Command economy stinks. So Obama has issued one economy crushing command after another. There are 242 new pages of rules and notices coming out of the bureaus in Washington DC every working day.
Regulation can crumble an economy.
Why does Obama continue to lie and say his "Stimulus" has made the country recover. It hasn't recovered yet. Obama's own lackeys says unemployment will rise by year's end.
~~~~~~~~
Obama's debt adds to the problem? Even Rasmussen knows it.
"The Congressional Budget Office (CBO) yesterday reported that the federal budget deficit is projected to reach $1.1 trillion in 2012. That number is troubling enough but the reality is much worse. The United States will actually go about $4 trillion further in debt during the year."
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Showing posts with label massive debt. Show all posts
Showing posts with label massive debt. Show all posts
Thursday, February 2, 2012
Wednesday, March 16, 2011
The Japan Earthquake in American Debt.
Japan is about to undertake one of the biggest rebuilding efforts since the end of World War II. The country has to replace everything from airports and runways to bridges, ports, roads, highways, train tracks, power stations, houses, shopping centers, schools, hospitals, utility and cell-phone towers, parking garages, post offices, production plants... the list would take pages to print out.
The effort is going to cost tens, and more likely, hundreds of billions of U.S. dollars to accomplish.
Japan is fortunate in that it is one of the world’s wealthiest nations, and the citizenry is exceedingly patriotic. As such, Japan has the wealth to accomplish the mission Mother Nature has forced upon the island nation. And it has a population willing to put to work its own savings to rebuild Sendai, Minami-sanriku, Fukushima and others.
But just like pushing on an inflated balloon causes distortions elsewhere, Japan’s now singular focus on a domestic emergency means it has little interest in playing in U.S. Treasury and equity markets.
Indeed, it seems highly likely that Japan will be a net seller off U.S. debt and U.S. equities as Japan’s government, companies and citizens raise cash to fund the rebuilding.
That will have knock-on effects in America.
If Japan Disappears from the Treasury Market --- Then What?
All told, Japan owns an estimated $3 trillion of U.S. securities, both stocks and bonds. With $886 billion of U.S. Treasuries, Japan is the world’s #2-holder of U.S. debt. In the past year it’s bought, on average, $10 billion worth of Treasuries every month.
You don’t easily replace the second-largest buyer of Treasury bills, bonds and notes. Not many countries have pockets deep enough to step up with that kind of financial firepower.
China does, but it already owns more U.S. debt than it needs, and has been putting its cash into other currencies and gold out of a sense of financial prudence. Some of the Middle East nations could pick up some of the slack... but they have their own uprisings to quiet. They’re throwing bags of cash at protestors to quash the dissent, or at security personnel to quash the protestors.
The U.S. Will Have Little Choice But to Raise Interest Rates
A more likely scenario is that Japan largely disappears from the Treasury market, with China and a few others filling in some of that vacuum. And the Federal Reserve, which is slated to end it QE II campaign in June, will likely extend the remainder of its $600 billion buying program over several more months.
But it doesn’t seem likely that the willpower exists in Washington for the Fed to increase the size of QE II [and the resultant inflation]. And that means there will be some shortfall. And shortfalls are bad for the U.S. government because the government has a certain amount of debt it has to sell every month to fund all of its bloated spending commitments.
When the world is already stuffed with American paper, though, there’s only one way to bring buyers to the table: Higher yields.
As such, one of the aftershocks of the Great Sendai Quake will ripple 6,600 miles away, in Washington, DC, where the Treasury Department will have to pay more to access the money it needs to fund America’s overgrown spending demands.
That will make it even more expensive for America to fund its obligations.
Who knows what the ramifications of that will ultimately be? Will Congress accede to QE III? Will rising interest rates here be mildly inflationary (after all, the Fed can’t cut rates any lower)? Will Congress be more amenable to raising tax rates?
And what of stocks? Japan owns more than $1 trillion in U.S. stocks, equal to about 6% of the total value of the New York Stock Exchange. Selling off any sizable portion of that will clearly put downward pressure on American equities.
from Jeff Opdyke
The effort is going to cost tens, and more likely, hundreds of billions of U.S. dollars to accomplish.
Japan is fortunate in that it is one of the world’s wealthiest nations, and the citizenry is exceedingly patriotic. As such, Japan has the wealth to accomplish the mission Mother Nature has forced upon the island nation. And it has a population willing to put to work its own savings to rebuild Sendai, Minami-sanriku, Fukushima and others.
