . gone the way of the buffalo.

Now it’s just benevolent electrons whirling around the world taking care of everybody.

And when you finally see the writing on the wall, Dave, look at those deficits and . . . read ‘em and weep. Nobody cares about deficits any more.

The central bankers of the world will never have to face the music of fiscal responsibility that keeps ringing in your ears.

We’re never going back to the old balancing acts. Where we’re headed is. . . everybody gets a meal-ticket as long as all’s quiet on the Western front and the red sun still rises in the east. Welcome to the knave new world.

Glass half-Full

Et tu, Brussels?

October 23, 2018

Of course everybody who goes to Rome brings home mucho pictures. People travel there from all over the world to tour the originating sites of the ancient Empire; then they take a little chunk of early European history home, in the form of photographs.

When we were there, yes, we certainly did do the obligatory tourist ritual of snapping photos of the so-called Imperial City. You’ve probably seen classic images of the Roman ruins, which commemorate the Empire period of two thousand years ago.

But I was most fascinated with a relatively new structure there, Il Vittoriano.

Designed in 1885, inaugurated in 1911, and completed in 1925, this incredible monument makes an absolutely grandiose visual impression when you first catch sight of it.

VitorioB

You can see from this grand edifice that the Italians have never forsaken their proudly imperial self-image.

This morning, however, a Roman venue of a grittier sort—the Circus Maximus— was brought to my attention. In his Seeking Alpha post,

    https://seekingalpha.com/article/4213358-now-circus-maximus?isDirectRoadblock=false

Mark J. Grant used that  ancient racetrack as a metaphor for the  fiscal contest that is now heating up over in Europe.

Here’s what Mark wrote about the presently escalating Continental showdown:

“The new “Circus Maximus” will include all of the European Union and their population of 512 million people. Sit back and enjoy the grand spectacle as Italy has now presented its budget and the European Commission has sent it back. Rome then reacted to Brussels and stood steadfast on the banks of the Tiber and now the overmasters in Brussels and Berlin will hand down judgment, and likely some form of bureaucratic justice, that was not fashioned in Italy, but which Italy is expected to obey.”

The original Circus Maximus, however is just a dirt racetrack.

If you’re a boomer geezer like me, you may remember, from a classic race scene in the 1959 MGM movie, Ben Hur, Charlton Heston heroically outmaneuvering a less-than-honorable competing charioteer, to win the great chariot race.

  BenHur

That scene may or may not have taken place in the Circus Maximus of olden times.

The real Circus Maximus, where those famous chariot races usually took place, wasn’t conducted in the Colosseum. The actual site was really a huge dirt track, located near the Tiber River, beneath Palatine Hill, where Roman emperors and their hobnobbing hoodoo entourages could view the spectacle from an elevated, privileged position. Here’s what the real Circus Maximus looks like now:

CircMax1

Seeking Alpha blogger Mark J. Grant speculates figuratively on how the present European budgetary shootout at the Circus corral may turn out:

“The European Commission will likely wield the big stick. This is initiating its so-called ‘Excessive Deficit Procedure.’ This process has never been used before and will likely be tortuous for both Italy and the European Union. Fines have never been applied to any country, with previous breaches by France and Germany overlooked, and yet, there is always a first time.”

If Mark J Grant’s racetrack metaphor is indeed indicative of the present European Contest, we’ll see in the days ahead whether Italy’s impudent leaders can prevail in their fiscal rebellion, or whether they will go down with classic mutterings of “. . . et tu, Brussels?”

Smoke

DeepState DeepThroat DeepSh*t

February 3, 2018

I suppose the concept of Deep State started with George Orwell. In his fictional explorations of early 20th-century dystopia, 1984 and Animal House, Uncle George presented the scenario of a so-called Big Brother government that wanted to control just about everything, including not only what people do, but also what they think.

Orwell’s real world of the 1930’s certainly presented a dramatic scenario of escalating DeepState dysfunction. Two gargantuan opposing dictatorships were challenging each other over the question of which one would control the world.

