Patterico's Pontifications

11/8/2012

The Coming Crash of the Government Debt Bubble

Filed under: General — Patterico @ 7:34 am

Every major crisis we have had in the last 25 years was easy to see coming. Each time, you had a phenomenon that was clearly out of kilter. It seemed wonderful on one level: everyone was getting free money. Everyone knew that it couldn’t go on forever, but somehow it seemed like it might, so nobody really seemed very worried. And then the crisis came, as we knew it would.

First there was the stock market crash. In the 1990s, stocks kept going up and up and up. It seemed wonderful on one level. Everyone was watching their stock holdings grow and grow and grow. Everyone knew it couldn’t go on forever, but somehow it seemed like it might. So nobody seemed very worried.

And then there was a crash.

Then we had the real estate bubble. In the 2000s, property values kept going up and up and up. It seemed wonderful on one level. Everyone’s house value was skyrocketing. You could take out loans on the equity and do fun stuff. Everyone knew it couldn’t go on forever, but somehow it seemed like it might. So nobody seemed very worried.

And then there was a crash.

Now we have the government debt bubble. Government spending keeps going up and up and up. It seems horrific to us, because we are paying attention — but to most people, frankly, it seems wonderful. We’re getting all these government services and we don’t have to pay for them! It’s utterly unsustainable, and everyone knows it can’t go on forever, but somehow it seems like it might. So people don’t seem very worried. Certainly, they’re not worried enough to vote out of office someone who has exploded our national debt to unimaginable levels.

There is going to be a crash.

We have a serious problem, folks, and Steven Den Beste summed it up well yesterday:

I had a hard time sleeping last night. I was full of fear. There’s a catastrophe waiting for my country, a precipice over which it may fall. And if that happens, it won’t be recognizable any longer, for the next twenty years or more.

I’m not talking about a liberal Supreme Court. I’m not talking about automatic tax increases on Jan 1, nor about sequester. This precipice is less obvious, yet far more dangerous.

I think the dollar is going to crash.

There’s a story told about a man who fell out of a window on top of a skyscraper. As he passed the 20th floor he was heard to mutter, “Well, I’m OK so far.” This country is falling, but hasn’t hit the ground yet. When it does, things get very ugly, very fast.

The problem is the deficit.

Den Beste lays out a fairly realistic scenario for what happens when we keep spending without regard to what we’re taking in:

The only reason that debt service on that $16 trillion hasn’t destroyed us already is that the Fed is holding interest rates down. The reason the annual deficit hasn’t destroyed us yet is that the Fed is “running the printing presses” (only they call it “quantitative easing”) to cover it. But neither of those is sustainable in the long run. The ground is still waiting for us, and we’ll know we’ve hit it when a T-bill auction ends up with a lot higher interest rate than we’ve been paying so far.

It’ll be a cascading failure, once it begins. When T-bill interest rates begin to rise, confidence will begin to fail. The rise will accelerate as bond purchasers begin to price in increasing degrees of risk.

And eventually this explosion of money is going to lead to inflation. In fact, it already has; just go to a grocery store some time and look at the prices.

Which brings us to the third deficit: trade. The dollar is the de-facto world currency. Oil is priced and bought in dollars, and that’s not the only thing that is. But if confidence in the dollar begins to decline, and increasing suspicion that the US will devalue it (either deliberately or inadvertantly) then willingness of others to accept dollars will decline and that will, in fact, result in a drop in the value of the dollar, reflected in changing exchange rates.

All of these things will feed back on themselves and each other, and it will be an accelerating failure. Once something like this happens, it’s almost impossible to stop. I don’t anticipate Weimar Republic (or Zimbabwe) levels of inflation, but I won’t be at all suprised if it hits 20% per year. I won’t be surprised if it’s a lot higher than that.

To me, this is not crazy talk. This is real.

So what should the Republican party do? I don’t know if that’s the question. I don’t know if they’re up to the task.

The question is: what should you and I do?

We have to make people try to understand the problem. We have to make this a priority. Because a crash is going to be very, very hard on our children.

How to make this a priority is an ongoing discussion. Whether to make it a priority is not. It must be done.

Thanks to SPQR.

171 Comments

  1. Ding.

    Comment by Patterico (8b3905) — 11/8/2012 @ 7:36 am

  2. Besides electing Obama, America voted in a Republican House. Split personality?

    So doesn’t the House have a mandate to cut government goodies?

    This is going to be interesting.

    Let the Benghazi hearings begin.

    Comment by AZ Bob (1c9631) — 11/8/2012 @ 7:42 am

  3. Doesn’t matter. Sandra Fluke got her free rubbers.

    Comment by JD (318f81) — 11/8/2012 @ 7:43 am

  4. This is just Rethuglikkkan scare-mongering

    Comment by JD (318f81) — 11/8/2012 @ 7:44 am

  5. My main problem with den Beste’s analysis is that he says people will flee the dollar to other currencies.

    What other currencies?

    Comment by Patterico (8b3905) — 11/8/2012 @ 7:50 am

  6. The Democrats have been intentionally hiding their responsibility for this issue by avoiding passing any budget at all (Federal budgets are required by law to include a 10 year projection of revenue and spending, unlike individual appropriations bills).

    The Democrats have been encouraging – even ridiculing any counter arguments – a “let daddy pay for it when the bill comes” attitude to government spending.

    Comment by SPQR (768505) — 11/8/2012 @ 7:51 am

  7. Pat

    What other currencies indeed = gold is overbought and in the middle east they dont accept bullion only coins as scams on gold bars are more sophisticated and harder to detect

    Comment by EPWJ (2a58f7) — 11/8/2012 @ 7:52 am

  8. Patterico, he didn’t say that exactly. He said their willingness to accept dollars would be reduced. Hence drops against exchanges of other currency.

    Comment by SPQR (768505) — 11/8/2012 @ 7:53 am

  9. > Besides electing Obama, America voted in a Republican House. Split personality?

    Think Progress (a site which I know is viewed with distrust here but whose numbers shouldn’t be hard to verify, on this issue at least) reports that more people voted for a Democratic candidate for the House than a Republican candidate for the House, but the districts were drawn in such a way that the Democratic-safe candidates were winning massive majorities while the Republican-safe candidates were winning narrower majorities (think 75-80% for safe Democratic districts like SF or Manhattan as opposed to say 60% majorities for safe Republican districts).

    I haven’t checked the numbers, but it seems plausible to me.

    Comment by aphrael (f1d203) — 11/8/2012 @ 7:55 am

  10. Even if the recovery nominally improves, that will also trigger price inflation by increasing the velocity of money and bringing the full force of monetary inflation into price inflation.

    I have a little gold, and I think everybody should have a little gold, but even gold isn’t a failsafe hedge, since the govt can confiscate it at any time; they’ve done it before. And, if you’re honest with the IRS, selling gold is subject to the 28% “collectibles” tax, which could be raised at any time.

    So yeah, it’s scary.

    Comment by gp (0c542c) — 11/8/2012 @ 8:03 am

  11. This is all about the DNC-MSM Alliance, and a lack of education and curiosity. The system has worked hard to make students a weird combination of passivity and entitlement. Small view: they won’t study more but want extra credit. It’s about how they feel, not about fact.

    Ownership and consequences are deferred. Until the GPA collapses, and the student can’t go to medical or law or business school (unless there are quotas!). But they had a lot of great club meetings and parties!

    I was shocked at how uninformed my undergrads were (that’s not code for “agree with me”; I keep all politics off campus, as it should be). Ask them about deficits? Eyes glaze. It’s not real, like their student loans. Why, several of them brought up the “shuck and jive” comment by Romney as racist. I did point out that the guy who made the claim, Chris Mathews, had used te expression himself. As had Jay Carney (and they didn’t know who Jay Carney is).

    My point? It’s all about getting voters to read, study, and think. But most people—both parties—prefer to think via bumper sticker in jingo-istic sound bites.

    We have a lot of work to do. And when things get bad, there will still be a meme presented that “it would have happened anyway”…no accountability or ownership.

    I hope I am wrong.

    Comment by Simon Jester (87d2bf) — 11/8/2012 @ 8:10 am

  12. So I guess aphrael thinks the house is not really in Republican hands.

    I see.

    Comment by kinlaw (2fb87c) — 11/8/2012 @ 8:18 am

  13. Republicans have to go work, maybe to two jobs; and take their kids to swimming, or music, or basketball, and then give them dinner, and do homework ….

    Democrats have all day to vote.

    Comment by nk (875f57) — 11/8/2012 @ 8:18 am

  14. 2014 Senate races – seats that easily could flip

    Democrat Held seats where the incumbant scored less than 55% of the vote:

    Alaska (Palin?), Colorado, Louisiana, Minnesota, New Hampshire, North Carolina,Oregon, South Dakota*

    Due to a massive stroke 3 years ago that took a year of therapy – I cannot imagine Tim Johnson running for re-election

    There are 2 vulnerable Republican seats

    Kentucky (states been trending Red) and Maine (trending deeper blue)

    Two years we will have the resources to gain at least 4 net seats

    Which will pressure some of these “Independents” seats which there are now 3

    Comment by EPWJ (2a58f7) — 11/8/2012 @ 8:21 am

  15. “We have to make people try to understand the problem.”

    What’s the point if there isn’t anyone available to effect a solution?

    We just had an election for the only people who can legally do anything about it. And the ones selected haven’t so far. Why would they change now?

    This is like yelling there’s a fire but then relying on the ones who set it to help put it out.

    The firefighters (us) have been told to eff off in no uncertain terms.

    the people you want to take on this task of informing the great unwashed have just been dealt a major repudiation by them and told “by the way, you’re all a bunch of racist, sexist, homophobes so we don’t want to listen to anything else you say.”

    I think I’ll do what little I can with the time left to try and protect myself as they won’t be listening to me any time soon. (or you either for that matter.)

    Comment by Jcw46 (f23062) — 11/8/2012 @ 8:22 am

  16. @11

    Plus the media will continue to blame Repubs, it still has that kind of sway. Didn’t 42% of those exit polled say that O’s response to Sandy played an important part in their decision? If that’s not a media construct then nothing is. He did a photo op for god’s sake.

