Bernanke delivers blunt warning on U.S. debt

[achilles28]

Quote from Misthos:



I can't believe quite a few posters here fell for that testimony. Bernanke is a creature of Wall Street first. He took care of Wall Street, and will do so again when the time comes... just as the Fed helped with LTCM, AIG, Bear, Merrill, the GSEs, and all the former Investment Banks that now get special access to the Fed.

... He basically said that even though Wall Street just got an historical bailout, the peasants now need to expect cuts.

And the peasants cheer him on.

Yep. Right over their heads.

The FED backstopped trillions in Wallstreet/GSE debt. But now, it's tight money for everyone else reliant on social security/medicare/welfare. Sorry!!

The Federal Reserve is owned by Wallstreet Banks. Literally. That's why they get bailouts and we don't. Banks own the Printing Press. Not the American People.

Still, I don't trust bubble boy. Lets see what happens to the 2 and 10 when China walks.

 

[ET99]

Quote from 700express:

Either country pulling the trigger on the other would be pulling it on themselves as well. As it is right now, both countries are very reliant on each other, despite what the media tries to tell you.

(Hint: back it up with something).

 

[700express]

Quote from ET99:

(Hint: back it up with something).

Here's a pdf that explains some points quite well, for starters.

http://www.google.com/url?sa=t&sour...ZQQ_Ur25zNn83MD-A&sig2=XTjzcgaZzVTz2EidAs3HCg

"But now the game has changed. A collapse of the U.S. would leave China devastated. Not only would Beijing lose its main customer, but the hundreds of billions of dollars' worth of treasury notes it has accumulated would be rendered worthless. If China were internally stable, such impacts could be absorbed with difficulty. But in light of China's own simmering social and financial predicaments, a U.S. collapse would almost certainly be enough to tip Beijing's economy into a tailspin, resulting in both social and political crises.

A collapse of China would similarly devastate the U.S. Obviously, the loss of a source of cheap consumer products would discomfit WalMart shoppers, but the shock soon would go much deeper. The Treasury would lose its main foreign buyer of government debt, which means that the Fed would be forced to step in and monetize that debt (in common parlance, "turn on the printing presses"), undermining the dollar's value. The result: a hyperinflationary economic crash. Such a crash is probably inevitable at some point anyway, but a collapse of the Chinese system would hasten and worsen it."
from: http://www.postcarbon.org/article/67429-china-or-the-u-s-which-will

 

[luckyluciano]

I am from Canada and I mean no disrespect to ET members but I been watching financial events unfolding. All the while, ET members attacking their elected politition's intelligence as they knew how to run the government better. I keep asking myself, can these polititions really be this clued out and ET members be that much smarter? I am not being sarcastic, I really am observing this forum in amazement. For the most part, I agree with ET members on fiscal responsibility but I keep wondering if this is part of the game which has been in place for decades now. Governments can never be fiscally responsible because the have to make too many people happy. These financial woes have always been with us and will never go away especially inflation, it's part of our make up. This is why my parents first house was $23,000 40 years ago and now that same house is $400,000. Maybe I am wrong an ET's members are smart or maybe Government debt and deficits have always been with us and they only seem worse in an economic slowdown.

 

[ET99]

Quote from 700express:

Here's a pdf that explains some points quite well, for starters...

you are not so naive, are you ???
you think I am going to click on that link ??? and read that article ???
at best you will have
fascist propaganda with nil substance
at worst it is a waste of time
lesson #1: don't believe anything you read from the web at face value.
(including my posts)

 

[Scataphagos]

Quote from luckyluciano:

"... Maybe I am wrong... or maybe Government debt and deficits have always been with us and they only seem worse in an economic slowdown.

"Destruction by debt" has always been the history of civilized man. Early in America's history, some attempts were made to work within a balanced budget... sometimes successful, sometimes not.

It's a greed thing... the appeal of "something for nothing". Problem is that people don't realize that while they get a little something-something in the short run*, in the long run THEY LOSE EVERYTHING! Debt is ALWAYS accounted for by someone.