But just like pushing on an inflated balloon causes distortions elsewhere, Japan’s now singular focus on a domestic emergency means it has little interest in playing in U.S. Treasury and equity markets.
Indeed, it seems highly likely that Japan will be a net seller off U.S. debt and U.S. equities as Japan’s government, companies and citizens raise cash to fund the rebuilding.
That will have knock-on effects in America.
If Japan Disappears from the Treasury Market --- Then What?
All told, Japan owns an estimated $3 trillion of U.S. securities, both stocks and bonds. With $886 billion of U.S. Treasuries, Japan is the world’s #2-holder of U.S. debt. In the past year it’s bought, on average, $10 billion worth of Treasuries every month.
You don’t easily replace the second-largest buyer of Treasury bills, bonds and notes. Not many countries have pockets deep enough to step up with that kind of financial firepower.
China does, but it already owns more U.S. debt than it needs, and has been putting its cash into other currencies and gold out of a sense of financial prudence. Some of the Middle East nations could pick up some of the slack... but they have their own uprisings to quiet. They’re throwing bags of cash at protestors to quash the dissent, or at security personnel to quash the protestors.
The U.S. Will Have Little Choice But to Raise Interest Rates
A more likely scenario is that Japan largely disappears from the Treasury market, with China and a few others filling in some of that vacuum. And the Federal Reserve, which is slated to end it QE II campaign in June, will likely extend the remainder of its $600 billion buying program over several more months.
But it doesn’t seem likely that the willpower exists in Washington for the Fed to increase the size of QE II [and the resultant inflation]. And that means there will be some shortfall. And shortfalls are bad for the U.S. government because the government has a certain amount of debt it has to sell every month to fund all of its bloated spending commitments.
When the world is already stuffed with American paper, though, there’s only one way to bring buyers to the table: Higher yields.
As such, one of the aftershocks of the Great Sendai Quake will ripple 6,600 miles away, in Washington, DC, where the Treasury Department will have to pay more to access the money it needs to fund America’s overgrown spending demands.
That will make it even more expensive for America to fund its obligations.
Who knows what the ramifications of that will ultimately be? Will Congress accede to QE III? Will rising interest rates here be mildly inflationary (after all, the Fed can’t cut rates any lower)? Will Congress be more amenable to raising tax rates?
And what of stocks? Japan owns more than $1 trillion in U.S. stocks, equal to about 6% of the total value of the New York Stock Exchange. Selling off any sizable portion of that will clearly put downward pressure on American equities.
from Jeff Opdyke
Friday, June 26, 2009
Ten Trillion Cheerios
Over his morning bowl of Cheerios, Bob remembered the US government has exceeded a debt of ten trillion dollars. He gazed momentarily at his Cheerios and wondered how high ten trillion Cheerios would stack. He also thought about the morning after this breakfast is for.The box of Cheerios had probably contained a little over 5200 Cheerios. 5000 Cheerios (the contents of one box, minus those already in the bowl) were measured, with a mean thickness of 0.183" per Cheerio.
A little bit of arithmetic later and Bob found that 10,000,000,000,000 Cheerios would stack about 28,882,575.76 miles high. That's more than all the way between the orbits of Earth and Venus.
~~~~~~~~
Isn't using Cheerios to make this comparison a little humdrum? But you see, the FDA may regulate Cheerios as a drug.
The FDA says Cheerios advertising makes "unauthorized health claims" Cheerios "may not be legally marketed with the above claims in the United States without an approved new drug application." The heretofore unrecognized threat in the breakfast bowl may spur "enforcement action [which] may include seizure of violative (sic) products and/or injunction against the manufacturers and distributors of violative products."
The FDA is a Big Government agency gone ape. This our future. We are in a world of hurt.
Tuesday, March 17, 2009
Blameless and worse
A friend tried to argue the Democrats are blameless by pointing out the current slowdown started during the Bush presidency. That's a pretty stupid remark if you recall that Congress is where the law and economic policy are made. A quick review of the timeline is in order.
2000 - Bush is elected President in a hotly contested race. Leftwingers never forgive him.
2001 - 7 months into his first term, terrorists attack America, and cause 3000 deaths. Crazy Leftists cheer.