    Comment by kinlaw (2fb87c) — 11/8/2012 @ 8:24 am

  17. Kinlaw: excuse me, what?

    It’s clearly true that the House is in Republican hands. I don’t see how what I said contradicted that.

    It can – and think progress says it is, I haven’t done the math – simultaneously be true that Democratic candidates got more votes overall.

    Imagine three districts of equal population and equal turnout. To simplify matters, assume there are 500K voters in each district. In one district, the democrat gets 400K votes while the republican gets 100K votes. In the other two districs, the Republican gets 300K votes while the Democrat gets 200K votes.

    The result: 2 elected Republicans, 1 elected Democrat. But at the same time, democrats got 800K votes while republicans get 700K votes.

    I think it’s entirely plausible that this is what happened, because urban democratic-safe seats are typically incredibly safe and it’s not shocking for 75-90% of the votes in them to go to the Democrats, while suburban and rural districts are usually more evenly divided than that.

    And note: if that *is* what happened, i’m not complaining about it; it’s the way our system works, intentionally so. I’m only pointing it out because it makes the seeming schizophrenia of the election results less bizarre.

    Comment by aphrael (f1d203) — 11/8/2012 @ 8:25 am

  18. Kirk, in Illinois? Quinn will appoint Valerie Jarett.

    BTW, Eric

    as scams on gold bars are more sophisticated and harder to detect

    Eureka! http://www.longlongtimeago.com/llta_greatdiscoveries_archimedes_eureka.html ;)

    Comment by nk (875f57) — 11/8/2012 @ 8:25 am

  19. EPWJ: I think a number of those are potential flip candidates, although I don’t think Oregon is. On the other hand, are there seats which could flip the other way?

    Comment by aphrael (f1d203) — 11/8/2012 @ 8:27 am

  20. Sorry aph, that was pure snark. Had to get it out of my system.

    I still think your comment is meaningless. We count wins, period.

    Comment by kinlaw (2fb87c) — 11/8/2012 @ 8:28 am

  21. Depends on what you’re interested in. Absolutely, my observation has no legal or political effect; the House is in Republican hands, as it should be after the results of this election.

    But if you’re interested in trying to answer the question “why did the public re-elect President Obama *and* the Republican House?”, a decision by the voters which seems bizarre, schizophrenic, and self-defeating, then my observation is helpful — the public re-elected Obama and the Republican House because of the way district lines are drawn, and because of differences in the voting behavior of urban and suburban communities.

    It has no effect on what’s going to happen over the next two years, nor should it – but that doesn’t mean it’s meaningless.

    Comment by aphrael (f1d203) — 11/8/2012 @ 8:31 am

  22. #9:

    “Think Progress (a site which I know is viewed with distrust here but whose numbers shouldn’t be hard to verify, on this issue at least) reports that more people voted for a Democratic candidate for the House than a Republican candidate for the House, but the districts were drawn in such a way that the Democratic-safe candidates were winning massive majorities while the Republican-safe candidates were winning narrower majorities (think 75-80% for safe Democratic districts like SF or Manhattan as opposed to say 60% majorities for safe Republican districts).”

    This is ironic because the districts were set up to get the Demo’s as many seats as possible except they couldn’t squeeze out wins in close contests.

    The game was fixed but it wasn’t.

    Comment by AZ Bob (1c9631) — 11/8/2012 @ 8:32 am

  23. I sold all my stocks yesterday and am trying to figure out where to put my money. Real estate? What’s that going to be worth when no one can afford to buy it? I don’t know if gold is overbought or not, but it has historically been a store of value during uncertain times, and I have no reason to think it won’t continue to be. You don’t have to own coins or bullion — there’s an ETF (ticker GLD) — unless you think either will be necessary for pocket change.

    Comment by Diffus (48ae73) — 11/8/2012 @ 8:36 am

  24. As you said, this is an easily anticipated crisis. It’s not news. Romney and Ryan brought this up all the time. And we have the delightful situation in Europe for emphasis.

    People don’t care. They bought the socialist fantasy, and our payment is conveniently deferred. I wonder whether, for some, crisis is the objective.

    What do we do, refuse to raise the limit? Why in the world would that stop them?
    “PRESIDENT OBAMA should announce that he will raise the debt ceiling unilaterally if he cannot reach a deal with Congress”
    http://www.nytimes.com/2011/07/22/opinion/22posner.html?_r=3&hp&

    Laws and constitutions are just so much paper. Did you hear that Obamacare is a tax? And it will reduce the deficit.

    We certainly need to do whatever we haven’t done already. Shout from the rooftops, if that would help. Fox should be hammering this every day unless there is some missing blonde for them to report about. But that’s still just preaching to the choir.

    A free and prosperous people are squandering their inheritance and begging for shackles. We all live in California now.

    Comment by Amphipolis (d3e04f) — 11/8/2012 @ 8:43 am

  25. And eventually this explosion of money is going to lead to inflation. In fact, it already has; just go to a grocery store some time and look at the prices.
    We do most of our shopping at a discount grocery. Typically I have preferred to buy meat (bacon, hot dogs, etc.) that’s name brand from a major chain when on a great 2 for 1 sale. It has been over a year (though not sure how much longer) since I have seen that advertised. We rarely eat that stuff anymore, and when we do it is because I’m willing to put up with cheap stuff (bacon I don’t mind too much, if hotdogs I try not to think about it.) Likewise, cheap bread more air than anything unless a 2 for 1 sale of something good. We used to always get Thomas’ English muffins or bagels on 1/2 price, not too often for a year or more.

    In the 2000s, property values kept going up and up and up. It seemed wonderful on one level. Everyone’s house value was skyrocketing. You could take out loans on the equity and do fun stuff. Everyone knew it couldn’t go on forever, but somehow it seemed like it might. So nobody seemed very worried.
    I first heard of a coming real estate and financial crash largely due to the sub-prime mess on Beck about 9 months or more before it happened. he never took credit for being brilliant or anything, he just said he was willing to tell what some smart people were willing to say that nobody else wanted to be truthful about.

    The question is: what should you and I do?
    Beck said (yesterday) buy land in Texas near like-minded people, plant your garden and buy your Mason jars for canning, and stock up on ammunition. He was being much more serious than sarcastic, said to move out of major cities.

    Now, in one way he says a lot of far-fetched sounding stuff, but he did have the info about the sub-prime meltdown and real-estate crash long before I heard it anywhere else. He called out Van Jones and Alinsky before I ever heard of Alinsky. He says the smart people who told him about the previous economic things he was right on tell him the dollar is going to crash and all Hades will break loose. And of course, our old friend Soros made his riches on crashing economies and trading currency, didn’t he?

    Comment by MD in Philly (3d3f72) — 11/8/2012 @ 8:48 am

  26. My oldest son laughs at listening to people like Rush and Beck…but he has been thinking how he and some of his friends have the skill set to escape Philly and live on state game lands in nowhere PA if they have to…

    Comment by MD in Philly (3d3f72) — 11/8/2012 @ 8:51 am

  27. Beck said (yesterday) buy land in Texas near like-minded people, plant your garden and buy your Mason jars for canning, and stock up on ammunition. He was being much more serious than sarcastic, said to move out of major cities.

    What would go wrong in major cities?

    Comment by Michael Ejercito (2e0217) — 11/8/2012 @ 8:57 am

  28. AZ Bob,
    > This is ironic because the districts were set up to get the Demo’s as many seats as possible except they couldn’t squeeze out wins in close contests.

    That somewhat depends on the state, no?

    Comment by aphrael (f1d203) — 11/8/2012 @ 8:57 am

  29. there’s a great big beautiful tomorrow shining at the end of every day is my understanding

    Comment by happyfeet (34b6ab) — 11/8/2012 @ 8:58 am

  30. What would go wrong in major cities?
    Comment by Michael Ejercito — 11/8/2012 @ 8:57 am

    Are you serious?

    How long do you think food lasts in a city if the supply lines stop because there is no gasoline that is affordable, or the companies that truck it go out of business, or there is no credit to keep companies solvent?

    Comment by MD in Philly (3d3f72) — 11/8/2012 @ 9:07 am

  31. There is no way for the government to spend if the House votes no. The case has to be made that we cannot continue down this road one day longer and that choices have to be made.

    We are past they point where easy things like 10% program cuts will help (especially since the baseline request immediately becomes a 15% increase). Further, there is a point in many programs where you have cut nearly all benefit but still have all the overhead, since laying off government employees is almost never done.

    Whole programs have got to go now, and yes, some people will be hurt. Better some hurt now than lots of hurt later.

    Of course, it won’t work, most likely. The spenders will win in the end. But if we don’t try, we cannot make the case later and there is still some hope we can pull it out next time.

    Den Beste is clearly right about one thing, though — when we have to cover the debt at normal real interest rates of, say, 4%, we are going to have to find another $500 billion or so, each and every year, just to stay even. If we fail to do that and keep piling up the notes — or try to inflate our way out — the interest on the debt will skyrocket and the currency will collapse almost overnight.

    We should at least TRY to avoid that.

    Comment by Kevin M (bf8ad7) — 11/8/2012 @ 9:07 am

  32. there’s a great big beautiful tomorrow shining at the end of every day is my understanding

    Comment by happyfeet — 11/8/2012 @ 8:58 am

    That’s very true, except when it isn’t.

    Find someone, or a book if you have to, that can tell you what was on the other side of Kristallnacht.

    Comment by MD in Philly (3d3f72) — 11/8/2012 @ 9:09 am

  33. “I sold all my stocks yesterday” I would not recommend that generally. If you’re sitting on _big_ gains, and have a better place to put the cash, it might be OK.

    Otherwise, US stocks are a hold, at least. Money from anticipated further quantitative easing has to go somewhere, and stocks are the only place to get a return while interest rates are being held near zero.

    Even if the USA turns into Venezuela, there will still be PG, MMM and other solid companies that will have value. I’m not selling my stocks, but I’m not buying here either. If we get another big panic like 2008-2009, I’ll buy it all again.

    BHO is a miserable failure, but face it, his first term was great for stocks overall. Remember that the economy IS NOT the stock market; they are two different animals.

