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Tuesday, July 05, 2011

Kicking the Can into the Cul de Sac

We are witnessing moral hazard over the top, the acceptance of the most dangerous risk. The objective is not remedy, but rather retained power by the banksters. No solution is even pursued. Too Big To Fail ensures no serious attempt to deal with the problems, no meaningful policy to encourage recovery, and a sinking toward systemic failure. Kicking the can into the cul-de-sac.
If QE is halted, then short-term yields rise and long-term yields rise. The result is a doubled borrowing cost for the US Govt debt. Not gonna happen! Inflation as policy will rule!!
The new US Economy cannot recover unless its housing market rebounds and revives. Housing was allowed to replace industry in function. Property prices need to fall to around 30% below construction costs. Housing is not a productive engine. Economies are not built on housing. Real value is not added by property. All is notional. Pricing action is prevented, hijacked, distorted, manipulated, abused.
The US economy needs to be re-industrialized, a process not even begun, not even considered.
Kick the can. Its a futile, boring job, but the rest of us are all in this together. Our Masters will not give up any of their ill-gotten power that we gave them.
Kick the can.
Kick that can.
Kick yourself.
Posted by pardonme at 7/05/2011 02:56:00 PM

Back in 2009...

Surmising the Americans cannot have a recovery and a truly strong dollar at the same time. As recovery gathers pace the only direction for interest rates is up (inflationary). Major currencies have been and still are competing for weakness. Quantitative easing devalues a currency, but this must still continue until jobs become self-generating. The ongoing carry trade will not suddenly decide to control itself, the supporting short-term interest rate differentials need to reduce, but how? World population is increasing by over 217000 per day (GeoHive). It is apparent that the smart money is looking for safety (+ growth) in gold and for investment in essential commodities. Gold is still the safest alternative for preservation of buying power going forward. Even when (if) the recovery commences there will then be inflation. The balance of sentiment of the carry trade operatives is controlling day-to-day market direction. Most of the mountain of money that shifted to bonds is still waiting to return to equities and is increasingly frustrated with negative real growth (less risk averse).

October 2010...

Slowly, slowly the impending future unfolds before us and the unwanted days of further reckoning draw ever closer.
A most unprecedented experiment is being played out, from which some may prosper, but many many more may become truly desperate and multiply the numbers of those that are indigent. The stakes are perilously high.
There is no choice here, QE is not optional - it is the only hope left for manageable peace during the passage.
This bid for reparation for the endless wrongful acts of the past generations of American leadership has absolutely no guarantee and affords only hope for a successful outcome against heavy odds.
This hope is almost analogous to a religious belief of everlasting life except that the beneficiaries are not intended to be restricted to the unquestioning and fearful or otherwise indoctrinated faithful.
Should we pray?