Julian Robertson: Inflation Risks and the United States debt blackhole...blackhole...blackhole...echos

I think he speaks reality.

Side note: It's amazing how everything we own (assets), has gone down in price (deflation); while things we consume (gas, food, utilities, etc), has gone up in price (inflation). Its a double whammy especially when you are making principle and interest payments on 'assets' based on a previously inflated price.

A little dose of economic reality

Visa chairman says he doesn't see recovery, but stabilization.

Ron Paul: "Goldman Sachs Has A Lot Of Influence In Our Treasury And A Lot Of Influence In Our Federal Reserve"

Goldman Sachs is bigger than the FED and the FED is bigger than CON-gress. Towards the end he says it and it was time to end the interview. How about that for the mainstream media?

Why Our Economy Is Utterly Screwed

From: www.market-ticker.com Karl Denninger

Steve Liesman once again stunned me with his lack of understanding of matters economic today, when he commented that "in all recessions since 1970 at least the original part of it (recovery) has been jobless."

Yes, Steve, but why is any of this a surprise? What part of this graph isn't instantly obvious to anyone with more than two firing neurons in their head?

That's credit and population growth normed to a base of 1970. Population went from roughly 205 million to roughly 304 million during that time, a 50% increase.

Outstanding consumer credit went from $128 billion to $2,525 billion, or a 1,973% increase - and this is only consumer credit, ignoring mortgages, financial firm credit, business credit, commercial real estate and of course government debt!

Why are we not seeing "robust" economic growth when we exit recessions? Why is there no real hiring going on? Why can we not have a robust economic recovery? Why are we are replacing good jobs with "McJobs" that pay half as much - or less? And more importantly, where did all the "so-called prosperity" really come from, especially from 1994 on?

In each and every instance of recession from 1970 onward we have "pulled forward" more and more demand and created fake "prosperity" through the creation of ever more debt that we have goaded consumers to take on. By doing so we have crippled the ability of the economy to grow, redirecting as much money as possible to a handful of people and firms (commonly known as "banks" and other "financial companies") instead of directing that effort and money into productive enterprises such as building cars, television sets and similar items.

THIS time though the recession didn't come from "ordinary business conditions"; it instead happened because the credit carrying capacity among both consumers and businesses hit the wall - they could no longer make the debt service payments and started to default.

It began with "subprime" mortgages but that was nothing other than the first "hiss" of trouble out of the pressure vessel as the structural integrity of the fraud-laced credit system, where "capacity to pay" became a bad joke, had begun to disintegrate.

We pushed the envelope of fraudulent credit creation and the sale of fraudulently-underwritten debt too far - and it blew up in our collective faces!

Rather than admit complicity in the myriad Ponzi-style scams that underlay all of the financial system for more than thirty years (or have it shoved in their face) The Fed and financial "wizards" along with The Bush Administration (who was responsible for and complicit in refusing to fix the fraud during the 00-07 timeframe) chose to try to sweep it under the rug with "yet more liquidity" and "yet more lending."

President Obama and his administration made a critical error after having won in November by refusing to stand up and take these scammers on face-to-face.

He decided to instead continue and even accelerate the scam!

It can't and won't work because the underlying issues have not been resolved and the bogus debt has not been forced out and defaulted - it remains clogging up the system, destroying the ability of the credit-intermediation system to function properly.

Period.

Folks, the facts are impossible to ignore. We are in this recession because consumer and business borrowing capacity hit the wall. We have removed almost none of that outstanding credit from the top to today, as this chart shows (which I have printed here an endless number of times!)

We have taken a measly 4.5% off the maximum outstanding credit amount (incidentally reached in January of this year) to date. 4.5%! That's nothing - it is absolutely insufficient to return the system to normal functioning and restore sound economic growth - we need five times or more that much contraction!

The bad news folks is that we will get that contraction, and if The Government and Fed do not force it to happen "voluntarily" we'll get double that much - as much as a 50% decrease in outstanding credit - coupled with a deflationary credit collapse.

The small crack in the market the last few days is a warning: The fraud-laced game is about up and we are running out of time to do the right thing.

Stop listening to the media idiots - they have not and will not discuss this facet of the crisis because doing so means admitting that their corporate parents are a huge part of how we found ourselves in this mess, along with all the advertising they've stuck in your face for the last 30 years to "go on, buy now, pay later!"