    Comment by gp (5a38d9) — 11/8/2012 @ 9:11 am

  34. MD in Philly, before I went on my low carb diet – ahem – I used to hit the bakery outlet store regularly. Good prices on bread, muffins etc.

    Comment by SPQR (768505) — 11/8/2012 @ 9:13 am

  35. That said, be diverse, and invest for the long term. Have a little of everything: cash, stocks, bonds, real estate, precious metals. If you anticipate price inflation, you surely do not want to be 100% in cash. If you anticipate tyrannical asset confiscation, you do not want to be 100% in gold. Etc, etc.

    Comment by gp (5a38d9) — 11/8/2012 @ 9:19 am

  36. Aphrael, I wouldn’t be surprised if the claim that more people voted for House Democrat candidate than House GOP candidates is true. But there is more to it than just the GOP gerrymandering the redistricting. A big part of it, as you point out, is the fact that in major urban areas you have huge concentrations of Democrats and districts where their candidate wins with 80+% of the votes. The Voting Rights Act has also contributed to the problem by creating minority-majority districts where it doesn’t matter if the incumbent is a crook or a pervert, he easily wins reelection every time. I can’t find it in my heart to lament the fact that the Democrats and the liberal establishment are perhaps being screwed by the system they were so hell-bent on creating and which they have fought every effort to modify.

    The system could probably be redesigned to produce a permanent Democrat majority, but it would likely come at the expense of the race-hustlers, the leftist radicals, and the quota brigade. The Democrats aren’t evolved enough to let that happen.

    Comment by JVW (60fabf) — 11/8/2012 @ 9:22 am

  37. Of course, it won’t work, most likely. The spenders will win in the end. But if we don’t try, we cannot make the case later and there is still some hope we can pull it out next time.

    Why will the spenders win in the end?

    Comment by Michael Ejercito (2e0217) — 11/8/2012 @ 9:25 am

  38. If I had had the money a few years ago, I think it would have been good to buy silver as it had not yet skyrocketed as gold had. I have no idea now, except living on land with your own food and water supplies can never go wrong.

    years ago in the last millennium when I read science fiction, I read a book Cities in Flight. One of the interesting twists in it was when the galactic monetary exchange switched from one thing to another (a plant derived “immortality” drug). One of the roving cities had just passed up a chance to become incredibly rich with the stuff right before the switch.

    Comment by MD in Philly (3d3f72) — 11/8/2012 @ 9:27 am

  39. don’t forget your la times coupons together we can whip inflation now

    Comment by happyfeet (34b6ab) — 11/8/2012 @ 9:28 am

  40. Some say that the House is still closest to the people and represents the population better than the presidential race. IDK

    Comment by MD in Philly (3d3f72) — 11/8/2012 @ 9:29 am

  41. > I can’t find it in my heart to lament the fact that the Democrats and the liberal establishment are perhaps being screwed by the system they were so hell-bent on creating and which they have fought every effort to modify.

    For what it’s worth, that also varies from state to state. Here in NY, the Democratic governor promised to enact independent redistricting in the state, but he was opposed by the Republican leadership of the Senate, and ended up reneging on the promise as part of a series of deals with the Senate leadership (which, among other things, got us gay marriage).

    Comment by aphrael (ca5099) — 11/8/2012 @ 9:29 am

  42. I think we have to stop acting like the wronged wife whose husband is out getting blasted at the bar every night. We cannot save this country alone.

    The catastrophe will come whether we do anything or not, so … let it come. Let them taste it. Give in to Bamster on the rich people tax increases. It won’t be enough so … let it come.

    Comment by Patricia (e1d89d) — 11/8/2012 @ 9:30 am

  43. I am about to board a plane, so let me first commit an act of apostasy: we’re going to have to raise taxes, not just on the rich but on all of us. This past Tuesday confirmed it. The GOP should get out in front of that train and announce “Look, we know that doing this is going to cause unemployment to increase, but the people have spoken and they apparently want high unemployment and low economic growth instead of giving up on government freebies. We’re going to cut spending too, but you have a voted for subsidized college education, public tv and radio, generous unemployment benefits, and ObamaCare, so damn it, you are going to pay for it. If you don’t like it, well, there’s another election in two years and our party will run on an agenda to reform government spending and put and roll back it’s dominance in our lives. In the meantime, we need to pay for the programs that we voted ourselves.”

    Comment by JVW (60fabf) — 11/8/2012 @ 9:31 am

  44. “I think it would have been good to buy silver” Yes, it would. Good news is that silver is very volatile, and therefore more likely to offer a nice low entry point price sooner than gold will. If you anticipate Armageddon, then having bags of silver melt coins gives you units of reasonable denominations to buy food/ammo/etc with. One ounce gold coins are too big a denomination to buy day-to-day stuff with.

    The best scenario would be to get another cash liquidity panic like 2008-2009, then buy the cheap assets like silver and stocks with dear dollars. But can’t count on that happening again.

    Comment by gp (5a38d9) — 11/8/2012 @ 9:34 am

  45. Aphrael, I am sure that there are smaller steps that could be taken to make redistricting more fair, and I remember that you were very interested in this concept and had applied to be on the CA redistricting board, but I still submit that this problem will never be solved until we get over the idea that certain districts must lead to the election of member of a certain race.

    Comment by JVW (60fabf) — 11/8/2012 @ 9:34 am

  46. The dollar can’t crash, without very other currency in the world crashing too. And if you say the Swiss franc, well, they’ve already taken steps to try to prevent too many Swiss francs from being bought.

    What is there is the prospect of, sometime in the future, but not immediately, is a worldwide hyperinflation.

    And once it starts, it’ll be hard to stop. The Roman Empire couldn’t stop it, no matter what they did.

    Now, not too long ago, we had a worldwide inflation, going even into double digits, from about 1965 through 1990. It all started in the Unites States.

    Of course what they did in the end in the Roman Empire was very wrong and was a trap. The Emperor Diocletian put in very strict wage and price controls, including even a requirement that a person’s son follow his father’s profession. This was the origin of feudalism and the byzantine regulations of the Byzantine Empire.

    Comment by Sammy Finkelman (4e1aa8) — 11/8/2012 @ 9:37 am

  47. “The catastrophe will come whether we do anything or not” Yes, that seems right to me. Espcially now that we know for sure that the majority of the electorate has turned into Lena Dunham.

    The first step is to embrace sequestration. Let it happen: the tax increases, the spending cuts. Let it happen. It’s the only feasible way to begin to fix the mess. Take the pain now. If we don’t have the political will to endure sequestration, then nothing can possibly stop the debt bomb.

    Comment by gp (5a38d9) — 11/8/2012 @ 9:39 am

  48. 25. MD in Philly: If you heard Beck predicting a housing crash any time after the last week or two of July 2007, no real foresight was involved. Sales had already frozen.

    Comment by Sammy Finkelman (4e1aa8) — 11/8/2012 @ 9:40 am

  49. Regarding (worldwide) hyperinflation – not a crash limited to the Dollar – the Dollar cannot crash without taking every other currency down with it:

    We may be headed that way, but nobody can say the year or even decade. We are not yet at the stage where inflation is the only way out.

    This future inflation, if it takes place, will pretty much eliminate the accumulated federal debt. Also old student loans. Also many forms of savings.

    Insurance policies will be inadequate, and all other kinds of disruptions will ensue.

    Too rapid inflation won’t allow the federal tax code or Social Security payments to catch up – it is indexed only annually. Congress will have to try to pass some laws. Any law or contract that mentions a dollar figure will be off.

    It’ll be a mess and people will have to be fast on their feet.

    Comment by Sammy Finkelman (4e1aa8) — 11/8/2012 @ 9:44 am

  50. Before I go to get somethings done,
    the issue here and the other current thread is for the repubs not to get the rap for what the dems do. That simple. The people said they wanted Obama, whether they understood what that meant or not, so give them what Obama wants. The repubs can fight for what we believe, get blamed for being obstructionist, Obama does his thing anyway by executive fiat (since no one has the stomach and/or ability to enforce separation of powers anymore) and the economy tanks anyway and the Repubs get blamed.

    Maybe the Repubs should stand up and say, “We would do this, but Obama wants to do this, so we are going to let him and all of you out there watch what happens”.
    IDK

    Comment by MD in Philly (3d3f72) — 11/8/2012 @ 9:46 am

  51. Comment by JVW — 11/8/2012 @ 9:34 am

    but I still submit that this problem will never be solved until we get over the idea that certain districts must lead to the election of a member of a certain race.

    This would require the repeal of a certain section of the Voting Rights Act. The law actually is ind of vague and disingenuous, and this semi-explicit policy resulted first from court, so even on a techniical level itisdifficult to repeal.

    This law results in very bad representation, as you get incumbents who are pretty much guaranteed re-election even if many of their constituents vote with their feet. Not only that, but they have a stake in things not getting better because
    it will bring in more voters and possible opponents. (this is called gentrification and is routinely opposed by these politicians)

    Most of these politicians cannot survive anywhere else. They probably can’t even survive in any black constituency unless it is poor where nobody has any assets to campaign and nobody who might think of running lives. (the politicians themselves have some kind of special arrangements)

    There are not too many Barack Obama’s and Barack Obama actually thought he might have a problem with a constituency that was exclusively black – he lost running for Congress in the Democratic primary in the year 2000 against incumbent former Black Panther Bobby Rush, and when the time came to redistrict his State Senate seat in 2002, he had a lot of control over the lines and could ask for things, and he deliberately got more whites included in his district (his district included an anomalous area: Hyde Park, near a university, by virtue of with it was protected against disappearing.)

    The worst of the minority politicians are corrupt (but nobody’s looking) and also may take campaign money from people with a stake in high crime, like drug dealers (somewhat laundered, of course).

    Comment by Sammy Finkelman (4e1aa8) — 11/8/2012 @ 10:07 am

  52. I enjoyed Steven den Beste’s USS Clueless blog, until he closed it up because he hated being crapped at by his commenters. If a crisis is large enough to lure him away from anime blogging, it is definitely looming very large indeed. *shudder*…

    Comment by The Sanity Inspector (0472b5) — 11/8/2012 @ 10:09 am

  53. BHO is a miserable failure, but face it, his first term was great for stocks overall. Remember that the economy IS NOT the stock market; they are two different animals.

