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No Lifeboats, by Robert Gore

Posted by straightlinelogic 7 years, 8 months ago to Economics
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The real purpose—the only one that matters—of governments and central banks’ machinations since the financial crisis has been to finance governments. The world stood on the edge of the debt contraction abyss. Debt had reached an unsustainable level. Economies could no longer bear the load of interest payments and principle repayment. The marginal value of most debt, particularly that which funded consumption, had gone clearly negative. Even the value of debt incurred to fund “investment” was dicey, since much of that investment was actually speculation in disguise: house flipping, leveraged mortgage security arbitrage, share buybacks, and the like. The financial crisis was the iceberg rending the hole in the hull. Since then, the hole has only grown.

The bridge knows the vessel is taking on water and sinking. Sovereign debt has been monetized and interest rates driven to subzero so governments can buy themselves a little more time. Savers and those living off of fixed income investments were steerage, the first to be sacrificed. For them, the future of diminished consumption that everyone says is inevitable—but nobody seems to believe will ever happen—has arrived. They’ve been told to go to the hold and await further instructions while the central bank pumps bail away, but they’re up to their necks in cold, fast-rising water.

This is an excerpt. For the full article, please click the above link.
SOURCE URL: https://straightlinelogic.com/2016/07/24/no-lifeboats-by-robert-gore-verisimilitude/


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  • Posted by CircuitGuy 7 years, 8 months ago
    "The candidates know that debt will sink the economy"
    Gary Johnson, who is not yet a "mainstream" candidate is talking about this.
    I do not at all agree that it's rational for politicians to avoid the problem b/c it's hopeless. On the contrary, it's very easily solved. Gov't could simply free nominal spending, and the problem disappears. I believe we will do this once it becomes a crisis. Of the candidates on the ballot in all states, only Gary Johnson is talking about this at all.
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  • Posted by coaldigger 7 years, 8 months ago
    I see the economic failures as the resistance of the market to unnatural acts by government. The morons on the bridge are steering the boat through a sea of ice bergs because they are determined to be seen as having unique talent endowing them with the right to be in control. The natural currents of the market would cause the ship to drift out of the ice, preventing further damage and allowing for repairs to previous mishaps. The downside would be that the crew would cast the fakers overboard.
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  • Posted by Herb7734 7 years, 8 months ago
    As a retiree, I feel the cold water around my knees. No lifeboat? Heck, I don't even have a floaty. Forget that scenery tour of the USA I always wanted to take. The new car every 2 to 3 years? Forget it. As interest rates disappear and prices for essentials rise, us elders are getting the message. Science has made it possible for you to live longer, but be patriotic and please be kind enough to die.
    Tes, there are investments that yield profits and we are invested in some, plus we are all paid up on most everything. In that, we are luckier than most. But, I can see the diminishing, not only of my stash, but of the value of the stash itself.
    I no sooner get off of one of life's roller-coasters than I find myself standing in line for another one.
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  • Posted by mia767ca 7 years, 8 months ago
    posted to facebook....so are ALL the political parties arguing over how to rearrange the chairs on the Titanic???...
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    • Posted by 7 years, 8 months ago
      Thank you. All the political parties are contending for an ever shrinking space above the onrushing water.
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      • Posted by lrshultis 7 years, 8 months ago
        The two main parties are, but what about a government get out of the way, we want a return if you want us to investment party. Investments are not for return on the investment but are now ways to try to just save the principle. I don't have much wealth and am pretty much stuck in 0.85% CDs and some savings at 0.1%. I am slowly being sucked dry though I am old and not in the best of health so maybe able to make to the end. Neither liberals nor conservatives will do it and libertarians are too hated for asking for liberty to do any change.
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  • Posted by chad 7 years, 8 months ago
    The problem with fiat currency is that it has no value until it is spent for something of worth (value). It is not a store of value and it is easy to lie to those who use it; inflation is less than 2% if you don't count food and energy :?. If your annual salary is increasing at a rate less than inflation (devaluation) you are losing ground. If you are saving you will end up with less than you started with and be unable to sustain yourself. Local governments indebt your property with bonds to sustain unproductive programs ideas so that even if you 'own your home or car' and try to use them without sustaining the debt (payment of property taxes or licensing) of ruling class you will find the ruling class will remove your property from you. There is no way to win, the only way to live is to live unobserved if possible so as not to draw the attention of those who need someone to prey upon.
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  • Posted by RonC 7 years, 8 months ago
    My understanding of bankers is that they would rather turn over the loan with agreeable terms, than show a $20T loss. In their world a $20T loan is an asset, while a loss is just unacceptable. The real political question is are the Chinese bankers or enemies of the USA? They can't take buildings and land with them should they foreclose, so I'm guessing they will offer terms.
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    • Posted by $ MichaelAarethun 7 years, 8 months ago
      Exactly correct. Exactly what they have been doing all along. Keeping our economy afloat provides them customers to support their still fairly new but necessary use of capitalism to support socialism.