The Nazis, who had wrested control of the German gov. machine, had effectively set up a dictatorship of one man, Hitler. He turned out to be a personification of DeepMad. In other words, he was so mad at the world that he desperately wanted to find someone to blame for all the DeepSh*t. He blamed it all on the Jews and the Communists.

The truth is, however, this. We have found the enemy, and he is us.

All of us. But as I was sayin’. . .

Meanwhile, back at the northern climes, the Soviets were setting up a dictatorship of the proletariat, even though their founding dictator was dead; Karl Marx had dictated the idea that working folks could manhandle the world away from all the rich fuddyduddy lords and ladies who had been running it for so long, and everybody knew that certainly the proletariat could do a better job of running the show.

Now that’s an idea whose time has come, the arc of history and all that. Or so they thought . . .

In the ’30’s the whole damned world was torn apart when the Dictatorship of Hitler tangled with the Dictatorship of the Proletariat. Oh, and there was a third one—the Dictatorship of an Emperor—Hirohito in Japan, not to mention Mussolini and his goons. Between these four, they pretty much dragged the whole damned world down into a fricking apocalypse preview. Unlike wars of old, such as was conducted by the ancient Greeks v Persians, or David v Goliath, or old dusty militarized monarchs of Europe sending their clueless vassals out to perish, the 20th-century version of warfare was exponentially more destructive than the carnage inflicted by men of old, wielding their legendary sabres and muskets and cannons and those old-school versions of techno-destruction.

Well, by ‘n by, we Allies managed, through much blood and toil and sweat, to put an end to all that dictatorial bullsh*t.

IwoJima

It was no easy job, but we collectively mopped it up in the late ‘40s, ’50s and thereafter.

StalnDown2

But that was just one small historical step, as it turned out, in all the blood, sweat and tears that was yet to come.

CastrNixn

Now understand this: there’s always a lot more deep stuff going on than we, in our pea-brains, can fathom. That said . . .

By ’n by, a new generation comes along and now all these kids still wet behind the ears are growing up with a TV in the living room, and they’re watching the world through the lens of Edward R. Murrow and Eisenhower and Kennedy and Cronkite et al, and by the time the baby boomers get out and about where they don’t have the restraints of mom and dad tellin’ them what to do all the time—in other words, college—by that time, they had figured out that they knew enough about the world to change it—the world, that is—(haha!). And so they got out in the streets and made a big mess of things until finally Nixon got the message and brought the boys home.

Well, by the time the boys came marchin’ home again hoorah hoorah—this was early ’70’s—the DeepState had gotten the idea that Nixon was a brick or two shy of a load, and so they set out to show him a thing or two by pressing the delete button on his power trip.

And this is how it happened:

That whole protest wave that so confounded Johnson and Nixon—it wasn’t just about the war. No, it was about much more than that. It was supposedly about free love and maybe some free pot and maybe even free food, as the diggers had been trying to do out in San Francisco.

Meanwhile, back at the ranch, there was a lot going on in America behind the scenes.

That free love thing, you see,  wasn’t really so simple as just shackin’ up; it was also about getting kinky. So when  the reporters who broke the DeepState Watergate dam—Woodward and Bernstein— devised a pseudonym for their DeepState informant, they came up with the nomen DeepThroat.

This development, which attempted to document the infernal workings of unbridled unjustified politics in the white house, was thereby associated in the public mind with the kinky side of the sexual revolution, as represented by the porno movie of the same name which was inspired by a nymph who had turned kinky because she used her mouth for sexual purposes and they called it DeepThroat.

Hence, DeepState, DeepThroat. There’s always a lot more deep stuff going on than we, in our pea-brains, can fathom.

What the Americans did not understand was that the whole DeepState, DeepThroat thing was slowly devolving us into a pit of moral, political and economic depth beyond our ability to rectify all the deep troubles associated with same.

Now since that time, our preoccupation with all this dysfunctional politics and sex has sunk us deeper into political and sexual irresponsibility. This dystrophy has, along the way, blinded us to authentic responsibility, and ultimately imprisoned us in a yet another very deep quagmire. Yeah, I say unto thee, ’tis yet another pothole of even deeper dysfunctional distress:

DeepDebt, trillions and trillions of it.