    The main reason the stock market went up under Obama is that bonds pay nothing. Stock dividends can be 5% even from solid companies.

    IF you truly believe that the dollar is going to crater, you should be buying up houses in good locations.

    Comment by Kevin M (bf8ad7) — 11/8/2012 @ 10:11 am

  54. Comment by gp — 11/8/2012 @ 9:34 am

    if you anticipate Armageddon, then having bags of silver melt coins gives you units of reasonable denominations to buy food/ammo/etc with.

    You wouldn’t be able to buy food with silver coins. Silver is not money. (money is what everyone s ready to take in preference to everything else – something you have no fear you would have a problem getting rid of, even in a fire sale)

    Nobody will able to estimate the value of silver coins closer than to within 50% plus or minus – maybe even a wider range. No, you want to buy food, you’ll have to use dollars, unless some other commodity, like gasoline maybe, takes its place. Perhaps gasoline vouchers. Also consider, maybe, cigarettes (but not enough people are addicted these days)

    You may be able to use your silver coins to buy dollars, but if you have a lot, you may find, you’ll have to offer more coins for fewer dollars.

    Comment by Sammy Finkelman (4e1aa8) — 11/8/2012 @ 10:17 am

  55. aphrael, this isn’t the first time that the total vote in districted contests didn’t match the representative outcome. During the Reagan years it happened pretty routinely the other way in Congress.

    Until the Republican Party cratered here, it was happening often enough in California where the art of computer gerrymandering was raised to an art form.

    Either we ban all gerrymanders somehow, or we live with them, but the current instance of ox-goring isn’t very interesting.

    Comment by Kevin M (bf8ad7) — 11/8/2012 @ 10:18 am

  56. Kevin – certainly. I’m not trying to ox-gore; i’m trying to explain the otherwise peculiar election results.

    I’m happy to switch to redistricting commissions everywhere; i agree with the rhetoric that says legislators shouldn’t be picking their voters.

    Comment by aphrael (f1d203) — 11/8/2012 @ 10:20 am

  57. Yes, guys, I’m a believer that Boehner should put up a little fight, then give in to Obama, whom he respects so much, and to the will of the American people.

    Tax the rich and watch the debt grow and wreak havoc.

    Only reality will open their eyes.

    Comment by Patricia (e1d89d) — 11/8/2012 @ 10:24 am

  58. 49. “the Dollar cannot crash without taking every other currency down with it”

    A rather sweeping generalization. No doubt you’re choosing to ignore small oil producers like Norway and Mexico that cannot stop their currencies strenghthening beyond remedy. Provided they can feed their population they will not be tempted to try.

    Countries like Turkey an Egypt are dead meat, their current account deficits are already bankrupting them. War will ensue.

    Now turning to the central banks of major markets, the EU, US, Japan, China, and Britain, the EU is leading the pack in money supply creation in an attempt to reduce sovereign/captive bank debt. This is why the Swiss have pegged the franc at 1.25 euros, hoping to keep imports merely outrageously expensive.

    Japan is losing the war rapidly, their current account tab is rising rapidly with their export market collapsing.

    We all know the Fed was first to begin the deflation war.

    China, has meanwhile, begun trading directly in Asia without use of the US dollar.

    The problem, too much money, will only lead to inflation when consumer credit is resurrected. When it does, however, the Fed will be the major purchaser of US debt and we’re off to the races.

    By then the EU will be history and the US current account deficit will go into orbit.

    Comment by gary gulrud (dd7d4e) — 11/8/2012 @ 10:25 am

  59. 20% annual inflation, and the reduced value of the Dollar in International Trade (think oil imports), will result in serious social disorder in urban areas.
    Gasoline prices would be increasing like we saw in SoCal last month: $.05-$.10 per DAY!
    Groceries, which all have to be transported by truck, will skyrocket.
    BTW, my personal inflation index is tied to the price of Bacon.
    When Obama came into office, I could get bulk, premium, thick-sliced bacon for $1.99/lb on-sale at two different chains on a regular basis.
    This bacon is now “on sale” at $3.49.
    Now, most of this can be tied to ethanol, but it is the result of government policy none-the-less.

    The question that arises is:
    What will the MetroSexuals do when a visit to Starbucks requires a “fin”, with no change (even that might be too low – think “saw-buck”!)?

    Rush today, brings to light that Romney, loosing by 2.7MM votes o/a drew 3MM less GOP votes than McCain did.
    So, what group didn’t turn out for the Republican Candidate:
    It seems it was ….. THE REPUBLICANS!
    (data provided by Heather MacDonald @ The Manhattan Institute)

    Comment by AD-Restore the Republic/Obama Sucks! (b8ab92) — 11/8/2012 @ 10:27 am

  60. 57. “Only reality will open their eyes.”

    Word.

    Comment by gary gulrud (dd7d4e) — 11/8/2012 @ 10:29 am

  61. You wouldn’t be able to buy food with silver coins.

    Ammo will always be a “unit of currency” in this country. As will cigarettes.

    Comment by AD-Restore the Republic/Obama Sucks! (b8ab92) — 11/8/2012 @ 10:31 am

  62. Comment by AZ Bob — 11/8/2012 @ 8:32 am

    This is ironic because the districts were set up to get the Demo’s as many seats as possible except they couldn’t squeeze out wins in close contests.

    Not really. They have to protect minority incumbents. Since the nearby areas are also heavily Democratic, this results in districts with an extremely high Dem vs Rep vote.

    There’s another thing. There are a good number of places that don’t have a major party challenger.

    Comment by Sammy Finkelman (4e1aa8) — 11/8/2012 @ 10:33 am

  63. Comment by AD-Restore the Republic/Obama Sucks! — 11/8/2012 @ 10:31 am

    Ammo will always be a “unit of currency” in this country.

    Only where i† is legal for everybody to buy it, without going through any kind of background check.

    As will cigarettes.

    It’s not legal, in most places, to sell loosies, and even packs might have some legal problems regarding taxation and people under 18. Any kind of legal question will result in limited use, as stores could not use them to pay their wholesale suppliers. Without a change in law, anything used will need to be denominated in dollars.

    I think gasoline vouchers might be a possible currency, but the value would jump up and down somewhat.

    Comment by Sammy Finkelman (4e1aa8) — 11/8/2012 @ 10:40 am

  64. Sammy – two of the four legislative races I could vote on, the incumbent was running unopposed. Same for all the (partisan) judicial races.

    As is my custom, I declined to vote for people who are running unopposed.

    Comment by aphrael (af3e66) — 11/8/2012 @ 10:44 am

  65. 52. Health infirm.

    Comment by gary gulrud (dd7d4e) — 11/8/2012 @ 10:48 am

  66. Gasoline vouchers would be something that would entitle the bearer to a gallon of regular gasoline of a certain type. You could also have a 2 gallon bill, a 5 gallon bill, a 1/2 gallon bill.

    To circulate really far, the oil companies would have to accept it. If issued by gasoline stations,there would be all sorts of problems involving the certainty of redemption, but a large chain could maybe make them circulate.

    The gasoline would probably have a fixed nominal price in dollars. Say $5 a gallon. The 1-gallon bill or voucher would supposedly be equal to a $5 bill, say. But they wouldn’t sell gasoline for the amount of paper dollars the gasoline on the voucher was said to be equal to. You’d need the voucher.

    Legislation would need to clarify the situation. You want to be able to use use banks, and checks and credit cards. Perhaps the dollar would be replaced by a unit of currency backed by gasoline. Or crude oil. It makes more sense than gold or silver which nobody regularly uses.

    The price of oil or gasoline is not stable, but it might be more stable than a dollar undergoing hyperinflation.

    And as long as people felt a 5-gallon bill would eventually be redeemed, spot shortages wouldn’t matter.

    This is all without pondering the tax complications.

    Comment by Sammy Finkelman (4e1aa8) — 11/8/2012 @ 10:58 am

  67. omment by aphrael — 11/8/2012 @ 10:44 am

    As is my custom, I declined to vote for people who are running unopposed.

    You could write in a name. That would at least tell them that somebody cared, and might vote for somebody else, and the ace wasn’t just simply skipped.

    Or also, you could pick the party line to vote on. The unopposed person as a Democrat, or the same person as a Republican, or Conservative (those usually are the only lines with judges) Or maybe any judge not running on all lines.

    Comment by Sammy Finkelman (4e1aa8) — 11/8/2012 @ 11:04 am

  68. Sammy, where exactly do you think background checks are done for ammo purchases?

    Ah, damn, I broke my rule on reading Sammy’s wallotext comments …

    Comment by SPQR (f6798a) — 11/8/2012 @ 11:07 am

  69. Comment by Sammy Finkelman — 11/8/2012 @ 10:40 am

    SF, you need to get out in the REAL country and expand your education.
    When ammo and cigs become wide-spread units of currency, there will be No Controlling Legal Authority regulating sales of pretty much anything.

    Comment by AD-Restore the Republic/Obama Sucks! (b8ab92) — 11/8/2012 @ 11:09 am

  70. For those who don’t know:

    Most other states besides New York don’t have cross-endorsements, and the candidate who is listed on the ballot only once is probably in sad shape..

    We usually have more than one way to vote for a candidate and the candidate on the general election ballot who is listed only once probably has poor prospects.

    Democrats often also have the Working Families line (the union label) and republicans are also Conservative. Independence may be either or blank. A challenger often comes up with a special ballot line of his own – his own new party.

    Comment by Sammy Finkelman (4e1aa8) — 11/8/2012 @ 11:12 am

  71. Sammy – whenever I could, I voted on a third party line. But people who were legitimately running unopposed (say, they were on two party lines and there was nobody else), I declined to vote for.

    If there is no opposition, there’s no election, in my mind.

    Comment by aphrael (af3e66) — 11/8/2012 @ 11:14 am

  72. Comment by AD-Restore the Republic/Obama Sucks! — 11/8/2012 @ 10:27 am

    Rush today, brings to light that Romney, loosing by 2.7MM votes o/a drew 3MM less GOP votes than McCain did.

