They say pencil-neck geeks are a dime a dozen...

[Weisshaupt]

They Say pencil-neck geeks are a dime a dozen. I am looking for the guy supplying the dimes.

Don't worry. This Pencilneck says everything is fine

For instance, if the USD deposits draw 5% annual interest and the USD loses 3% of purchasing power every year, the owner of the dollar still earned a 2% positive return.
There is another interesting feature of interest-bearing bonds: as interest rates decline, the bond rises in value.This sets up the delicious irony of the Chinese whining about their $1 trillion in U.S. Treasury bonds earning such low yields, while in fact their holdings have greatly increased in value as interest rates have declined.

Yeah, why would china be whining? Oh right, bond yields aren't just negative for the bonds they are selling now - and China can see what the money printing will do to inflation and make their returns negative as well.   Yes a 3% bond is worth more than a 1% bond, but both suck at 5% inflation.

The yen is currently viewed as a "safe haven" due to the great stability and wealth of Japan. But two decades of massive deficit spending and debt accumulation are finally putting pressure on Japan, Inc., and those willing to bet the yen will retain its current purchasing power for five more years are taking on an extraordinary amount of risk that has yet to be priced into the yen. Once again, the question boils down to how much of the yen's purchasing power is in the hands of its issuers. For 20 years, Japan's domestic purchases of its own debt kept the global market at bay. As domestic savings rates dry up and the ageing Baby Boomers start cashing in their bonds and drawing pensions, the system may finally be exposed to global market "pricing" of risk. That exposure could destabilize the yen's position as "safe haven." Whatever your calculus, it is self-evident that of all the issuers of major currencies, the U.S. retains the most control over the elements the market uses to "price" the risk that the dollar's value as a means of exchange and store of value is unsettled.

but

Any nation that promises to pay interest on bonds denominated in its currency must be able to enforce its claim on the national income via taxation. If the national income is too unreliable or unstable to support the claim, the international community loses faith in the currency and it depreciates to zero even if the currency isn't printed with abandon.

Its taking a John Roberts level of self delusion to keep both points in your head. How do you think the Yen has a big revaluation coming because they have reached the end of their internal savings, but that it won't happen to the dollar, because Americans have less savings than the Japanese? (you know unless  those 401Ks and IRAs are forced into "safer bonds")  Likewise, he compares the dollar to the Euro

Does anyone seriously believe the European Central Bank (ECB) retains sufficient global control over the euro's valuation to mandate its value five years hence? The currency's viability is in question even now, never mind in five years. Clearly, much of the market's pricing of the euro's value is outside the control of the euro's issuers; whether they admit it or not is irrelevant.

The Euro is different from the dollar how? No one has  "control" over the currency. The people who use and spend the money do.  Its like saying XYZ corp "controls" 80% of the market - you know - till they don't because ZYX corp now makes a better  competing product. Its okay, its debt we owe to ourselves!  Who cares if all of the SS benefits and govt pensions get paid?  (http://politicalcalculations.blogspot.com/2011/12/winter-2011-edition-who-owns-us.html) What about about State, local and private debt owed abroad? . The article is correct its not just the number of dollars present in the system, or monetary policy that determine value, but the expectation that dollars  will hold their value after investment.  Bond yields are currently negative - because of the printing! The FED is already having to proxy purchase the bonds to even keep the yields where they are.  Do you really expect to have more/same purchasing power in 3 years? 5 ? No?  Well neither do foreigners



Looks like they stopped accumulating debt too, doesn't it. Why?


Oh right, there is no possible way to pay it.

This  is  the old "the dollar sucks the least " pitch. The  US income IS Unstable. This is the 5th year of  $1 Trillion deficits, and that trend shows no sign of stopping. The unfunded liabilities  are already unsustainable and unpayable.  The elephant is not only  in the room, its standing on this guy's foot.

I have made the case technically for over a year that the U.S. dollar has reversed its long downtrend and is now in a structural advance. If we examine the multiple dynamics of FX, foreign trade and the market's pricing of currencies, we can discern a strong fundamental case for this advance as well. There is no magic in free-floating currencies, there is only the market discovering the price of numerous inputs, only some of which are easily quantifiable.

The Dollar is going to win the race to the bottom!  Hurray!

[IronDioPriest]

In spite of the massive maw of debt that threatens to imminently swallow all existing wealth, it would (or will, to think positively) be interesting to see what happens to the trends when the Marxist is turned out of office, and economic forces gain confidence that the capitalist system is no longer under attack from within the systems own central engine.

So much about capitalism is based on confidence in the system into the future. Obama has perhaps been the single greatest destroyer of that confidence ever, at least as far as loss of wealth as the end-result measure. Who was it... Steve Wynn (?) who said that Obama is the biggest wet blanket ever thrown on the economy? I think he is right.

[Weisshaupt]

In spite of the massive maw of debt that threatens to imminently swallow all existing wealth, it would (or will, to think positively) be interesting to see what happens to the trends when the Marxist is turned out of office, and economic forces gain confidence that the capitalist system is no longer under attack from within the systems own central engine.

