Exploring Hydrocarbon Depletion
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The Fed decided those damn foreign bastards are getting wise to us, and they have apparently stopped buying our debt, as evidenced by the lack of increases in Foreign Holdings at the Fed, which is down about $4 billion last week. So not only are they not buying MORE of our debt, they are selling some that they already bought! Bummer!
So why are these foreign dirtbags, who speak with funny accents and are not even civilized enough to celebrate Halloween by dressing their kids in weird rags and begging the neighbors for candy, NOT buying more and more of our debt so that we can continue to buy things on the cheap?
He stands there speechless. I stride confidently right up to him until my nose is almost touching his, and you can see that he is getting really nervous that this lunatic is swinging onto the stage at the end of some rope and wearing some stupid cape and is saying "Verily I say unto thee, puny earthling, show me, how the German Weimar hyperinflation would have been prevented if only they had adjusted inflation for quality! Show me how the inflationary problems besetting Latin America for decades could have been prevented if they had only adjusted their crippling inflation for quality! For that matter, show me how the inflation that fomented the French Revolution could have been prevented if they had only adjusted their inflation for quality!"
Seeing that a demonstration is in order, I gently jam my knee into his groin. "Ooof!" he says. Then, when he looks up at me with that look on his face that says "What in the hell did you do THAT for, you imbecile?" I kick him as hard as I can with my foot, also in the groin. "So, now, Mister Smarty-Pants, which one was worse? The first one was a lame effort, and it barely hurt! The second kick in the groin was with all the strength I could muster! The answer is, you must like the hard second kick much better, once you adjust for quality, you little bastard!"
With a struggle I regain control over my raging thoughts, and as I allow the SWAT team to slowly pry my fingers off the triggers, I secretly vow to start taking those yellow pills again instead of spitting them out when my attendants are not looking.
Today's housing bubble is a consequence of policies designed to ameliorate the effects of the bursting of the stock-market bubble.
I am not a believer in conspiracy theories. But the Fed's behavior since the late 1990s is starting to change my mind. It all began with Alan Greenspan's worries over "irrational exuberance" on December 5, 1996, when a surging Dow Jones Industrial Average closed at 6437. The subsequent Fed tightening in March 1997 was aimed not only at the asset bubble itself, but at the impacts such excessive appreciation in equity markets were having on the real economy -- consumers and businesses alike. It was a classic example of the Fed playing the role of the tough guy -- the central bank that, to paraphrase the words of former Chairman William McChesney Martin, "takes away the punchbowl just when the party is getting good." Unfortunately, the tough guys weren't so tough after all. Predictably, there was a huge outcry on Capitol Hill as the Fed took aim on the US stock market. But rather than stay the course as an independent central bank should, the Fed ran for cover in the face of political criticism. Not only were its initial bubble-containment efforts put aside, but Alan Greenspan went on to champion the notion of a sea-change in the macro climate -- a once-in-a-century productivity miracle that would justify the stock market's exuberance as rational. That was the Original Sin that has since been compounded in the years that have followed.
Colorado-Valley wrote:Japan might be in for the same future, though.
Colorado-Valley wrote:But Tokyo, what happens to Japan's economy if the American consumer falls into a bottomless pit, the U.S. government fails and its treasury bonds become worthless?
After all, we now all live in a globalized economy.
Doly wrote:China doesn't look very friendly right now.
The recent events concerning China all suspiciously seem, to me, connected to America's disastrous war in Iraq. America is being defeated militarily and has already lost economically and morally. The Chinese are not stupid and are taking advantage of this situation any way that they can – while avoiding direct confrontation. Witness arms deals to India and oil deals with Iran.
The United States does not like this situation one bit. So the Bush administration is trying to use its dog in Asia, Japan, to keep China in check. And to try to take the American public's attention off of disastrous U.S. Middle Eastern policy.
But it won't work. In the end, China needs Japanese technology and its business network. Japan needs cash and a workforce and a market. When push comes to shove, I believe that Japan will side with China. At the moment, Japan needs to appease the United States. But Japan is not so foolish to risk its future on a sinking America. One day, soon, Japan and China will pull the plug on financing the United States’ red ink. Of course they will. Only a fool couldn't see that America's future is decidedly dim.
"If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered."
- Thomas Jefferson
watchs the tin-hat-o'meter aka the bs meter go off the scale..*
"The individual is handicapped by coming face-to-face with a conspiracy so monstrous he cannot believe it exists."
-J. Edgar Hoover
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