    Well. In 2008, voters in the most heavily contested states had about a 67% turnout and it was 61% other states.

    But this race was probably as heavily contested and covered in the news media as 2008.

    Superstorm Sandy should have cut down turnout but maybe not too much. ID laws are not supposed to affect people who want to vote for a Republican but maybe they do.

    So, what group didn’t turn out for the Republican Candidate:
    It seems it was ….. THE REPUBLICANS!

    I think this was mainly just a lot of people who didn’t like Romney – who were undecided between not voting and Romney. They never were Romney voters.

    Obama’s vote was also down nearly 9% from 2008.

    Romney’s vote was down slightly less than 5% from that of McCain in 2008

    Comment by Sammy Finkelman (4e1aa8) — 11/8/2012 @ 11:20 am

  73. One female Jewish friend informed me no way would vote for Romney as he would ban all abortions plus he was a f**king Mormon. Isn’t that special? I see no racism in Philly with some inner city precincts going 99% for the chosen one.

    Comment by calypso louis farrakhan (e42a0c) — 11/8/2012 @ 11:26 am

  74. Comment by AD-Restore the Republic/Obama Sucks! — 11/8/2012 @ 11:09 am

    When ammo and cigs become wide-spread units of currency, there will be No Controlling Legal Authority regulating sales of pretty much anything.

    When things aren’t quite legal, there’s a limit to the ability to scale up, and if you can’t scale up, what’s a business to do with all the ammo and cigarettes it has?

    These can be used as a supplement,but they can’t become the main form of money.

    Las Vegas or other gambling tokens might become a unit of currency. But they are denominated in dollars. which people might be trying to avoid using.

    You could try transportation tokens, or toll tokens but these have declined in use.There shouldn’t be too many places that have them.

    Comment by Sammy Finkelman (4e1aa8) — 11/8/2012 @ 11:26 am

  75. “We have to make people try to understand the problem. We have to make this a priority.”

    Why? No seriously, Why? If a majority of people vote for politicians who pursue the policies that got us here what do the rest of us owe them? I know I’m not bulletproof here but I’m old and well off because I put some by for that rainy day. If somebody else didn’t it’s their problem.

    “Because a crash is going to be very, very hard on our children.”

    This one is a little tougher but, both my kids consistently vote for the guys who are fiscally irresponsible. So the most I’m gonna do is refrain from telling them “I told you so”

    Comment by glenn (647d76) — 11/8/2012 @ 11:34 am

  76. When you are using ammo and cigs to buy something, you are participating in a Barter Economy.
    You sell something to someone and take a carton of cigs for it. To keep stock on your shelves, you offer a supplier whatever else you might have (it could be those same cigs, or some ammo, or something else) in exchange for what you need.
    We only use “money” because it allows a universal unit of exchange that is acceptable to all. But, in chaos and anarchy, money will no longer be that “universal” unit as there most likely will be no banking system to backstop it.

    Just think if the Federal Reserve closed tomorrow -
    how long would it take for the banks to start printing their own “bank notes” (as they did in years past), and how negotiable would they be?
    Would there be a variable discount rate in-the-street for Bank-A’s notes v. Bank-B’s?

    Comment by AD-Restore the Republic/Obama Sucks! (b8ab92) — 11/8/2012 @ 11:38 am

  77. I think that we need to co-operate with Obama, up to a point. We need to insist on some things, though.

    1. Severe spending cuts in unnecessary programs, or areas that the states can do as well. The whole education department comes to mind. There are some consolidations as well. The Agriculture Department isn’t really dealing with a million small farmers anymore.

    2. Changes to the ACA so that it is at least workable and not designed to collapse in favor of single-payer. Get rid of the super-powers of the Medicare cost control board, as well as their invulnerability(!) to Congressional action.

    3. Give the Inspector Generals prosecutorial powers, or in some other way provide a check to bureaucratic malfeasance.

    And for this, we give in to some tax hikes, to carbon taxes and such. In each instance we demand on countervailing changes (e.g. relaxation of regulations) so that the economic impact is muted.

    For a time we become the tax collectors for the welfare state, because someone has to. We need to drive down the deficit and the PEOPLE have said they want more government. We need to say, fine, and then make them PAY for it; make it clear it isn’t “free stuff.”

    And all the while we argue that this isn’t our path — this is what the people have chosen and they get another choice every four years.

    Comment by Kevin M (bf8ad7) — 11/8/2012 @ 11:38 am

  78. As is my custom, I declined to vote for people who are running unopposed.

    Comment by aphrael — 11/8/2012

    I do that too.

    ———–

    As for Romney’s poor turnout, I think that was partly due to this election being so dreary from start to finish. It’s no surprise Obama’s turnout was also low.

    I honestly have always thought that a certain kind of moderate comes across as a shameless politician, and for Romney this problem is pronounced. I think Romney probably did well with the squishy independents, but I think this impacted enthusiasm across the board. It’s just hard to believe in him for any principle you might come up with.

    I’m still surprised he lost. Romney did an awesome job with the hand he had to play; his performance was excellent in most respects as a candidate. And I think enthusiasm to beat Obama should have been enough. But I was wrong.

    Comment by Dustin (73fead) — 11/8/2012 @ 11:39 am

  79. So the short answer is buy a shovel and gold and use the shovel to bury the gold?

    Comment by cedarhill (dc0d86) — 11/8/2012 @ 11:54 am

  80. Kevin M – I could support Republican candidates who followed the platform you lay out in #77.

    Comment by aphrael (af3e66) — 11/8/2012 @ 12:02 pm

  81. BTW, my personal inflation index is tied to the price of Bacon.
    When Obama came into office, I could get bulk, premium, thick-sliced bacon for $1.99/lb on-sale at two different chains on a regular basis.
    This bacon is now “on sale” at $3.49.

    AD, did you see my comment? we have the same gauge- except my bacon was 2 for 1, not 1.99/lb.
    I guess we go by the “bringing home the bacon” standard- how gentile of us…

    The one advantage of doing the sequester now and not later, as I see it, is that I don’t think we are yet vulnerable to a national military assault/blackmail by the likes of China or Russia. That may not be true in 5 years at the current rate.

    Besides, when China wants to call in our debt we can make Berkeley and others happy and give them CA (after giving those who vote R a chance to get out). ;-)

    Comment by MD in Philly (3d3f72) — 11/8/2012 @ 12:30 pm

  82. I haven’t looked lately but a while back China started reducing its holdings of US treasuries. Much of current issue US treasuries are being bought by Helicopter Ben with still damp Fed Reserve funny money.

    Comment by SPQR (768505) — 11/8/2012 @ 12:34 pm

  83. Actually, Doc, there is a large cohort in Berkeley that would not be too happy to be aligned with the PRC –
    The Asian-Americans on campus that the Left keeps trying to disenfranchise.

    Comment by AD-Restore the Republic/Obama Sucks! (b8ab92) — 11/8/2012 @ 12:36 pm

  84. Yes, SPQR, the Fed is currently the largest holder of U.S.Bonds in the World.

    Comment by AD-Restore the Republic/Obama Sucks! (b8ab92) — 11/8/2012 @ 12:37 pm

  85. AD, and that is considered “good” by the same people who believed in Al Gore’s social security “lockbox”…

    Comment by SPQR (768505) — 11/8/2012 @ 12:46 pm

  86. Here are a couple of other headlines from today in reference to the up and coming abyss, Michelle. I got them off of Alex Jones.

    Harry Reid slams House Republicans for symbolic vote to raise the debt limit
    Treasury Quietly Warns: ‘Expect Debt Limit to Be Reached Near End of 2012?
    U.S. eats up most of debt limit in one day
    Treasury Auctions To Take US Over Debt Ceiling On Monday
    Obama: Senate must raise debt ceiling above $12T
    US Debt Limit Fight Would Be ‘Catastrophic’: White House
    Congress Considers Raising Debt Ceiling Again to Borrow from Bankers
    Senate sets Christmas eve vote on U.S. debt limit
    Harry Reid says no illegals working construction jobs in Nevada
    Unconstitutional for Obama to Raise Debt Ceiling Without Congress
    Obama Signs Law Raising Public Debt Limit from $12.4 Trillion to $14.3 Trillion
    U.S. Treasury: China Has Decreased Its Holdings of U.S. Debt

    Comment by Diana Shugar (76c1c8) — 11/8/2012 @ 1:05 pm

  87. Only one metal to purchase – Lead.

    Comment by mg (31009b) — 11/8/2012 @ 1:08 pm

  88. Problem with that scenario – the debt bubble bursting is – what exactly comes crashing down?

    Inflation goes up? How? Why would eggs go up in the store? Because if it did – people would buy less eggs. In fact they’d buy less of everything. Inflation in the marketplace is only sustainable if the citizenry are awash with money. That isn’t the case. In fact we all the know the middle class as less money. Marketplace is self correcting in that regard.

    The problem with all these scenarios is that their based on different economic models. Money is no longer backed by gold or silver. Money is something we used to buy wealth, but is often confused with actual wealth.

    Comment by Dale Launer (019a6c) — 11/8/2012 @ 1:09 pm

  89. Dale Launer, the US is awash in Fed Res funny money. Its been pumped out in the form of food stamps, unemployment benefits, low interest mortgages, student loans, bad loans to faux “green” companies and more.

    Comment by SPQR (768505) — 11/8/2012 @ 1:27 pm

  90. The real issue is what is going to happen when the 70-year welfare/warfare status quo finally collapses, because the math holds no joy:

    3) In Fiscal Year 2011, the federal government collected $2.303 trillion in tax revenue. Interest on the debt that year totaled $454.4 billion, and mandatory spending totaled $2,025 billion. In sum, mandatory spending plus debt interest totaled $2.479 trillion… exceeding total revenue by $176.4 billion.

    For Fiscal Year 2012 which just ended 37 days ago, that shortfall increased 43% to $251.8 billion.

    In other words, they could cut the entirety of the Federal Government’s discretionary budget– no more military, SEC, FBI, EPA, TSA, DHS, IRS, etc.–and they would still be in the hole by a quarter of a trillion dollars.