So much about capitalism is based on confidence in the system into the future. Obama has perhaps been the single greatest destroyer of that confidence ever, at least as far as loss of wealth as the end-result measure. Who was it... Steve Wynn (?) who said that Obama is the biggest wet blanket ever thrown on the economy? I think he is right.

Mittens doesn't inspire confidence. He is just better than the alternative- but I hold little hope that things will improve under his watch, unless "improve" is defined as "deteriorating less quickly"

[Charles Oakwood]

It may not be a bad idea to sell 50% of PM
holdings before he repeals Obamacare.

...on a high, of course.

[Libertas]

In spite of the massive maw of debt that threatens to imminently swallow all existing wealth, it would (or will, to think positively) be interesting to see what happens to the trends when the Marxist is turned out of office, and economic forces gain confidence that the capitalist system is no longer under attack from within the systems own central engine.

So much about capitalism is based on confidence in the system into the future. Obama has perhaps been the single greatest destroyer of that confidence ever, at least as far as loss of wealth as the end-result measure. Who was it... Steve Wynn (?) who said that Obama is the biggest wet blanket ever thrown on the economy? I think he is right.

Mittens doesn't inspire confidence. He is just better than the alternative- but I hold little hope that things will improve under his watch, unless "improve" is defined as "deteriorating less quickly"

Agreed.

And I am getting really tired of "the dollar sucks the least " pitch!  But isn't the same true for Mitt?  Mitt sucks less, not perfect, can't have perfect you silly ninny, but he sucks less.

Yay...

 

[warpmine]

And here we are in a depression that everyone has called "The Great Recession" so not to upset the easily fooled fools.

[IronDioPriest]

...Mittens doesn't inspire confidence...

I don't know if I agree with that regarding broad economic matters and trends. Just removing the wet blanket may be all the inspiration the free market needs to spark the confidence that will unleash capital. I think trends could be reversed, and possible even reversed drastically. If trends reverse, and Romney has a pulse - let alone the possibility that he might implement policies to right the course - he'll get the benefit of a cumulative increase in confidence.

But as you say, whether that is even close to enough to spark hope for a full recovery is another matter entirely.

[Libertas]

...Mittens doesn't inspire confidence...

I don't know if I agree with that regarding broad economic matters and trends. Just removing the wet blanket may be all the inspiration the free market needs to spark the confidence that will unleash capital. I think trends could be reversed, and possible even reversed drastically. If trends reverse, and Romney has a pulse - let alone the possibility that he might implement policies to right the course - he'll get the benefit of a cumulative increase in confidence.

But as you say, whether that is even close to enough to spark hope for a full recovery is another matter entirely.

But the big ugly gorilla in the corner growing larger is being ignored by all...we just had our 5th straight year of $1T+ debt, that isn't going to be reversed by anybody and certainly not drastically.  The right economic polices could release private equity and making the Bush tax cuts permanent and repealing ObamaCare and other intrusive unneccssary regulation could add stability and predictability in business operations and help spur genuine growth and better employment numbers, but no amount of growth is sustainable and the debt and foolish Fed monetary policy in cahoots with Treasury & the PPT are immense roadblocks to overcome.  You could have 6% real GDP for 10 years and still be left with a mountain of debt.  Reducing Mount Everest to 20k feet may seem nice, but it's still 20k feet!  Time is not on our side, and combined with volatile politics time only grows shorter.

Getting only half the job done leaves a lot hanging out there, and all you did is buy time.  When the Democrats regain power, and no doubt the feckless GOP leadership will allow it sooner or later, it'll be 3 steps back again.

[Glock32]

Exactly. That is why radicalism is called for. We have to devise ways of uploading a political virus into the system that will continue to do this necessary work while "we" are out of power. That's what the Left has managed to do for decades in the bureaucracy. Being periodically swept from power has been no big problem for them, because they have an army of "civil servants" continuing the Left's agenda unimpeded.

What sort of "political virus" could we fashion? I don't know really. But one that I think would be huge is some way of breaking the stranglehold of baseline budgeting. It's absolutely ridiculous that every bureau, agency, department, and office gets an automatic year-to-year increase. It's so firmly ingrained in the culture of that place that politicians grandstand about their dramatic spending cuts, when all they've done is made some minor reduction in the amount of increase!

