B4 The Bell Weak-end Den, August 21-22

[Guest]

Butters -- I'm surprised it isn't higher.

 

Eddie -- couldn't disagree more. Kerry wins any discussion on Vietnam against the pampered coward. The Shrub administration really stepped into it this time -- just shows how desparate they are becoming.

Kerry's service record is a distraction. The bushman loses on all the important issues so the only thing he can do is get the media to help him keep Kerry off topic and defending himself. All Kerry has to do is stay focused and let the media frenzy burn itself out. If you remember, the bushman's wingnuts tried the same thing earlier using hyped lies about Kerry's love affair with an intern. It has gotten so bad, that I doubt if anything coming from the bushman's administration is even close to the truth.

[Jorma]

The first and last thing to know about Vietnam and the politics of war is this.

 

In Feb 73 Nixon signed the Paris Peace Accord which was for all purposes the same accord which was on the table the day he took office in 69. To wit, the NVA was allowed to remain in the South. (After that little else mattered)

 

 

Nixon crushed McGovern in the 72 election. McGovern to this day is held in high contempt by most as being a starry eyed weakling liberal. Why? For saying he would end the war, on you guessed it, the terms Nixon did 3 moths later.

 

Voters like war. It's a winner politically, uinversally. Well not in Europe or Japan anymore. They had enough.

 

PS

Nixon spent WWII on a supply ship in the Pacific where he never saw a shot fired in anger. He did, relentlessly, seperate his shipmates from their pay by winnnig at poker, like a good Quaker boy

 

McGovern flew 50 missions, the max, over Europe.

[stained jeans]

Disagree, Col. Shrub's only winner is national security and his role as Commander-in-chief. I say Kerry scores BIG here.

[Hiding Bear]

Here is something I posted elsewhere today...kinda where I am at regarding economic thinking this minute...subject to change after dinner....

 

The recent decline in the stock market did not bring rates down enough to create that significant stimulus to the economy from refinancing the way it did before. There is a limit in my view how low rates can go without the low rates being accompanied by significant economic problems. Right now we are seing the Fed in the process of raising rates and the M2 not doing too well. My concern is that outcome will be a reduction in credit. I don't know where it will come from or how it will manifest, but I've been looking for some failed financial transactions or a general tightening up of lending criteria. Fortunately for the US the foreigners continue to buy our debt, but I did note that a poster indicated that there were no foriegn buyers of T-bills at the last $23 billion auction (subject to verification).

 

Given the huge new debt requirements by our government and a declining economy, I would say that we are near a nexus point for the support we are getting from abroad and with a tightening of credit the weak cracks in the financial structure will begin to be exposed. I kinda like to think of the Fed raising rates as the crack in the dam's wall where trickles of water comes through.....

 

The Fed has to do something to get rates up to at least neutral....but in doing so they will slow the economy going forward. The timing of this is bad as the economy is already showing signs of a slowdown. My guess now is that the rise in gold will foreshadow the ultimate decline in the US economy and the reduction in money going to buy US debt. Savers around the world will have to put their money somewhere and Gold should be one of the winners.

 

Added to that argument is the potential for a decline in the dollar if there should be a clear crisis that erupts from the change in attractiveness of the US debt. The Fed will have to somehow inject a lot of money into the system to pay for the debt requirements or let interest rates skyrocket to potentially disasterous levels. My bet is that they try to inflate the economy, but if they cannot get ahead of the curve the real estate market will collapse and a deflationary depression will commence....

 

Best wishes....

I pretty much agree with your thoughts, as Pee brain said earlier - you cannot spend or borrow your way to prosperity. In fact the hyperinflation of the early twenties Germany caused ever lower living standards for most Germans - except the elite which could secure credit and borrow at low inflation adjusted interest rates.

 

The foriegn central banks have switched lately from their traditional move of acquiring T bills first to instead buying longer Treasuries - in an attempt to coveting support the bond market. Actions speak loud here - these central bankers are back tohelping the US$ because of fears of a world economic slowdown.

 

The large trade deficit was no fluke - demand for US products is declining and they do not want to also see US demand for goods decline.

[Hiding Bear]

Screw the statists for all they're worth. This is not a game.?

Well done.

 

What will US$s in a bank or broker be worth in the aftermath of a financial panic?

 

The Fed is on the road to madness....Inflation acts as a hidden tax and redistributes the pain of rising energy prices from specific groups (mortgage payers) to all holders of dollars.