    4) Raising taxes won’t help. Since the end of World War II, tax receipts in the US have averaged 17.7% of GDP in a very tight range. The low has been 14.4% of GDP, and the high has been 20.6% of GDP.

    During that period, however, tax rates have been all over the board. Individual rates have ranged from 10% to 91%. Corporate rates from 15% to 53%. Gift taxes, estate taxes, etc. have all varied. And yet, total tax revenue has stayed nearly constant at 17.7% of GDP.

    It doesn’t matter how much they increase tax rates– they won’t collect any more money.

    http://www.zerohedge.com/news/2012-11-06/it-doesnt-matter

    Comment by Another Chris (c04459) — 11/8/2012 @ 1:32 pm

  91. Comment by AD-Restore the Republic/Obama Sucks! — 11/8/2012 @ 11:38 am

    When you are using ammo and cigs to buy something, you are participating in a Barter Economy.

    You sell something to someone and take a carton of cigs for it.

    When you do that, cigarettes are money. It’s not barter.

    Just think if the Federal Reserve closed tomorrow -

    how long would it take for the banks to start printing their own “bank notes” (as they did in years past),

    If it was legal, and the effective date was sometime after the law was passed, the would be printed before and issued day the law becomes effective.

    and how negotiable would they be?

    They might circulate more near branches of the bank.

    Would there be a variable discount rate in-the-street for Bank-A’s notes v. Bank-B’s?

    Probably. Maybe the highest rated would all go for the same price.

    Comment by Sammy Finkelman (d22d64) — 11/8/2012 @ 1:35 pm

  92. Buy the TBT EFT. Once inflations hits, you’ll make a mint!

    Comment by Jerry (4c02f6) — 11/8/2012 @ 1:43 pm

  93. Sammy, please go off and talk to kmart, I think you too may understand each other.

    Comment by AD-Restore the Republic/Obama Sucks! (b8ab92) — 11/8/2012 @ 2:01 pm

  94. There is a serious case of delusion on the left.

    Almost everyone on the left believe that the financial crisis of 2008 and the housing bubble of 2008 was due to the policies of Bush, wall street greed and lack of regulation. The reality was there was simply too much money available to be lent. For that you can blame Greenspan,

    The left also delusionally believes the social security trust fund is fiscally sound because the trust fund assets consists of US TBills, etc guaranteed by the full faith and credit of the United states.

    Comment by Joe (ea8609) — 11/8/2012 @ 2:04 pm

  95. If you’re looking for things to buy to use as ersatz currency after a complete economic armageddon, there are three things:

    1. liquor
    2. tobacco
    3. 9 mm hollowpoint pistol ammunition

    Comment by Steven Den Beste (99cfa1) — 11/8/2012 @ 2:05 pm

  96. Guns, Ammo, Canned Goods!

    Comment by AD-Restore the Republic/Obama Sucks! (b8ab92) — 11/8/2012 @ 2:07 pm

  97. If you’re looking for things to buy to use as ersatz currency after a complete economic armageddon, there are three things:

    1. liquor
    2. tobacco
    3. 9 mm hollowpoint pistol ammunition

    And .22 rimfire ammo if you might have to make change ;-)

    Comment by SPQR (768505) — 11/8/2012 @ 2:17 pm

  98. 95-96-97- Agreed, but water should be on the list. {I need my coffee}

    Comment by mg (31009b) — 11/8/2012 @ 2:30 pm

  99. Great, now I’m thinking I need to rent A Boy and His Dog this weekend.

    Comment by Chuck Bartowski (11fb31) — 11/8/2012 @ 2:36 pm

  100. 99 — S. M. Sterling’s Dies the Fire might be an appropriate read. A little more catastrophic, but not much. Hyperinflation would be a slow-motion form of what happens in that fictional world overnight.

    Comment by htom (412a17) — 11/8/2012 @ 2:55 pm

  101. 1790 – 2001 (every president before Bush 43) 212 years 5.728 trillion in debt

    2001 – 2007 (Bush 43 with a Republican Congress) 6 years 8.675 trillion in debt. (added 2.947 trillion is six years, or about 1/2 trillion a year)

    2008 – 2009 (Bush 43 with a Democratic Congress) 2 years 10.627 Trillion in debt (added 1.952 trillion in 2 years, or about a trillion a year)

    2010 – 2011 (President Obama and a Democratic Congress) 2 years 14.056 trillion in debt (added 3.5 trillion in 2 years or 1.75 trillion a year)

    2011- today (President Obama and a divided Congress) 2 years 16.627 trillion in debt (added 2.158 trillion in less than 2 years or more than a trillion a year)

    * In the last 12 years we have more than tripled our national debt

    We are currently paying more than $360 Billion in interest every year on the debt, and that is with historically low interest rates. When/if interest rates return to the historical norm, this number will at least double.

    Comment by gahrie (acbb2d) — 11/8/2012 @ 2:58 pm

  102. gahrie, its not appropriate to add FY09 budget deficit to Bush. He wasn’t given a FY09 budget to sign, that occurred after Obama’s inauguration. And then Obama pushed for the trillion dollar faux stimulus spending that occurred partially in FY 09.

    Comment by SPQR (768505) — 11/8/2012 @ 3:03 pm

  103. Comment number 378 on the Election results thread
    by Patterico — 11/7/2012 @ 8:55 pm on

    ….Question, though: if the dollar ceased to be the preferred currency of the world, what would take its place?

    I have a hard time picturing which other currency could possibly take its place. Any ideas?

    The new U.S. Dollar, backed by petroleum maybe, at first.

    There is no substitute for the Dollar.

    Comment by Sammy Finkelman (d22d64) — 11/8/2012 @ 3:33 pm

  104. Comment by gahrie — 11/8/2012 @ 2:58 pm

    When/if interest rates return to the historical norm,

    That won’t happen so long as Barack Obama is president. It’s economic suicide, and he at least knows that.

    Comment by Sammy Finkelman (d22d64) — 11/8/2012 @ 3:35 pm

  105. Then shall the kingdom of heaven be likened unto ten virgins, which took their lamps, and went forth to meet the bridegroom.

    2 And five of them were wise, and five were foolish.

    3 They that were foolish took their lamps, and took no oil with them:

    4 But the wise took oil in their vessels with their lamps.

    5 While the bridegroom tarried, they all slumbered and slept.

    6 And at midnight there was a cry made, Behold, the bridegroom cometh; go ye out to meet him.

    7 Then all those virgins arose, and trimmed their lamps.

    8 And the foolish said unto the wise, Give us of your oil; for our lamps are gone out.

    9 But the wise answered, saying, Not so; lest there be not enough for us and you: but go ye rather to them that sell, and buy for yourselves.

    10 And while they went to buy, the bridegroom came; and they that were ready went in with him to the marriage: and the door was shut.

    11 Afterward came also the other virgins, saying, Lord, Lord, open to us.

    12 But he answered and said, Verily I say unto you, I know you not.

    13 Watch therefore, for ye know neither the day nor the hour wherein the Son of man cometh.

    Matthew 25: 1 – 13

    Comment by scott (b8618e) — 11/8/2012 @ 3:37 pm

  106. That won’t happen so long as Barack Obama is president. It’s economic suicide, and he at least knows that.

    Comment by Sammy Finkelman — 11/8/2012 @ 3:35 pm

    Right, Sammy, the President can set interest rates “with a stroke of the pen” … not.

    Comment by SPQR (768505) — 11/8/2012 @ 3:40 pm

  107. SF, the market determines what interest rates are, not King Canute the President.

    Comment by AD-Restore the Republic/Obama Sucks! (b8ab92) — 11/8/2012 @ 3:47 pm

  108. “That [interest rates going back up] won’t happen so long as Barack Obama is president. It’s economic suicide, and he at least knows that.”

    Comment by SPQR — 11/8/2012 @ 3:40 pm

    Right, Sammy, the President can set interest rates “with a stroke of the pen” … not.

    He can’t, but Ben Bernanke can, at least so long as he gets the votes on teh open market Committee.

    And while bernanke may quit, Obama will not appoint an “inflation hawk” to the Federal Reserve Board.

    It’s whenever the low interest rate policy stops that we get into trouble.

    Comment by Sammy Finkelman (d22d64) — 11/8/2012 @ 3:58 pm

  109. Comment by AD-Restore the Republic/Obama Sucks! — 11/8/2012 @ 3:47 pm

    SF, the market determines what interest rates are, not King Canute the President.

    There is no market.

    http://www.minyanville.com/business-news/markets/articles/elliott-wave-s2526p500-spx-spy-elliott/9/17/2012/id/44036?page=full

    In conclusion, the bull case must be respected here. While the ending diagonal is still possible, the indicators aren’t really matching the pattern very well anymore. If the bears have any firepower left to Fight the Fed at this point, they’re simply going to need to prove it.

    Comment by Sammy Finkelman (d22d64) — 11/8/2012 @ 4:06 pm

  110. If you think there is a market in interest rates, explain whhy interest rates stayed extremely low all the time when prices doubled between about 1940 and 1948.

    http://artists.letssingit.com/bobby-fuller-four-lyrics-i-fought-the-law-and-the-law-won-fx4r9mq#axzz2Bg9m88vm

    Comment by Sammy Finkelman (d22d64) — 11/8/2012 @ 4:07 pm

  111. Now the weather, that’s another story.

    Comment by Sammy Finkelman (d22d64) — 11/8/2012 @ 4:07 pm

  112. There have been people from time to time who attempted to fight the Federal Reserve Board.

    They fought the Fed, but the Fed won.

    http://www.ibtimes.com/day-commodity-world-changed-262488

    Comment by Sammy Finkelman (d22d64) — 11/8/2012 @ 4:13 pm

  113. Comment by Chuck Bartowski — 11/8/2012 @ 2:36 pm

    Never saw it, my roommate in college sarcastically loved it. No thanks for reminding me of it.
    Speaking of a war on women…sheesh…

    To (semi-)quote Donald Sutherland, “It’s important to have a film like the Hunger Games in the time we live, to warn of what is possible with a crazy President like Bush Obama”.