[Libertas]

Yeah, I've thought about this over many years...we have a different set of challenges before us than our enemies.  Our enemies gravitate towards bureaucratic positions, titles and power and the exploitation of the under-class ..we of the productive class gravitate toward achievement in work, family and faith...we simply cannot do what the Left does because what they do is natural to them and completely unnatural to us, we are simply ill equipped to employ deception, deceit and distraction and we have little desire to enter the bureaucracy or suck off of others and take to the streets for mindless gatherings called "protests" and get bused by union and political organizations to demonize those of us trying to do what is right.  But you are right, we need to undermine the bureaucracy at every turn, we need armies of people to become Breitbart's and expose the deception, deceit and distractions of our foes.  We need armies of engaged patriots to form civil groups with specific targets to mark for deletion.  We need new Sons of Liberty to sabotage and disrupt the machinations of the Left at every turn.  We need an aroused populace willing to support our aims to save this nation before the Left destroys it all and active civil disobedience to the dictates of government at all levels.  This is a challenge for us, because unlike our foes we have real jobs not cushy phony positions that allow us to agitate others, we are freethinkers not mindless robots obeying our masters, we are committed to healthy families where our enemies only seem to want to tear them down by rendering them meaningless, we are committed to our Christian beliefs not a failed ideology designed to destroy the Judeo-Christian tradition and undermine all concepts of Devine power, designed to eliminate all rights to life and liberty and property and designed to destroy individualism in favor of some Utopian fantasy that intends to enslave all mankind to the state and its elite ruling class.  Until such realization and action occurs we are left where we are...floundering...groping...losing far too many battles and losing the war.

[Weisshaupt]

we need to undermine the bureaucracy at every turn...

What you are describing is trying to fight within the system. We can't- because it isn't in our nature. Could you- as politically motivated as you are, take a civil service job in some nameless bureaucracy,  serve faithfully the number of years required to get into a position of power without being corrupted by the culture around you, and enduring the presence and stupidity of those around you,  and then sabotage the system in such a way that ensures it cannot function but still leaves you at the levers of power? Soon as the apparatus needs something you can't (or won't)  deliver, those with the levers levers above you would have you removed, and you would have only bought time. And if you choose to deliver on the important stuff, then the apparatus won't care you have stopped thier little machine. They have 7 duplicate agencies that accomplish the same - they will just fund those and not you. You cannot threaten them, because the entire system is based on the politics of pull - and they decide how much pull you have. The machine can only be attacked from the top - and our supposed leaders, Mittens included,  are unwilling to do so - because ultimately they feed at the same trough, and are corrupted by the same influences you would be steeped in in some lower position.  Power Corrupts, and we haven't many hobbits.

But the Bureaucracy undermines itself. The economic realities alone ensure the failure of the current systems. Exposing their operation does little to nothing to correct the problem. Democrats don't care what evils their leaders do - everything is justified in furthering the great cause. They always sow the seeds of their own destruction. They fight change. look at the comments here! Those Evil Capitalists "exploit" their workers, but using robotic labor that frees them from exploitation is more evil still!)    Bureaucracies always become insular and self-serving and static - Tribal in nature. Why DHS? Because the FBI and CIA didn't ( wouldn't) share info with each other. The liberal quest is ALWAYS to form a bigger and bigger tribe, and to kill and enslave "the outsider", the "hater."  But such systems can only regulate productive work - not generate it.  They are parasites that inevitably kill the host.

"Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
This is known as "bad luck."

Probably the most important political fact ever stated. They intend to , and will succeed at,  reducing us to abject poverty and their systems, which rely on unparalleled growth and prosperity , will collapse. This is a risky time, but historically Bureaucracies are bad at dealing with that sort of environment.  The "Extend and Pretend" monetary policy is indicative of the reluctance to change, modify or adapt. So are the desperate attempts of townships and counties to cut off streetlights, cops  (Bloomberg!), schools and firefighting services, rather than deal with the pensions or welfare programs which protect and fund the "in-group" - And desperation is what it is. The more foresighted among them see the coming catastrophe, and with that crisis they see the opportunity to fully conquer us - but they are not in such control that victory is assured.  When the economy goes,  they loose much of their power. Martial Law will be a desperate attempt to seize and retain power when the other systems they use implode. (How many of these self-serving, paper pushing, self-important, entitlement mentality barbarian bureaucrats will say at their desks being paid in useless script?)  They will resort to  extorting  payment in Bribe form. The military will become mercenary in nature, and will have to be paid in rape and stolen booty, and taking  such will be resisted. The mask of a benevolent Nanny will of necessity be ripped off - and those that are capable of being woken, will awake, and the game is on. They will, of course, try to take that mask off as slowly as possible, and try to slow the collapse- using their standard "boil the frog" approach.  However, the ammo and hardware they are purchasing tells me that they are not at all confident of their abilities.

We are at a point where the only way back is through the maelstrom, and its going to be a rough, unpredictable ride.  Become as self-sufficient and low profile  as possible. Connect with  the like minded, and get ready for anything.

[Libertas]

We are not in disagreement Weisshaupt, I perhaps left the definition of "undermine" too open to individual interpretation, I think most who know me realize I am not the kind of person to enter the bureacracy thinking I can destroy it and stay uncorrupted at the same time.  Perhaps there are individuals who can pull it off, me, I'd be lucky to last one day without pushing some clown down a flight of stairs, through a wall or out a window...

 

[Charles Oakwood]

We each in our own way and ways we learn
work to undermine it.  I've started paying
my bills by phone therefore I buy fewer
stamps.  It's a drip.