 

 

the FED and inflation punish savers and reward spendthrifts and borrowers. for the past few years, negative real rates have been eroding the purchasing power of savings and really creaming those that can least afford it - fixed-income retirees. just remember: borrowers do not control their own destiny, so as the world's biggest debtor, we are dependent upon others. the most comical occurrence in the past month are reports that Argentina, that bastion of fiscal prudence, has been using their confetti to buy Gold - if only we were as wise - is that weird or what?

 

you cannot spend or borrow your way to prosperity, although ive been saying it for a couple of years and have been wrong so far.

 

Icky, im still holding my own against Andy Gravity and i dont take any mind-altering drugs, other than Expresso.

Yep - spendthrifts are winning at the expense of savers. A very deliberate strategy to assist a very critcial group that maintians the credit bubble - home owners - at the expense of largely older persons with bank savings.

[Butterfield 8]

I have a pretty good guess where Shrub was that summer he disappeared - he was drying out. I know a guy who was at Yale the same years. Said he was drunk on Jim Beam by 10 every morning. Flunked out his first year and Pop bought him the degree.

[Hiding Bear]

Whether they succeed or act in time to stop the implosion of the credit bubble is not clear at this time.? The reality of 10 weeks of stagnant money supply growth is that the Fed is coming closer to losing a battle it may not clearly understand.? Foreign central banks seem to understand the implications clearer and have greatly stepped up purchases of US$s.

I certainly don't understand the intricacies of monetary policy as well as you (and I appreciate the edumacation very much), and so I hold onto a Hypertiger-like view that can be put forth in a single question:

 

"Can credit increase exponentially, forever?"

 

If you suspect that the answer is "No", as I do, then you must also face the fact that sooner or later all the wheels are going to fly off of Al's magical mystery bus and the much-vaunted US economy is going to plunge through a guardrail and meet its destiny with an 800 foot deep ravine.

 

Because that's what this game is about, isn't it? Continually increasing credit?

 

Fractionless reserve banking requires continual credit expansion. Credit is always offered at interest. To pay the debt back, money must be obtained from an ever expanding pool of money lest the money supply shrink and trigger a collapse of credit and modern banking.

 

Unfortunately, such fiat money itself is but a claim to resources and as resources stagnate or shrink, it is 100% inevitable that said resources will increase in price. Necessitating ever larger increases in credit ("money") to pay for it all.

 

So I am quite intrigued that you think Fed monetization of resources may have begun. Vellllly intellesting.

 

Beyond that, all the recent manipulating and intervening by CB's strikes me, as you say, as a quite desperate set of measures attempting to forestall the inevitable.

 

And they will grow more and more desperate, and obvious, until the POR hits.

 

Which, unfortuantely, is an unknowable moment in time.

 

If it takes a hundredth monkey, I suspect we have about 50-60 of them lined up. Not quite there yet.

 

My guess? 2005 to 2006 for dawning awareness (an 'event' could speed things along greatly though) with full blown awareness a virtual guarantee by 2010 (when entitlements meet the baby boomers for the WWF "match of the century").

 

Regardless, whenever the POR does hit, our foreign bagholders, er, I mean allies, will leave us in droves at the same time that gubmint cash needs are skyrocketing. Then the unvirtuous cycle will take root: higher financing needs --> higher interest rates --> higher financing needs ---> etc, etc., etc --> US default.

 

It will be such a rude awakening, if I were in the gubmint, I would immediately begin a program of getting the masses used to blind obediance and a police presence as the social unrest could make things a bit rocky for those responsible.

 

Oh. wait ....

Can credit increase exponentially forever? No. Eventually all efforts to create monetary expansion by fiat will end in failure. Any numer of things could throw attempts to reinflate off track. The deflationary scenarios of yobob and hypertiger are not long shots but a possible unexpected outcome of natural or man made disasters - or a functional banking systme failure. However the US is in a special position now where, if foreign governments are willing to help, can essentially maintain some level of prosperity for up to a few years more by living off the savings of the rest of the world.

 

When foreign central banks buy US$s with local currency, they are transferring the wealth and savings of their country to the US. We can be thankful that in Japan for instance, there is a large number of people still accumulating savings.

Due to demographics of an aging population, this will not last many years longer.

But for now, the Fed and Treasury have sucessfully manipulated foreigners to stabilize the dollar and bond markets.

[Hiding Bear]

It wasn't enough, having the New York Times claim that runaway oil prices stimulate the economy.