* may last a few decades, but at some point the debt goes parabolic and out of control.... then, wipeout. History books are filled with HUNDREDS of examples.... and not a SINGLE EXAMPLE of a country or regime "printing its way to prosperity". Yet, we apparantly are unable to act in such a way as to prevent our own destruction.

Thanks to the internet and Fox News, we now learn almost real-time of Congress' and The Adminstration's abuse of our public purse... and knowing full well that the faster they pile on the debt, the sooner our day of reckoning... those of us who have anything are becoming more and more fearful.

 

[luckyluciano]

Isn't the printing of money the main cause of a house going from $25,000 to $400,000 in 40 years? Also, a n income of. $5,000 per year increasing to $40,000 for the same work performed over 40 years? The economic world did not end then, so why would it end now?

Quote from Scataphagos:

"Destruction by debt" has always been the history of civilized man. Early in America's history, some attempts were made to work within a balanced budget... sometimes successful, sometimes not.

It's a greed thing... the appeal of "something for nothing". Problem is that people don't realize that while they get a little something-something in the short run*, in the long run THEY LOSE EVERYTHING! Debt is ALWAYS accounted for by someone.

* may last a few decades, but at some point the debt goes parabolic and out of control.... then, wipeout. History books are filled with HUNDREDS of examples.... and not a SINGLE EXAMPLE of a country or regime "printing its way to prosperity". Yet, we apparantly are unable to act in such a way as to prevent our own destruction.

Thanks to the internet and Fox News, we now learn almost real-time of Congress' and The Adminstration's abuse of our public purse... and knowing full well that the faster they pile on the debt, the sooner our day of reckoning... those of us who have anything are becoming more and more fearful.

 

[piezoe]

What else could gentle Ben have said. Just imagine what would happen if he had come right out and said: "don't worry too much about the deficits. They are too high and they need to be brought down, but we will be able to monetize much of the debt, and that should help a lot."

Of course the debt will be monetized. It is naive to think otherwise. It will be virtually impossible for the US to pay this debt either by increasing productivity or direct taxation. It will be very helpful if the US could manage to decrease both its military and medical expenditures dramatically in coming years. But even then substantial portions of the debt will be monetized. Rest assured of that.

Just as the Treasury secretaries consistently say they have a strong dollar policy while acting in the opposite way, so too the Fed Chairman must always publicly take a stand against monetization, knowing all along that that is the only way multi-trillion dollar debts can be dealt with.

 

[Scataphagos]

Quote from luckyluciano:

Isn't the printing of money the main cause of a house going from $25,000 to $400,000 in 40 years? Also, a n income of. $5,000 per year increasing to $40,000 for the same work performed over 40 years? The economic world did not end then, so why would it end now?

In the history of a currency's debasement, a society is able to "handle" a 100:1 devaluation if the process is slow enough. (By some estimates, the $USD has lost 99% of its buying power since the creation of the Fed in 1913... THANK YOU ASSHOLE WOODROW WILSON!... others say it's lost "only" 95%).

Our "print-money" policies haven't gone parabolic just yet... may be close at hand. When ours goes parabolic, there will be no way for people to keep up any semblance of their buying power... resulting in bankruptcy for all but the richest Americans. The richest may not be bankrupted, but they will feel as though they have.

 

[luckyluciano]

[

I see those with assets getting wealthier as they always have while those with cash getting poorer as they always have and those with neither hoping and striking to get a raise to keep up.


QUOTE]Quote from Scataphagos:



In the history of a currency's debasement, a society is able to "handle" a 100:1 devaluation if the process is slow enough. (By some estimates, the $USD has lost 99% of its buying power since the creation of the Fed in 1913... THANK YOU ASSHOLE WOODROW WILSON!... others say it's lost "only" 95%).

Our "print-money" policies haven't gone parabolic just yet... may be close at hand. When ours goes parabolic, there will be no way for people to keep up any semblance of their buying power... resulting in bankruptcy for all but the richest Americans. The richest may not be bankrupted, but they will feel as though they have. [/QUOTE]