The Balance of trade hole just keeps getting deeper...but let's back up a bit and start near the beginning: As we warily eye the arrival of March 2-9 (which is just 49 days away) we can't help but notice that president Obama is asking Congress to up the federal debt limit by more than a trillion dollars. $1.2 trillion to be exactly and this starts a two week period of much gnashing of teeth in Washington. A trillion here, a trillion there, and pretty soon you can buy governments.
At the same time, working on the other side of the balance sheet, the Obama administration is proposing the combination of some agencies in order to shrink the expense line.
We're keeping a close eye on this because in predictive linguistics this looks like one cornerstone of the crapstorm to come in March since looking back at language in the period, from the perspective of where language is heading by fall, it looks like we could see an implosion of US dollars, which might result from a sequence like this:
- Congress quibbles for two weeks and is then unable to agree to cuts, what this being an election year and all...
- The president then raises the debt limit.
- Then Europe finds that as we get into February that it's not really going to find enough people to pull the wool over their eyes, so they start hitting the credit markets with gobs and oodles of freshly minted paper debt.
- But then, shortly after, having hit the debt limit, the US goes out and starts having to also issue tons of paper...
- And all this paper hits the market, demand for buyers of debt goes through the roof - and that forces interest rates up.
- At some point, the analog to yelling "Fire!" in a crowded theater occurs as someone bright-eyed bastard tallies up global borrowing demand (which will be going seriously nonlinear by this point) and then...
- The U.S. is forced (as a last-gasp effort) to devalue the US dollar in order to make the debt look better...but that then...
- Instantly this doubles the prices of gold, silver, oh...and food and other commodities valued in US dollars, too...real estate doubles overnight, too...
- And seeing that there's no instant adjustment to Social Security and to things like the educational system's favorite crack-like drug (student loans) colleges and universities start their cutbacks....
- And all this happens right when a fresh round of foreclosures start to hit the real estate market...which saves some banker butt again...
- And US troops coming back from the sandbox then get flipped into crowd control and other duties related to "helping" local law enforcement, since everyone will be getting rowdy along about here because food prices will be going through the roof....
Granted, that's just a broad brush of how things COULD work out, but we see evidences here and there that this just might be the course ahead and the old Chinese saying is "If we don't change course soon, we're likely to arrive where we're now headed..."
Just because the weekly M1 money creation rate is 18 percent year on year and M2 is up 9.8% doesn't mean inflation is imminent. In fact in the latest three-months annualized window, M1 is down to 4.5% and M2 at 4.1%...so we shall see if the monetary version of stepping on the gas and the brakes at the same time will work. Though we'd mention that it's hard on brakes (and people) but that's the breaks, so to speak.
Unfortunately, the whole dirty underside of capitalism starts showing when we start becoming aware and understand that planned obsolescence is a necessity in the current Western business model because without it, the powers that be lose their power and with it...their money. So yep, there's a kind of conspiracy that's never acknowledged by the paradigm defender class, but which is leaking out into the mass consciousness through documentaries like "Pyramids of Waste/ The Lightbulb Conspiracy" which does a fine job of dissecting the problem. And there's evidence of this "planned problem" approach to the economy everywhere, allegedly including the nuclear industry, but I digress.
All this leaves us wondering what prices are doing here lately, what would they do if we didn't make products which were crap, and we all had a lot more time off.....
The Big Picture
What's driving all this is evident when you look at government funding - such as came out in yesterday's monthly Treasury Statement:
Oh, and for the month of December - just a little number to ponder - the about of individual income taxes paid was $112.952 billion while the amount of corporate income taxes paid was $51.51 billion. And (fiscal) year to date individuals have ponied up $270-odd billion versus $55-odd billion for the corps...which "shows to go you" (sic) what can happen when you can buy friends in Washington thanks to the corporate supporting Supreme Court decisions which make corporations more than humans when it comes to rights....(and tax breaks.)
Balance of Trade Wreck
If you're thinking "This means we have to borrow from foreign sources to make ends meet, right?": Hand that reader a gold star. Here's the latest on the Balance of Trade fresh off the Census Bureau site:
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total November exports of $177.8 billion and imports of $225.6 billion resulted in a goods and services deficit of $47.8 billion, up from $43.3 billion in October, revised. November exports were $1.5 billion less than October exports of $179.4 billion. November imports were $2.9 billion more than October imports of $222.6 billion.
If you're thinking "This can't go on forever, can it?" The answer is "It has so far..." Chart, please?
No change expected for the December numbers, either, but we won't find those out until February about mid month...
Dow futures are down a tiny bit. Markets are running out of time in their January peak period to put on a good rally. So, is a fifth wave (upward) failure about to spell the start of the Great Slide? And who cares? Who's got money left to gamble with? Which gets us to the casino after-action report...
M.F.'d Continues
Remember those farmers and commodity owners who got screwed to the wall because the MF Global debacle was filed as a securities bankruptcy instead of a commodities deal? Well the MF'ing continued Thursday as the "trustee" told the real investors no more transfers of money to the segregated account holders is planned for the immediate future.
And still no one in jail. My, makes me want to be a political suck-up fraudster because so far it seems to come with a "Keep out of jail" card printer...
Can some apologist for the crooked bankster class explain to us, please, what the point of "segregated funds" is supposed to be protecting here?
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