    Comment by MD in Philly (3d3f72) — 11/8/2012 @ 4:27 pm

  114. Comment by scott — 11/8/2012 @ 3:37 pm

    True, but there have been many terrible times in the past when some thought it was the time but it wasn’t. Someday it will be, but until then, yes, it can get worse.

    Comment by MD in Philly (3d3f72) — 11/8/2012 @ 4:29 pm

  115. This is ironic because the districts were set up to get the Demo’s as many seats as possible except they couldn’t squeeze out wins in close contests.

    Depends in what state. In R states the lines are drawn to help them. Except in Texas where the Ds drew the lines to help them for over a century, and then when the Rs finally got control of the legislature and patiently waited for the next census so they could do the same, the Ds suddenly changed the rules and roped the DoJ and the courts in to say it wasn’t fair. But in general, R states do gerrymander the lines to concentrate D voters in a few hypersafe seats, while spreading R voters around into only semi-safe seats. And in D states the Ds try doing the same, but their problem is that in places like NYC it can’t be done. There are too many Ds in too small an area, and you can’t spread them any thinner.

    Comment by Milhouse (15b6fd) — 11/8/2012 @ 4:56 pm

  116. While the Fed can set nominal interest rates, they can’t set the real rate, which is determined by economic actors and their ideas concerning the time discount of money (gold) and/or currency (dollar/yen/etc). Right now, that real interest rate is very high and is reflected in the fact that the ‘stimulus’ pushed on a string and did nothing but goose the stock market a bit.

    Most of the time, governments never allow the real interest rates to be reflected in the ‘nominal’ bank rates. The closest it came, in my mind, was the Volker years.

    Comment by cdquarles (eb3949) — 11/8/2012 @ 5:13 pm

  117. That reminds me, if the Republican House really wanted to shake things up, they’d tie the debt ceiling/tax hikes to resumption of the gold standard :) /sarc, maybe :D

    Comment by cdquarles (eb3949) — 11/8/2012 @ 5:16 pm

  118. I can hear the libs now: all of this is Bush’s fault!

    Comment by Dirty Old Man (dc479b) — 11/8/2012 @ 5:39 pm

  119. Wasn’t there a post recently wanting easier money and more credit / debt?

    Comment by joel (64270f) — 11/8/2012 @ 7:06 pm

  120. “Right now, that real interest rate is very high and is reflected in the fact that the ‘stimulus’ pushed on a string and did nothing but goose the stock market a bit.”

    Do you mean “real” as in adjusted for inflation (not nominal) or some other “real”? And what is (your) “real” now? Where does one look this up?

    Comment by joel (64270f) — 11/8/2012 @ 7:07 pm

  121. joel, do you not know what the cost of money actually is?

    Comment by SPQR (768505) — 11/8/2012 @ 7:08 pm

  122. “joel, do you not know what the cost of money actually is?”

    I know that 20 year real treasury yields are negative. So when someone says that “Right now, that real interest rate is very high” I have to ask what the hell they mean.

    Comment by joel (64270f) — 11/8/2012 @ 7:12 pm

  123. joel, who is buying most of the treasury bonds being sold currently? Do you know?

    Comment by SPQR (768505) — 11/8/2012 @ 7:14 pm

  124. That would affect the nominal yields.

    Comment by joel (64270f) — 11/8/2012 @ 7:17 pm

  125. You don’t know, do you joel?

    The Federal Reserve bought a trillion dollars in treasury bonds in just the last year. Most of the treasuries sold in the last year were bought by the Federal Reserve using money that they just printed up.

    That’s what is keeping the rates low.

    How long do you think that can continue, joel? Do you have any clue what the rebound of that kind of action is going to have, joel?

    Comment by SPQR (768505) — 11/8/2012 @ 7:19 pm

  126. “My main problem with den Beste’s analysis is that he says people will flee the dollar to other currencies.” — Patterico

    “Patterico, he didn’t say that exactly. He said their willingness to accept dollars would be reduced. Hence drops against exchanges of other currency.” — SPQR

    What he said exactly was: “And once that happens, the dollar will cease to be the international currency.”

    So my question is: what would be the international currency?

    I wish someone would answer this. It has to be trustworthy and stable and there have to be a lot of them. I believe there are no alternatives.

    Comment by Patterico (8b3905) — 11/8/2012 @ 7:20 pm

  127. Well, the trustworthy part is tough, but the standard right now is being set by helicopter ben.

    Renminbi

    Comment by SPQR (768505) — 11/8/2012 @ 7:22 pm

  128. “That’s what is keeping the rates low.”

    20 year nominal rates are at 2.5 or so. But real rates are negative, and this dude says they’re high, so what is he talking about?

    Comment by joel (64270f) — 11/8/2012 @ 7:23 pm

  129. joel’s brand of feigned ignorance is starting to remind me of someone …

    Comment by SPQR (768505) — 11/8/2012 @ 7:24 pm

  130. Feigned? I really have no idea what this guy is talking about when he talks about “real” rates being high. Because as that term is used, they’re not. If y’all know what he means, go ahead and say it.

    Comment by joel (64270f) — 11/8/2012 @ 7:28 pm

  131. 126. Mechanism already in place via EU/UN/IMF initiative.

    http://money.cnn.com/2011/02/10/markets/dollar/index.htm

    Asian initiative:

    http://money.cnn.com/2011/02/10/markets/dollar/index.htm

    Comment by gary gulrud (dd7d4e) — 11/8/2012 @ 7:31 pm

  132. joel’s brand of feigned ignorance is starting to remind me of someone
    Comment by SPQR — 11/8/2012 @ 7:24 pm

    Feigned?
    Comment by joel — 11/8/2012 @ 7:28 pm

    I guess that means the ignorance is real.

    Comment by MD in Philly (3d3f72) — 11/8/2012 @ 7:35 pm

  133. “I guess that means the ignorance is real.”

    You don’t have to guess! Just read the sentence right after that:

    “I really have no idea what this guy is talking about when he talks about “real” rates being high.”

    And so I ask again: “if y’all know what he means, go ahead and say it.”

    Comment by joel (64270f) — 11/8/2012 @ 7:38 pm

  134. Even tho mortgage rates are at an all-time low or nearly so, margins on bank loans are at a record high.

    The same relation can exist in bonds, as 2 year notes pay nothing at the moment, the buyer, intending to hold to maturity, is simply stashing his money.

    But at the moment one cannot buy directly from the Treasury. The Fed pays the banks set up as Direct purchasers hefty commissions for the Treasuries sold just a couple of weeks ago.

    And these notes and bills are traded prior to purchase by the Fed on their own market by funds, banks, brokers and institutions.

    Comment by gary gulrud (dd7d4e) — 11/8/2012 @ 7:39 pm

  135. I mean real as in what it would take to make risky investments worth it over a period of time longer than most folks attention span. I don’t mean ‘inflation adjusted’ in the usual use of the phrase. I mean real in the Austrian School sense of real, which is also known as the risk adjusted time discount of money. That number, which generally isn’t public, is the one used by investors to determine if the rate if return exceeds the risks enough to make the investment worthwhile.

    Comment by cdquarles (eb3949) — 11/8/2012 @ 7:47 pm

  136. So nobody actually trades at this rate in any market that you can look at to see the number?

    Comment by joel (64270f) — 11/8/2012 @ 7:50 pm

  137. What will happen to VIPSX (Vanguard TIPS fund) when the sh!t hits the fan?

    Comment by gp (0c542c) — 11/8/2012 @ 7:51 pm

  138. A couple of sources:

    http://www.shadowstats.com/alternate_data/money-supply-charts

    and

    http://research.stlouisfed.org/fred2/series/M2V/

    While the supply of money in ‘circulation’ is going thru the roof via Quantitative Easing, the turnover or Velocity is crashing.

    Economic activity is crumbling and the Markets have noticed.

    Note that a couple of $Trillion$ is sitting on the Fed’s balance sheet as bank reserves, held against losses on investments, which the Fed purchased in MBS from the banks in 2008/9 and is resuming with QE3.

    The Fed continues pay the banks 0.25% on these reserves, free money.

    Comment by gary gulrud (dd7d4e) — 11/8/2012 @ 7:52 pm

  139. “While the supply of money in ‘circulation’ is going thru the roof via Quantitative Easing, the turnover or Velocity is crashing.”

    If either of these were different, we’d have a real problem.

    Comment by joel (64270f) — 11/8/2012 @ 7:54 pm

  140. SPQR – this is at least it’s 6th moniker. Lemonwetgood/Chol/aggs/spointer/ and others.

    Comment by JD (318f81) — 11/8/2012 @ 7:54 pm

  141. Renminbi

    Not a chance — at least in my opinion. It is totally under the thumb of the Chinese government and until that changes it will never be the world’s currency of choice.

    Comment by Patterico (8b3905) — 11/8/2012 @ 7:55 pm

  142. 137. I’d search zerohedge.com, way beyond my ken.

    I sold all mine purchased Sept. 2008 a few months back to refinance. I earned zilch because the CPI beginning in the late ’90s incorporated a 40% index on home values. Needless to say, while oil and food rose 10% per year over that time the CPI was rising in low single digits.

    Its better than a money market which could be wiped out when the EU breaks up, but US banks haven’t been extending that option to Europe for more than a year.

    No way when inflation hits your fund will keep up. Then you need to be in some commodity like AD’s ammo.

    Comment by gary gulrud (dd7d4e) — 11/8/2012 @ 7:59 pm

  143. What currency isn’t controlled by their government?

    Comment by joel (64270f) — 11/8/2012 @ 8:01 pm

  144. I’m happy to switch to redistricting commissions everywhere; i agree with the rhetoric that says legislators shouldn’t be picking their voters.

    The trouble is that commissions often aren’t neutral either, and even if by some chance they are they can be easily gamed. California’s recent experience showed that.

    Comment by Milhouse (15b6fd) — 11/8/2012 @ 8:14 pm

  145. 143. I don’t know what they do now but South Americans in the 90′s when I sometimes worked there held their savings in US dollars cash.