Nevertheless, in spite of all that, ya gotta find a ray of hope somewhere. I don’t know about you, but my prescription for our dystopian dillemma is quite simple, maybe even simpleminded:

God bless America.

And if you believe that, I’ve got some deep canyon real estate in Arizona I’ll tell you.

What’s better is: In God we Trust. But with all the deep sh*t that’s going on, such blessing and trusting could require a higher power for the fulfillment part of it, and maybe even some DeepFaith.

  King of Soul

Yes, Toto, we’re in a brave new swirl.

January 28, 2018

Today while perusing a post on the Seeking Alpha financial network I came across what appears to be a very sensible explanation of what we see in the world of finance and business today.

This no-nonsense analysis is occasionally echoed by other writers on the SA site, most notably Mr. David Stockman, former budget director for President Reagan.

He was a high-flyer back in the day, the pre-Greenspan days.

But here I make reference to a different contrarian analyst, Mark A. Grant,  upon whose article I stumbled upon this morning.

  https://seekingalpha.com/article/4140703-universe-edge-restaurant?sht=p3a1ld&shu=8wcf#comment-77507865

From a distance, I’ve been following the contrarian school of thought ever since the fall of ’08. I say “from a distance” because I am neither an economist, nor a significant investor. I am a mere citizen who happens to be a consumer, an American, an author and a semi-retired person, age 66.

This contrarian school of alarmist financial analysis generally demonstrates a perpetual amazement; their astonishment revolves around the credit-mongering house-of-cards built by the central bankers of our preset world (the Fed, EuroCBank, Bank of Japan, People’s Bank of Japan, etc.). It’s not that the contrarians have much respect for of the central bankers’ delicate arrangement of interlocking currencies and trade incentives; rather, their astonishment arises from the mystery of why it has not yet fallen apart and produced a new crash.

You see, this new international construct is not founded upon traditional economics, but rather (as it appears to this layman) upon that (at the time) new-kid-on-the-block upstart school founded in the 1930’s by Mr. Keynes; it’s all about governments and banks perpetually tweaking national/international money spigots to produce certain desired effects.

Our current zombified house-of-cards scenario has been at work for a decade or so now, ever since the crash of ’08, with its aftermath of Great Recession or great whatever-it-is.

Getting back to the source of this present article: This morning I was reading Mr. Grant’s take on the present situation and comparing it for the umpteenth time to the contrarian undertow that continues to make perfect sense. This bearish complaint corner has been going on for so long I’m beginning to wonder if the fiat-wielding central bankers have actually managed to change, by their manipulations, the fundamental nature of money.

Maybe we actually are now in a brave new world where the old rules of debit/credit will never again apply.

With all these electrons flying around the planet–all these monetized digital representations of presumed wealth and bank-enabled assets–haven’t we truly ditched the old gold-backed world of currencies-dollars, pounds, francs, marks, drachmas, denarii, Euros, rubles, shekels, yen, yuan, SDRs and zlotys?

Could Bitcoin and such be nothing more than a flash-in-pan death-throes sparkle signifying the end of our great age of post-BrettonWoods expansion? 

Might this extended wave of central banks’ Quantitative Easing actually turn out to be the debt-driven tidal wave that propels us into a land that prime forgot, where all the rules and practices of days gone by are tossed aside forever in the liquidity flood and trash heap of history?

ShipWrek

We’re getting to a precarious place now where the only solution will be to tear up the score-cards, balance sheets, and start over. The central governments of the world are forever indebted to the central banks of the world. It certainly seems that way to this observer. I’ll be surprised if we ever get back to what Mr. Smith called “the wealth of nations.”

We ain’t in Kansas any more, Toto. Exactly where we have landed is unclear. And it just might be that tapping our ruby-slippered heels of old-school analysis are gone with the wind.

When this whirlwind of fiat-instruments does wind down to a dull roar and all the chips fall where they may, who/what institutional entities  will have wrangled control of the new asset-spewing beast? Whatever that entity turns out to be–it (they) will be in a position to dole out the newly-zombified assets to the world’s surviving movers and shakers. I guess most of us out here in lala land will be quakin’ in our boots.

