Both restructuring and monetization are equivalent to a default. The total outstanding stock of debt (Government + private + commercial) is so huge (~60 Trillion), the carrying cost is like a millstone tied around the economy's neck. At an average interest rate of 3% - over 12% GDP goes to cover interest costs, alone. Ron Paul is right. A massive deleveraging that shrinks total money supply needs to happen. This is what's meant by, 'clean out the bad debt'. Western economies naturally want to contract and deflate to correct for the overinvestment and indebtedness accumulated during the housing run-up. Private credit demand isn't there to offset the loans being paid back now (simply because individuals and corporations borrowed too much to begin with!). It's really a debt ponzi scheme and it's done. Popped. Holding it up with Government borrowing only hastens a currency demise which implodes the savings of the bottom 50% and reduces to poverty everyone who isn't fully vested in stocks and real estate. I would wager that's roughly 70% of the population. What's better? A hardcore, 1930's style depression for 2 years? Or Argentina? Mass civil unrest, rioting, gangs on the streets and a rollback to 2nd world living standards? There's no easy solution at this point.
Wallstreet and their media apologists tout Keynesian fixes when Keynesian economics hasn't been practiced since the late 70's, under Volker. Keynes advocated low rates and deficit spending during recessions and high rates and surpluses during booms, to moderate the business cycle. Instead, politicians and bankers perverted Keynes and never allowed high rates to clean out the malinvestment from the prior boom. So what we have now are a legion of banks and home owners, desperately clinging to Government deficit spending to keep their underwater balance sheets afloat, that otherwise simply shouldn't exist. All this debt ought to be liquidated. Wrote off. Destroyed. Money sustains business and when that credit evaporates and ceases to exist, the businesses dependent on that credit meet the same fate. This is the natural course of things and needs to happen. Otherwise, we'll end up propping up useless finance guys and burger flippers in their mansions until the dollar implodes, and then we'll all be toast. What's the point of that? Better to sacrifice the useless fuckers now then let them take down the Dollar....and us with it.
Look at Greece. They destroyed their drachma. If they get kicked out the Euro, their pain will be incredible, albeit short(er) lived (2-3 years). If Bankers and their apologists get their way and force a run on the dollar to save their ass, America gets turned upside down. Realize, all this talk of inflating debt away, only helps the Bankers and finance guys. This is the only monetary avenue that will save their own ass. The alternative - credit destruction and deflation - wipes out >70% of the FIRE industry (Financial, Insurance, Real Estate). That's why Bankers, finance gurus, Wallstreet types, and their media apologists tout debasement and debt inflation all day long. It's us or them. Sacrifice the Bankers and take our licks. Or blow apart the dollar, throw the masses into the caldron, and let the Bankers rule over us. That's what it comes down to.
Wallstreet and their media apologists tout Keynesian fixes when Keynesian economics hasn't been practiced since the late 70's, under Volker. Keynes advocated low rates and deficit spending during recessions and high rates and surpluses during booms, to moderate the business cycle. Instead, politicians and bankers perverted Keynes and never allowed high rates to clean out the malinvestment from the prior boom. So what we have now are a legion of banks and home owners, desperately clinging to Government deficit spending to keep their underwater balance sheets afloat, that otherwise simply shouldn't exist. All this debt ought to be liquidated. Wrote off. Destroyed. Money sustains business and when that credit evaporates and ceases to exist, the businesses dependent on that credit meet the same fate. This is the natural course of things and needs to happen. Otherwise, we'll end up propping up useless finance guys and burger flippers in their mansions until the dollar implodes, and then we'll all be toast. What's the point of that? Better to sacrifice the useless fuckers now then let them take down the Dollar....and us with it.
Look at Greece. They destroyed their drachma. If they get kicked out the Euro, their pain will be incredible, albeit short(er) lived (2-3 years). If Bankers and their apologists get their way and force a run on the dollar to save their ass, America gets turned upside down. Realize, all this talk of inflating debt away, only helps the Bankers and finance guys. This is the only monetary avenue that will save their own ass. The alternative - credit destruction and deflation - wipes out >70% of the FIRE industry (Financial, Insurance, Real Estate). That's why Bankers, finance gurus, Wallstreet types, and their media apologists tout debasement and debt inflation all day long. It's us or them. Sacrifice the Bankers and take our licks. Or blow apart the dollar, throw the masses into the caldron, and let the Bankers rule over us. That's what it comes down to.