2003 - War in Iraq, Saddam is crushed and flees.
2004 - Bush wins re-election. Leftist controlled press corps winge and slag Bush.
2006 - Democrats win majority of Congress
Remember - US Congress, not the President, controls the purse strings of government. (US Constitution, Article 1, Section 7).
2007 - Rep. Barney Frank (D.-Con) head of Banking and Finance Committee, sees to it real estate loans are rigged to lose banks money. US and world economy hit a high point in October, and wobbles. (Oh, yeah, the Surge in Iraq worked. Insurgents sign on with new Iraqi government.)
2008 - Economy slumping accelerates --- Democrats yelp only they can fix this (even though they caused it). They must have the Presidency, so they have unchecked power....
Although only the Democrats controlled Congress in 2007 and therefore only they made fiscal policy in 2007, the public inexplicably blame President Bush and the way outnumbered Congressional Republicans, sending even more Democrats to Congress in 2009. Stupid American public.
Democrats proceed to screw the electorate. Unless the public wakes up, its only going to get worse. Leftists hate you, America.
~~~~~~~~
"It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong."
-- Thomas Sowell
2000 - Bush is elected President in a hotly contested race. Leftwingers never forgive him.
2001 - 7 months into his first term, terrorists attack America, and cause 3000 deaths. Crazy Leftists cheer.
2003 - War in Iraq, Saddam is crushed and flees.
2004 - Bush wins re-election. Leftist controlled press corps winge and slag Bush.
2006 - Democrats win majority of Congress
Remember - US Congress, not the President, controls the purse strings of government. (US Constitution, Article 1, Section 7).
2007 - Rep. Barney Frank (D.-Con) head of Banking and Finance Committee, sees to it real estate loans are rigged to lose banks money. US and world economy hit a high point in October, and wobbles. (Oh, yeah, the Surge in Iraq worked. Insurgents sign on with new Iraqi government.)
2008 - Economy slumping accelerates --- Democrats yelp only they can fix this (even though they caused it). They must have the Presidency, so they have unchecked power....
Although only the Democrats controlled Congress in 2007 and therefore only they made fiscal policy in 2007, the public inexplicably blame President Bush and the way outnumbered Congressional Republicans, sending even more Democrats to Congress in 2009. Stupid American public.
Democrats proceed to screw the electorate. Unless the public wakes up, its only going to get worse. Leftists hate you, America.
~~~~~~~~
"It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong."
-- Thomas Sowell
Monday, February 9, 2009
One Big Happy Forced Smile Government
Big Government got us into this economic mess; the George Bush version of big government. For the record, the economy began to tank after the Democrats took control of the Congress (where they make the law, remember?) in the 2006 elections. George Bush or not, size is all that matters. Now, things are more the same than ever.
Mr Obama fails to understand the big government approach is the cause of the bankrupture. Barrack Obama and his Big Government chorus are claiming that trillions of dollars of additional government debt and intrusion will get us out of the mess.
Quothe the Biden, "Maybe not."
Lessee... the Obama-Pelosi reasoning seems to be:
Individuals find credit too difficult to get, so private spending fell off. So to improve the credit situation for individuals, the government plans to take about $820,000,000,000 out of the lending system. You see, the government has to borrow this money so they can spend it on their own pet projects. They say Big Government competing with us for credit will help us get credit for ourselves.
This Leftist drivel makes no sense.
Big Government means less personal and private control over private life. And more debt for us all. About $2730 of additional debt for each one of us, like it or not. And this is the tab not even 30 days into this government. You better check your watch and wallet.
For the painfully familiar, this really ought to work stunned wonders.
~~~~~~~~
Public, government controlled, versus private control
If you are expecting the government will really want to pull us out of current financial recession, think again. Government is less responsive to us than corporations. A corporation must respond to you whenever you have interest in what they have to offer for sale. The government only responds at election time, at most every two years.
Both systems are imperfect, but government is nearly deaf as well. A private, profit-driven, corporation will listen better.
~~~~~~~~
Popularity Poll
According to Gallup, Americans give government funding of infrastructure "and other" projects more credence for getting us out of the present mess. If only the so called stimulus bill were about such tried and true methods. Most of the bill contains new socialist programs.
Foreign exchange gives a cool and sober assessment. The dollar has fallen about 15% against the Japanese Yen. Internationally, American politicians don't get high marks for their economic plans. Forex knows our government can break things much easier than mend them.
