David Galland: The System Is Coming Unglued

I didn’t coin the phrase “Greater Depression,” that was Doug Casey, my partner; and I think Doug had it exactly right. I think, you know, there has been so much of a, as I’ve said, this sort of rising tide of bad policy and extreme spending and a takeover of the economy – and not just the US economy, but all of the economies by these governments, the nation-states – that things have reached the point, people tend to think that things are going to stay the same and continue as they are, but they don’t. Sooner or later, history shows over and over again, things break, systems break, and I think we are very close to that. There is never a good time to fix this kind of a problem. So politicians will always make the choice to not actually address the problem, but rather to leave it to the next person’s watch. This isn’t – this would be a horrible time, absolutely a horrible time to fix the problems that face the American economy. Slashing the deficit, slashing the debt, slashing the government spending at this point would have catastrophic consequences to the average person. There would be riots in the street; but if you don’t fix it now, when do you fix it? Okay, well, do you fix it in the next year? No. Do you fix it the year after? The government will do whatever it can to keep pushing this down the road, but they can’t push it down the road much further.

 

 

Senate Attempt To Block Debt Ceiling Increase Fails: Debt Target Is Now $15.2 Trillion, Or Over 100% Of GDP

Earlier today we observed that absent immediate action by the House and Senate to enact the critical $500 billion debt ceiling expansion, the US would run out of Keynesian dry powder as soon as Monday. There is no longer a need to worry. According to the Hill, an attempt to sabotage the bankruptcy of America has failed after a Senate resolution to disapprove the $500 billion debt ceiling increase proposed by Mitch McConnell was voted down 45 to 52. As a reminder, "Under the debt-ceiling agreement reached in early August, the Obama administration was authorized to immediately raise the debt ceiling by $400 billion. Another $500 billion increase was authorized this month, although that could have been blocked if both the House and Senate approved resolutions expressing disapproval." The opportunity cost of passing the bill would have been an additional 10 hours of work tomorrow for the Senatorial millionaires for whom insider trading is legal: "Earlier in the day Senate Majority Leader Harry Reid (D-Nev.) threatened to hold the Senate open for up to ten hours on Friday to "dispose" of the resolution if it moved forward." As a result of this vote, a parallel bill in Congress is now moot even though it has not been voted on. This effectively greenlights the increase of the US debt ceiling from the current $14.694 to $15.194 trillion, or roughly 101% of GDP.

Goldman's Take On Obama's Jobs Proposal: "Larger Than Expected"

BOTTOM LINE: The President’s proposal is larger than expected, with spending proposals and tax cuts both somewhat greater than expected. This proposal does not imply a significant shift in the fiscal restraint in 2012, but it is consistent with our expectation that the payroll tax cut will be extended, and the fact that some of the new proposals involve additional tax cuts increases the probability that Congress will enact them.

Jobs, Puppy Dog Eyes, Buffett, China And Operation Twist

So, will this jobs bill do much? I don't see how. Employers get a tax break, but that will likely be used to increase profits, because they remain uncertain of what happens when the breaks end. No new jobs, and limited new spending. For the employees - he said an average of $1,500 next year extra in their pocket. Interesting but when he talks about cutting medicare and social security in the same speech, how much of that will be spent? I think a lot of that will go into savings to offset future needs. People making 50k a year aren't so dumb to just take this money and spend it, when they see future benefits getting stripped away. The $4,000 tax credit for hiring new employees covers about 14 weeks at minimum wage (the sort of job this economy has been able to generate). Maybe we will see a spike in layoffs ahead of that since it might be a good time to get rid of employees on the fringe, when you can get a free look at his replacement, courtesy of the government.

Obama's Speech: Ali G Style

What the hell: this is no longer even a Banana republic. We are now officially an Onion republic. So let's party like it's an Onion republic.

In The News Today

September 8, 2011, at 8:00 pm
by Jim Sinclair in the category In The News |  Print This Post |  Email This Post

Jim Sinclair’s Commentary

So far John Williams is the only person who agrees with me on the Swiss Franc.

"It is highly unlikely that the SNB really wants to destroy the franc or to disrupt Switzerland’s long history of fiscal prudence. If they wanted to do that, they would have joined with the euro a long time ago, and now would be suffering the same trials and tribulations as the Bundesbank in the euro crisis.  Instead, as has happened at other times when the franc has been “too strong,” short-term action has been taken to psych-out the markets, to discourage those wanting to hold francs.  Intervention against market demand, however, as is required here, quickly becomes extremely expensive and disruptive to the intervener’s financial system.  Accordingly, the quasi-franc-euro-fix should prove to be short-lived, and the SNB knows that." –John Williams of www.ShadowStats.com

20% Of Total California System Capacity Falls Off The Charts

A glitch in the sinusoid matrix?

Meanwhile In San Diego...

... Keynesianism is already having an effect after all 1.4 million customers of SDGE are currently without power. We expect the president to announce he will rebuild all the lost electricity any minute now. We also expect half the S&P will blame their missed earnings on the "Great SoCal blackout of 2011"

San Diego Power Outage Update

No, it's not some zombie Enron coming back from the graveyard behind Chapter 7 court. Nor is it the terrorizers. It is just some downed powerlines. However for anyone dumb enough to wish to take advantage of the chaos and immigrate: sorry, the border is running on backup generators.

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