As for us commoners, we may all of us have to settle for a mere meal-ticket while the big chips get re-assigned.

A meal-ticket  on a card or a chip, of course.

What troubles me is: what new rules or allegiances will be demanded by the powers–that-be?

What will it cost us, John Doe/Jane Smith, to even get in the game?

King of Soul

Kick the can down the cliff

December 29, 2012

“Kick the can off the cliff;

swipe your card cuz what’s the diff?

Find a hole and dump your load;

Kick your bucket down the road.”

Get your kicks.

 

This is what cousin vinny said

before he odeed and woke up dead.

Then he sent a postcard from hell;

what he said I’ll never tell.

Well maybe.

 

He said he’d just as soon take a dive;

to preserve his image of cook and jive,

but then his jig was up too soon;

he cooked it up in a dirty spoon.

Y’know what I’m sayin?

 

It all started back on the road,

when jack left home and kissed a toad,

but then it pricked us in the back

and sank our mission in lake kerooac.

Cool!

 

That beat all I ever seen,

to shuck the buck and shoot up the dream;

’til along came a slicker hack;

he sat on a candlestick, that newer jack.

Far out!

 

“Steal this book. Question everything.

Forget  the picket fence; have a fling.

One pill makes you larger; one makes you small.”

Now the folks who paid the bills

won’t do anything at all.

Stall.

 

Kick the can down the cliff.

Snort some plastic and take a whiff.

We be high, but now we broke

since we went upstairs and had a smoke.

Fugedabodit.

 

I read the news today oh boy

lady gogo got a new toy,

and some whacko shot us, news at eleven:

forget about heaven.

Happy new year.

Glass Chimera

 

 

 

 

 

Spare change?

July 14, 2012

Flip a nickel; turn a dime.

Let’s spend our money one more time.

And when it passes twice again around,

we hear its jingle-jangle sound.

We go to town.

 

Spend a dollar; pass a buck.

Buy another pickup truck.

Pump some gas and drive a mile,

shine it up and drive in style

for a while.

 

Scan my plastic; pass my card;

software data, currency hard.

At end of month the bill comes due.

I’ll pay a lot and then a few.

What’s it to you?

 

Build a country; churn the economy.

Fuel the industry; grow some agronomy.

Dems want gov to do it all;

Repubs want private sector out of the stall.

That’s all.

Not quite.

 

Tea Parties cry don’t tread on me

while Occupyers want everything made free.

Get outa my way vs. soak it to the one percent:

two polarizing passions that won’t relent.

But uh oh; it’s time to pay the rent.

 

It happens every month; it comes around every year,

with principal and interest so steep, so dear.

At midnight our stimulus turns into a pumpkin.

But I’m no bumpkin: I’ll spend a dollar; I’ll turn a buck;

‘though our limo has morphed to a clunky pumpkin truck.

We’ve stayed too long at the ball.

That’s all.

Glass Chimera

Trouble

December 17, 2011

Trouble I’m scared
of what gonna happen
Just give me democracy
I want it now
not aristocracy
cant handle no meritocracy
gotta slide to mediocrity
gotta save my middle classity
keep my couch potata rutabaga raava
dis the inequality
cant balance the frugality
cant handle no fragility
cant locate my ability
dam the ram idolotry
I’m crying for veracity
but findin  volatility
Just give me liberty
or give me debt–
debtitudinal longitudinal polarizational globalizational hesitational
notional value unfathomable oceanal
debt!
need seratonin give me oxytocin
with comfort  lotion potion notion ocean
no emphatic static
no radical shmadicals
to hell with chaos pathos loss and dross.
I see a cross.
Forgive them.

Pandemic bailout blues

October 6, 2011

Michael Shulman posted some seriously insightful analysis on Seeking Alpha today, and it set me to thinking. But before I tell you about my molehill thoughts, I’ll tell you about his mountainous observations. He wrote:

“If Greece defaults – they will, next year – most European banks, including the Germans, will take a huge hit on their balance sheets and will need to raise capital, which will not be available from private investors so they will need to be bailed out. This will anger taxpayers more than bailing out those wayward Greeks. So, to date, the politicians have put off the inevitable, more money for the banks.”