You see, the current government has no interest in fixing any problems, as long as the senators and congress-ers don't think they will get individual blame. If they enact this socialist dog "stimulus," things may get better by sheer luck. If things stay the same or worsen, who cares? As long as the socialists get re-elected....
It is time to think of tossing these deceptive rascals out. Somehow.
~~~~~~~~
The Final Lesson
Its safe to say that government screws things up. Big government screws things up in really big ways.
During the Clinton administration, the Repelicans took control of the American Congress in 1994 and gave us an era of prosperity, until they forgot that they had done this by keeping government small and unobtrusive.
Early in President Bush's term, the Repelicans began to enlarge the government cancer, taking away more and more economic authority from you an me. This caused problems, but the economy wobbled on, more or less free. So the people tossed out the Repelicans in 2006 and installed the Democreeps. Understandable, but not a good move. The Democreep Congress' version of the Repelican screw up is use bigger government to screw things up in even bigger ways.
Big government got us into this miserable economic malaise.
Now, the Democreeps say that only by completely enslaving the American economy, can we do away with he problem of enslaving the econ. The Democreeps use the populist line: Blame the uncontrolled economy, then savage, ransack, molest, sack and pillage the free element of the economy to really "fix" things. This is as stupid as "fixing" breeding stock to improve the stock line....
Mr Obama fails to understand the big government approach is the cause of the bankrupture. Barrack Obama and his Big Government chorus are claiming that trillions of dollars of additional government debt and intrusion will get us out of the mess.
Quothe the Biden, "Maybe not."
Lessee... the Obama-Pelosi reasoning seems to be:
Individuals find credit too difficult to get, so private spending fell off. So to improve the credit situation for individuals, the government plans to take about $820,000,000,000 out of the lending system. You see, the government has to borrow this money so they can spend it on their own pet projects. They say Big Government competing with us for credit will help us get credit for ourselves.
This Leftist drivel makes no sense.
Big Government means less personal and private control over private life. And more debt for us all. About $2730 of additional debt for each one of us, like it or not. And this is the tab not even 30 days into this government. You better check your watch and wallet.
For the painfully familiar, this really ought to work stunned wonders.
~~~~~~~~
Public, government controlled, versus private control
If you are expecting the government will really want to pull us out of current financial recession, think again. Government is less responsive to us than corporations. A corporation must respond to you whenever you have interest in what they have to offer for sale. The government only responds at election time, at most every two years.
Both systems are imperfect, but government is nearly deaf as well. A private, profit-driven, corporation will listen better.
~~~~~~~~
Popularity Poll
According to Gallup, Americans give government funding of infrastructure "and other" projects more credence for getting us out of the present mess. If only the so called stimulus bill were about such tried and true methods. Most of the bill contains new socialist programs.
Foreign exchange gives a cool and sober assessment. The dollar has fallen about 15% against the Japanese Yen. Internationally, American politicians don't get high marks for their economic plans. Forex knows our government can break things much easier than mend them.
You see, the current government has no interest in fixing any problems, as long as the senators and congress-ers don't think they will get individual blame. If they enact this socialist dog "stimulus," things may get better by sheer luck. If things stay the same or worsen, who cares? As long as the socialists get re-elected....
It is time to think of tossing these deceptive rascals out. Somehow.
~~~~~~~~
The Final Lesson
Its safe to say that government screws things up. Big government screws things up in really big ways.
During the Clinton administration, the Repelicans took control of the American Congress in 1994 and gave us an era of prosperity, until they forgot that they had done this by keeping government small and unobtrusive.
Early in President Bush's term, the Repelicans began to enlarge the government cancer, taking away more and more economic authority from you an me. This caused problems, but the economy wobbled on, more or less free. So the people tossed out the Repelicans in 2006 and installed the Democreeps. Understandable, but not a good move. The Democreep Congress' version of the Repelican screw up is use bigger government to screw things up in even bigger ways.
Big government got us into this miserable economic malaise.
Now, the Democreeps say that only by completely enslaving the American economy, can we do away with he problem of enslaving the econ. The Democreeps use the populist line: Blame the uncontrolled economy, then savage, ransack, molest, sack and pillage the free element of the economy to really "fix" things. This is as stupid as "fixing" breeding stock to improve the stock line....
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