 

No-o-o-o-o-o, 'they' had to take the next step and claim that runaway oil prices are good for BONDS too:

 

"The higher the oil price goes, the greater the impact it will have on the economy, and the better for the bond market,'' said Marc Seidner, 38, who oversees $21 billion of bonds at Standish Mellon Asset Management in Boston.? ? ? ? ?

 

"Higher oil prices have a contractionary influence on the economy,'' said Eric Hiller, head of interest-rate strategy at Bank of America NA in Chicago. "If we manage to stay below $50, it's bad for the bond market. If we go through $50 in a resounding fashion, it's great for the bond market.''

 

That's right, GRRRRRR-EAT!

 

Why next thing ya know, the Matrix will be telling us that costly oil cures bunions, impotence, and the pain of childbirth ...

Perhaps you haven't yet tried snake oil - it's good for all sorts of ailments and the consumption too!

[Jimi]

The first and last thing to know about Vietnam and the politics of war is this.

 

In Feb 73 Nixon signed the Paris Peace Accord which was for all purposes the same accord which was on the table the day he took office in 69. To wit, the NVA was allowed to remain in the South. (After that little else mattered)

 

 

Nixon crushed McGovern in the 72 election. McGovern to this day is held in high contempt by most as being a starry eyed weakling liberal. Why? For saying he would end the war, on you guessed it, the terms Nixon did 3 moths later.

 

Voters like war. It's a winner politically, uinversally. Well not in Europe or Japan anymore. They had enough.

 

PS

Nixon spent WWII on a supply ship in the Pacific where he never saw a shot fired in anger. He did, relentlessly, seperate his shipmates from their pay by winnnig at poker, like a good Quaker boy

 

McGovern flew 50 missions, the max, over Europe.

Stephen Ambrose appeared with McGovern on the News Hour one evening, and asked Jim Lehrer whether he knew the story about McGovern landing his troubled bomber.

 

"No."

 

Ambrose launches into this stoy about how during one of their bombing missions, McGovern's bomber was hit. He tells his crew that they can bail out over water and take their chances, or he would try to make for a small island near Italy with an itty-bitty airstrip. All his crew wanted to stick with him, even though they knew that the airstrip was not built to accomodate a B-52 or whatever giant bomber they were flying.

 

They approach the island and they can see the wrecks of other airplanes at the end of the airstrip, which abruptly ended in a mountainside or something, where other distressed pilots had taken their chances and failed.

 

Imagine.

 

McGovern hits the airstrip at its earliest point and skidded to a halt feet from the mountainside. They all survived.

 

Yeah... jst another real liberal pussy, that guy.

[traderfromhell]

The first and last thing to know about Vietnam and the politics of war is this.

 

In Feb 73 Nixon signed the Paris Peace Accord which was for all purposes the same accord which was on the table the day he took office in 69.  To wit,  the NVA was allowed to remain in the South.  (After that little else mattered)

 

 

Nixon crushed McGovern in the 72 election.  McGovern to this day is held in high contempt by most as being a  starry eyed weakling  liberal.  Why? For saying he would end the war, on you guessed it, the terms Nixon did 3 moths later.

 

Voters like  war.  It's a winner politically, uinversally.  Well not in  Europe or Japan anymore. They had enough.

 

PS

Nixon spent WWII on a supply ship in the Pacific where he never saw a shot fired in anger.  He did, relentlessly, seperate his shipmates from their pay by winnnig at poker,  like a good Quaker boy

 

McGovern flew 50 missions,  the max, over Europe.

Stephen Ambrose appeared with McGovern on the News Hour one evening, and asked Jim Lehrer whether he knew the story about McGovern landing his troubled bomber.

 

"No."

 

Ambrose launches into this stoy about how during one of their bombing missions, McGovern's bomber was hit. He tells his crew that they can bail out over water and take their chances, or he would try to make for a small island near Italy with an itty-bitty airstrip. All his crew wanted to stick with him, even though they knew that the airstrip was not built to accomodate a B-52 or whatever giant bomber they were flying.

 

They approach the island and they can see the wrecks of other airplanes at the end of the airstrip, which abruptly ended in a mountainside or something, where other distressed pilots had taken their chances and failed.

 

Imagine.

 

McGovern hits the airstrip at its earliest point and skidded to a halt feet from the mountainside. They all survived.

 

Yeah... jst another real liberal pussy, that guy.

Compassion and courage are not mutually exclusive Jimi.