Sound familiar?
This is just the sort of bailout with which our government set its regrettable precedent back in 2008, after the Lehman/BearStearns/AIG et al collapse and/or we’ll-never-know-how near collapse. Although our present Treasury Secretary, Mr. Geithner, implies this week that European debt problems could lead to negative repercussions here in the good ole USA , in fact we are merely facing the boomeranged consequences that we ourselves set in motion (haha) with our frantic escape from shredded red-ink bank balance sheets, through taxpayer-fueled faux liquidity, three years ago.

Today in the USA, all those angst-ridden “occupy wall street” people out in the streets, along with their democratic sympathisizers and labor union manipulators–they’re clueless about the fundamental issues here–the long-wave cycle of economic expansion/contraction and the inevitable conflicts of wage differentiation between developED and developING naions. They’re failing to appreciate their own heretofore high-flying lifestyles , which have been enabled by fat-n-happy debt-fueled free-lunch bubblebath corporate-couched, union-padded opulent prosperity.

And so, now that the party’s over and the punch bowl has run dry, they’re out in the streets, pawns in the game instead of being free-will mainstreet initiators, wanting to pull down the “greedy capitalist” powers that be, mainly because they have nothing else to do since they’re unemployed, or horror of horrors, underemployed. They’ve had all they can take of the Would you like the combo with that BigMac, sir? blahblah.

This month, the Occupiers will be be further empowered by news from across the pond, angsty tidings from their wobbly European comrades who are now being given an excuse to take to the streets. After all, the Europeans, especially les Francais, are old hands at this. The Germans and French doppelganging crowd will be charged up because their resources are being diverted to bail out the too-big-to-fail bourgeois financiers who have carried the Greeks, who’ve been retiring early and consuming ambrosia and soaking up euro-drachmas in their Mediterranean sunshine.

What’s lamentable is that in the midst of all this, Steve Jobs passes on to that great apple grotto in the sky. Now, due to the thick veil of media mourning and igadget reminiscing, we’ll be caught up into the cloud and never know what kind of deal really will have gone down this coming weekend. Since the neutrinos in Cern have been clocked at a speed faster than the speed of light, Steve’s visionary past will eclipse our hyper-leveraged future, even as his foresight had earlier overshadowed Microsoft’s (and everybody else’s) present debt-fogged windows on the world.

Soon we’ll have another Western ideology identity struggle on our hands. But this time it won’t be between Apple and Microsoft; it won’t pit Ford against Chevy. This time, the battle will be waged between the liberté egalité fraternité mob and the life, liberty and pursuit of happiness militia.

I’m headin’for the hills; actually, I’m already there.

Glass Chimera

S&P wake-up call

August 8, 2011

Numerous talking heads have been pontificating so plentifully today and yesterday about that despicable ratings agency–the one that dropped the ball back in ’08– Standard & Poor’s.

So many opinionators were covering the wide palette of artful euphemism, expressing their studied opinions– from the subtlest nuance of implicit complaint, to damn-near explicit accusation–that poor S&P is responsible for this raveling mess we’re in.

What the wise commentators should have been saying is: Thank you, S&P for the wake-up call.

‘Tis not the despised downgrade that investors truly fear; ’tis not the dreaded double-dip. What investors are desperately trying to sidestep with their frantic sell-off is nothing so trivially symptomatic as all that statistical stuff.

They simply want to lose as little “money” as possible. Can’t blame them for that. They’re investors, for crying out loud, not talking heads.

I will utter what the President and so many others were unwilling to express today: Thank you, Standard & Poor’s, for the wake-up call. Its about time someboday called a spade a spade.

America, wake up! It’s time to get busy, and pull ourselves out of this debt hole we’ve dug ourselves into. It is obvious that Congress can’t pull us out out, and the President’s comments are helpful, but. . .

Its up to us, individually and collectively. What have YOU done today to improve this life for yourself, your family, your community, your country?

CR, with new novel, Smoke, in progress, which begins on Tottenham Court Road in London