Tim Geithner Responds To Druckenmiller With More Fearmongering And "Assured Destruction" 

Submitted by Tyler Durden on 05/14/2011 15:18 -0400

Not even 24 hours after Stanley Druckenmiller said to ignore all threats by the kleptocratic kartel [sic] of a world collapse should the debt ceiling not be hiked, as if on cue the tax-troubled treasury secretary has released another letter, this time to Michael Bennet, D-Colo, in which he rehashes all the usual threats that Hank Paulson pulled out of his sleeve when he presented his 3 page term sheet demanding congress give him unlimited powers to do anything Goldman, er, he saw fit to preserve the banker status quo. Nothing new in the letter, just more of the same: “A default would inflict catastrophic far-reaching damage on our nation’s economy, significantly reducing growth and increasing unemployment...Even a short-term default could cause irrevocable damage to the economy. A default on Treasury debt could lead to concerns about the solvency of the investment and financial institutions that hold Treasury securities in their portfolios, which could cause a run on money market mutual funds and the broader financial system. A default would call into question the status of Treasury securities as a cornerstone of the financial system, potentially squandering this unique role and the economic benefits that come with it." It is sad that the Treasury has succumbed to another bout of fearmongering because as Zero Hedge has been claiming since late 2009, and as Gross and Druckenmiller have recently reaffirmed, the only threat to the "confidence" of the US is if (or more correctly "when") the legislative bodies of the US succumb to this latest round of completely flawed, irresponsible and wrong mutual assured destruction rhetoric, and once again hike the debt target, this time to a total that is about 115% of US GDP. 

 

 

 

 

The Complete Overview Of The Setting Economy Of The Land Of The Setting Sun 

Submitted by Tyler Durden on 05/14/2011 14:54 -0400

Increasingly we have come to believe that the real marginal economy over the next several quarters will be neither that of the contracting US, nor that of the rapidly tightening, yet still very much inflationary China, but the (arguably) third largest one: that of Japan. Over the past month we have suggested that in addition to already latent deflationary tendencies, the recent post-earthquake collapse will require a dramatic, and very political intervention in BOJ monetary policies (here and here), in order to avoid a global contraction. Yet as David Koo proposed yesterday, the (infra)structural changes will demand an overhaul so profound that the contraction will be not only severe but likely very extended due to spillover effects into energy commodity demand, thus creating a non-virtuous feedback loop. So for those who are still new to the Japan story, below we present an extended presentation compiled by The Tail Chaser blog which compiles the relevant bits and pieces on the Japanese economy to scare even the most optimistic fan of the land of the setting sun (which certainly is not Dylan Grice who recently suggested that a very possible outcome is a Weimar repeat as the BOJ takes the von Havenstein route to excess debt resolution).




 Blame the Fed for commodity speculation




$1,200+ Gold is New Normal

 

 

 

 

The Fall of the U.S. Empire and the Breakup of the Geopolitical Matrix

Here's a long interview with Richard Maybury that appeared in a recent edition of The Casey Report...and I'm glad to see that it has finally been published in the public domain, as it's a fabulous read.

Maybury states the following..."There are two big things going on: One is the fall of the U.S. Empire, and that is leading to the second, which is the breakup of the geopolitical matrix. In the case of the latter, I am referring to the many relationships the governments of the world have with each other and with their own people.

This matrix of relationships and political structures are called countries, most of which have existed for a long time, but that's breaking up now, in part because, in most cases, the borders between these countries were drawn a long time ago by people who knew nothing about the local populations.

While the breakup is starting in North Africa, I think it's going to spread across most or all of Chaostan. And it will have effects even in North America and South America. While it's almost impossible to predict exactly how, it’s my view the world that we grew up in is going away, and it will be replaced by some new political matrix.

This is a must read from one end to the other...and the link is here.