      Now think about thin air. What makes you think the Chinese have the money to lend? They do the same thing our Fed does they made it up out of thin air based on a lot subjective and some partially objective reasoning to make it souond good. Having decided how much they make it available for loans. It's transferred magnetically in digits of no intrinsic value or as trade goods of value. US consumer using inflated and devalued dollars makes purhases.

      Walmart caught on instantly and took advantage over the other store chains. They do the best product available at the lowest possible price and they hire old people whose devalued money (thanks largely to the government and people like Thomas Dodd and Barnie Franks ) in their retirement accounts has lost buying power.

      In short the government has left the amount of dollars but stolen the value of the dollars in order to pay a debt. What debt? government caused inflation, devaluation caused the situation so they refuse to take that increase int he cost of living and apply it to COLA which would have kicked off an increase in Social Security and all unfunded retirements meaning the entire military veterans structure. one and even zero percent increases are decreed but hells bells dudes the 2008 crash alone caused a 20-30% cut in your every day living due to ....inflation, devaluation and repudiation of the debt caused and owed by the government.

      Did they quit it's a continuous cycle offficial name Cycle of Economic Repression. But iyou get enough to keep buying and where do you buy. In Dollar General, Family Dollar , Dollar Tree and of course at Walmart. Where else can you afford to buy. The week chain stores start closing and I see Whole Foods is on that list for this year if it hasn't already - or been bought by the Chinese or some other foreign country with funds to buy T Bills. Guess what? China is not number one in debt holdings from the USA. Last I looked it was Great Britain.

      The cycle bvegins again. More borrowing to fund more programs not just increased costs of older programs - new programs. And allo of it based on a new standard. Not gold, not credit not faith and not even the fear standard anymore. It's the thin air standard.

      Here's the final part. T Bills at zero percent as a place to safely park money. Used by the really big money people and foreign governments. Why? Cause banks only pay $250,000 FDIC for failures one time per person. If you had a million you just lost $750,000. and the remainder took a hit on buying power. You now have oh cricket pitch it at $183,000 in terms of value.

      BUT if you had your money in zero interest T Bills. you would lose on the one third in buying power. and have S666,000 left.and still show the whole million as assets.

      Minus rake offs in the forms of contributions to the people that made it possible - money as free speech. to influence the only legal racketeering collective - I mean gang - in the country. US Congress.

      But but but the price of gas has gone down! Has it? 99.9 cents a gallon in 1999 went up in the $4.00 a gallon area in some places $3.00 in others. Drove up the price of everything that had to be delivered. to the store where you buy with your deflated value what's left account. Sure it's down ner $2,00 now. BUT sixteen years ago it was 99.9 cents a gallon. and that dollar is only worth seventy cents so let's see we'll call it $2.00 a gallon to make the math easy. You know are paying $2.00 in 1999 money a loss of half in devalued after tasx earnings.

      but to get back to China they keep the cycle going and so what if they can't take it out of the country directly? Remember those money as free speech donations. Hmmmm Mr. Congressional we need a special trade deal to do such and so. Really? I can get behind that and is the operating corporation an investment stock firm? Remember Congress is the only group in the country that is not subject to insider trading.

      Still want to vote for and continue enabling the same crooks? Really? You do? You deserve a special no charge ticket for a big time award. It's called BOHICA Lottery and you just won.

      Inflate, Devalue, Repudiate - it means refuse to pay the debt. Getting near to or are retired. Ha ha ha You just paid your share and got zero credit for it. Going off to war solider? Why? Your pay just lost 1/3rd it's value.

      But the bankers will certainly restructure a debt it's call re-fi. Or put you back in debt with a new mortgage which means losing home owner status and returning to home buyer status.

      remember they are one third of the socialist triuimverate. Big Corporations - mostly financial. = Corporatists along with Statists and oh yes Union Leaders. the three exempt groups that are exempt from being part of the socialist collective - like you - and allow them to be the ruling class. Just like Plato designed it

      Now be a goodl little puppy and go enable us - i mean vote for us again. Here's a doggie treat. Just jump on the couch potato butt and relax this won't hurt a bit. BOHICA!

      you dont' understand? Go read Straight Line Logics linked article again. Still don't understand? BOHICA. Here's a coupon for petroleum jelly.

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