But irrespective of whether CNBC talks about it or not the mathematical reality of credit capacity as it relates to both population and earnings capacity is a mathematical reality. No amount of magical handwaving will change it, leaving us with only two choices: we either force the bad debt out into the open and default it, thereby shrinking both the balance sheets of banks and consumers (at the same time) or we continue to try to "press our bets" and take the risk of a second credit-system dislocation that will be far worse than what we experienced last fall and this spring.

At present we are choosing path #2 - a river that is quickening in pace.

Does anyone have an idea what that funny roaring noise around the next corner might be?

Cash for Clunkers to end on Monday

Cash for Clunkers program sold 457,000.

You know what I find amazing. This program cost $3 billion. GM plans to rehire 1300 of its workers back. So what does that equal; $2.3 million for each job saved. How about that for $3 billion well spent. So, for the government to save 10 million jobs we need to spend $23,000,000,000,000. Yes that is 23 trillion!!! Brilliant.

Also I find it amazing that we have taken people with no car payments and now have provided them with a $25,000 debt plus higher insurance costs. Isn't that wonderful.

To go with my previous post: "If you cannot enslave an individual by virtue of his own debts then enslave the entire population by casting their government into debt." This fills both sides of that quote.

What the FED doesn't want you to know.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Are you kidding me? Housing starts are up. Thats insane!

This can not be good:

July 17 (Bloomberg) -- Housing starts in the U.S. unexpectedly rose in June as construction of single-family dwellings jumped by the most since 2004, signaling the market is stabilizing. The 3.6 percent increase brought starts to an annual rate of 582,000, the highest level since November and followed a 562,000 pace in May that was higher than previously estimated, the Commerce Department said today in a Washington. Building permits, a sign of future construction, rose the most in a year.

"Signaling the market is stabilizing" That is insane!!!

How can building more houses be good for the economy? We have so many houses in foreclosure and so much available inventory. This is foolish. I think building more in this current financial crisis is criminal. It will bring down housing values further, destroying equity (whatever is left) for most people. The lenders are behind this taking money from the discount window at 0% basically and lending at 5, 6, 7 or more percent. If the loans fail, there is still 'plenty' of TARP money available. That way we can see more banks, etc make $3-4 billion/quarter, while the taxpayer gets fleeced.

I get sicker by the day.

The Real Price of Goldman's Giganto-profits

I am on a rant today about Goldman Sachs...Sorry.

The Real Price of Goldman's Giganto-profits, Matt Taibbi - Click for some entertaining reading.

Another must watch: Glenn Beck explains the Goldman/Federal Gov't connection

This is a must watch video. Goldman Sachs has got their fingers into everyone's arse in Washington and their whole hand in our pockets.

Max Keiser takes offense to Goldman Sachs story

I love this. Watch him go off on Goldman Sachs.

Part 1



Part 'Deux' 2

How about Charlie Gasperino vs Goldman Sachs - He gets booted by GE

Elliot Spitzer on Bloomberg - Goldman Sachs

Backlash against Goldman Sachs-MSNBC

Visit msnbc.com for Breaking News, World News, and News about the Economy

Budget Deficit tops $1 trillion for first time.

Budget Deficit tops $1 trillion for first time. (AP News)

This goes along with the email I sent yesterday.

Statement by Chairman Gary Gensler on Speculative Position Limits and Enhanced Transparency Initiatives

Below is a link of the CFTC's initiatives regarding commodity futures. This might change the way ETF's are traded. We will wait and see.

• http://cftc.gov/stellent/groups/public/@newsroom/documents/pressrelease/genslerstatement070709.pdf

More NYSE and GS shinanigans...ooops!!!

"We Screwed Up" (ZeroHedge.com)

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• Taibbi: Impending Rule Change Means Goldman Sachs Stock Manipulations Can't Be Tracked (crooksandliars.com)

A Goldman Sachs trading Scandal?

Check out the links for a breaking news story on a possible Goldman Sachs trading scandal. This could reveal the Goldman's trading methods and programs.

Click one of the links below:

ZeroHedge.com
Reuters
CNBC

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• Goldman Sachs: The great American bubble machine (seattlepi.com)
• Taibbi: Impending Rule Change Means Goldman Sachs Stock Manipulations Can't Be Tracked (crooksandliars.com)

7 more banks fail as FDIC mulls rules for sales

7 more banks fail (AP)

Matt Taibbi interview after the Goldman Sachs article he wrote

Below is the link for the Matt Tiabbi interview conducted on BNN.ca

http://watch.bnn.ca/the-close/july-2009/the-close-july-2-2009/#clip189690

Extended Trading

NYSE extending trading until 4:15pm today.