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Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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June 10, 2013

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PERPETUAL DEBT
By Monty Pelerin

As a result of its profligacy, government is no longer able to sustain itself.  That is the real reason for the Fed’s quantitative easing program(s).  Taxes and traditional government bond sales no longer provide enough money to run the monster.  QE, more properly described as counterfeiting, is a euphemism to disguise the insolvency of the government.  Without the Federal Reserve, government would have to pare down dramatically.  There is not enough money to meet the levels of military spending, social spending, entitlements, debt service and other commitments.

QE was sold as a basis for stimulating the economy.  While that may have been a consideration, it wasn’t as important as pretending the government was not bankrupt.

Government is now hopelessly indebted.  It cannot honor its current debt obligations and social promises.  Additional debt is issued to cover the debt service on existing debt.  This practice is the equivalent of borrowing against your Visa card in order to make an American Express payment.  It works for a short period, but it reflects the debt death spiral that has overtaken government.  As Herbert Stein intelligently observed: “something that cannot continue will not.”

An economic Armageddon is coming.  It is up to government whether this shows up in the form of fire (massive inflation) or ice (a collapse of the economy).  Regardless of what the entry phase looks like, the ending is a massive Depression.  The problem is beyond governance or economics.  Mathematics has assumed control and mathematics is cold, unemotional and relentless.

Government is insolvent.  It will ultimately dishonor many of its obligations.  The longer it postpones this reckoning, the bigger the defaults will be and the greater the pain.