    With Bernanke printing US dollars the Mexican peso surged 20% in three months during QE2. A big economy like Japan or Britain holds billions in foreign currency. They would print their currency and sell it on the FX markets to lower its value and keep domestic prices stable.

    People want to hold aomw yen and pounds, so they will purchase them. If their currency were to fall, people started dumping pesos Mexico could buy pesos with yen and pounds to raise its value.

    Unfortunately no one wants pesos. Therefore it holds relatively little foreign currency.

    Comment by gary gulrud (dd7d4e) — 11/8/2012 @ 8:21 pm

  146. 139. And therein lies the problem. At some point the economy will hit a floor, business will pick up, and the demand for credit will exceed the risk to banks in making loans, e.g., with those reserves mentioned above.

    We don’t really know how much debt the banks have, especially in zombie commercial real estate, but at some point the velocity of money will turn up.

    All of the debt not purchased by the Fed is short term, something like 70% is 3 year or under. We spent something like $400 Billion at virtually zero percent interest to maintain the debt last year.

    Comment by gary gulrud (dd7d4e) — 11/8/2012 @ 8:42 pm

  147. I think Deion Sanders super glued caterpillars on for eyebrows

    Comment by JD (318f81) — 11/8/2012 @ 8:50 pm

  148. OT, this is the fellow, that Brennan burned his agency’s asset, his father is no longer Crown Prince, but he earned a promotion,

    http://www.chathamhouse.org/media/comment/view/187023

    Comment by narciso (ee31f1) — 11/8/2012 @ 9:37 pm

  149. So my question is: what would be the international currency?

    I wish someone would answer this. It has to be trustworthy and stable and there have to be a lot of them. I believe there are no alternatives.

    There is no rule that says that there has to be an international currency, and it is my opinion that there won’t be, any longer, if the dollar crashes.

    Comment by Steven Den Beste (99cfa1) — 11/8/2012 @ 9:39 pm

  150. Revo is going survival mode, I think we all need to consider it on the blogs. There will be no “taking back the country”, not for years, if ever. Hard times need to happen.

    Comment by Erick Brockway (f475a7) — 11/8/2012 @ 9:43 pm

  151. Wrong link, this is the “Plan B” post:

    We are going to talk about tax loopholes and ways to get around Obamacare mandates. We are going to talk food prep and how to stretch a budget. We will talk about economizing in a hard economy and where to invest. We will discuss businesses that are with us and those that are against us. We will talk entertainment and recreation.

    Comment by Erick Brockway (f475a7) — 11/8/2012 @ 9:48 pm

  152. The only thing you have is the British pound sterling but that’s not something with a particularly stable value.

    If you worry hat money could lose half its value in a year then commodities become attractive.

    Comment by Sammy Finkelman (4e1aa8) — 11/8/2012 @ 10:02 pm

  153. 148. From that article Narciso linked to:

    Moreover, Prince Mohammed, who is 53, has strong relations with the US, as does another recently elevated third-generation Al Saud, Prince Bandar bin Sultan bin Abdel-Aziz Al Saud, the new head of intelligence….

    …More dramatically, in July this year, Prince Bandar, who is 63, replaced another second-generation prince, Prince Muqrin bin Abdel-Aziz Al Saud – who is not much older, being 67, and one of the younger half-brothers of the king, but who was seen as disadvantaged by having a non-Saudi mother – as head of Saudi intelligence. Prince Bandar is a son of Prince Sultan, the longstanding defence minister who died last year, who also preceded Prince Nayef as crown prince (meaning that while the previous two crown princes died before the king, their sons have nonetheless been able to advance further and faster than their third-generation peers). He is an ex-ambassador whose more than two decades in Washington left him with extensive US connections; he is also seen as one of the more hawkish Al Saud when it comes to Iran and Syria (Iranian media carried false claims that he’d been assassinated by Syrian militias in July).


    He’s not hawkish – he is just against Assad – maybe decided that Assad is lost cause – and he’s trying to replace him with bad people of his own choosing.

    The Benghazi attack was probably all about keeping the arms flowing to his own people. and the U.S now seems to be going along with his attempt to control the Syrian opposition.

    Syrian Opposition Meets to Seek Unity – New York Times Nov 8 2012

    …The change was pushed by the United States and Qatar…


    Qatar, where Al Jazeera is based. Al Jazeera, that used to publicize tapes from Osama bin Laden. Qatar, whose leader recently visited Gaza, and whose visit was immediately followed by a barrage of rockets aimed at Israel.

    All this is supposed to be a way of stopping Jihadis. Jihadis that may very well be funded by Prince Bandar, who then uses them as a reason to be given more control. This is a bit of a hunch, but not all that much.

    He probably murdered Vincent Foster and now he probably murdered Christopher Stevens in Libya.

    Comment by Sammy Finkelman (4e1aa8) — 11/8/2012 @ 10:27 pm

  154. One of the things that worried me about a Romney victory was that he’d get blamed for the inevitable inflation of the Obama years. So, a silver lining: when inflation takes off in 2014, there will be no one but Obama to take the blame.

    We need to be ready at the midterm to retake the Senate. Preferably with fiscal conservatives who don’t get caught up in questions about rape.

    Comment by Kevin M (bf8ad7) — 11/9/2012 @ 12:16 am

  155. there will be no one but Obama to take the blame.

    There will always be Bush.

    Comment by MD in Philly (3d3f72) — 11/9/2012 @ 4:21 am

  156. Bush? When that Egypt protest thing broke, the Pravda media and DNC were all over Romney for speaking out. Choom gets all the glory for things that are ok like killing Osama and someone else takes the fall for bad things. I see that movie dude in Ca. got a year in jail. Wonder if the Nation of Islam jailbirds will ice him? Free Speech? that’s for libtards and Muslims. Take heart- at least most of the world seems to adore Comrade Urkel. Feel like I’m in an alternative universe. Victor Davis Hanson talks about how truly awful California has become and liberals tell me that state is just honky dory.
    Still wonder why Repubs boycotted election compared to 2008. One explanation was WWII and Korean vets came out in droves for McCain and many have since died off. Or is a Muslim Trojan horse preferred over a Mormon? Blacks seem to opine that Romney would throw them out of work? Hopefully it all works out for the best in time. Now Big Sis for Attorney General? Why not Jamie Gorelick? She seems to be a Forrest Gump in the middle of chaos 911 and Housing meltdown.

    Comment by Calypso Louis Farrakhan (e799d8) — 11/9/2012 @ 5:10 am

  157. Bottom line:

    http://www.zerohedge.com/news/2012-11-08/guest-post-next-four-years-wont-be-good-last

    Reality is a faithless skank, with no regard for hope or change.

    Comment by gary gulrud (dd7d4e) — 11/9/2012 @ 7:10 am

  158. “Victor Davis Hanson talks about how truly awful California has become” VDH also wrote that he’s staying in Cali no matter what. The weather is nice or something.

    Comment by gp (0c542c) — 11/9/2012 @ 7:23 am

  159. What should you and I do now?

    If you believe that inflation and rising interest rates are a virtual certainty, don’t go survivalist in the Texas desert, figure out a way to profit from the situation.

    One idea:

    Buy an exchange-traded fund (ETF) that is designed to profit from increases in the yields of long-term Treasury bonds.

    TBF, TBT and TMV are the stock symbols for funds that are built to make money as T-bond yields rise.

    And they will rise in the coming years. That’s a no-brainer.

    So invest a little money, then go play with the armadillos.

    Comment by LANewsboy (e13fd8) — 11/9/2012 @ 11:30 am

  160. This is a communication to Steven.
    Please come out of the forest and join us again. You do not have to listen to others, just tell us what you think. If you want then use a pen name, but please come out a write again. You analysis will make a difference, being clear and concise. Help us stop this wave, we love America, for the dogs have been released and one wonder who they bite first. Respectfully submitted, SgtPete

    Comment by SgtPete (0eab9d) — 11/9/2012 @ 11:49 am

  161. gp, a greek does not abandon the olive trees and vineyards voluntarily.

    Comment by SPQR (2d10d1) — 11/9/2012 @ 12:22 pm

  162. Bulletin: CIA Director David Petreaus resigns, admits to poor judgement in having an affair.

    Doe this mean he doesn’t testify befoe Congresss.

    Q. When did this affair begin? Whose idea was it? Who knew? For how long?

    These facts are important because we need to know if this affair (or if it is long term, its discovery) is a coincidence or not.

    I suppose we’ll get clues and details in tomorrow’s and Sunday’s papers. But the subject may be dropped so it is important to scour all sources of information

    Comment by Sammy Finkelman (da29ec) — 11/9/2012 @ 1:12 pm

  163. Inflation will not start in 2014, because Obama will not appoint an inflation fighter to replace Bernanke. (inflation only starts if you “fight” it)

    Comment by Sammy Finkelman (da29ec) — 11/9/2012 @ 1:17 pm

  164. I think Boehner expected the election to settle something. The whole cast of characters is back, except for a changes in a few people, with the Democrats having two more sets in the Senate.

    The Republicans can still filibuster and Harry Reid probably still cannot pass a budget resolution without amendments he wants to avoid.

    When a change is impending the lame duck Congress can do something, but nobody’s bargaining position is going to be worse by much, like it was in 2010.

    Comment by Sammy Finkelman (da29ec) — 11/9/2012 @ 1:18 pm

  165. Petraeus resigns!

    Comment by Icy (d0fdc3) — 11/9/2012 @ 1:22 pm

  166. I agree with every point in this article. My problem is simply that it doesn’t matter.

    There are far too many in the country who have no concept what numbers actually signify. To them a million, is a billion, is a trillion. There is no actually understanding of the issue until the crash happens. I wish this was only among the uneducated. But many supposedly “educated” people lack this understanding also. Add in those receiving their free stuff and the issue only compounds.

    This election was the last chance to deal with the situation. And the country blew it. I hate to say this but its over. I am in the process of cleaning out my bank and brokerage accounts and liquidating into cash. The safety deposit box will make me look impoverished so I will not be a target for the government. Beside what can you really invest in anyway? Nothing interest bearing because the rates are so low. The market was counting on a Romney victory and we can already see reality setting in. And the Government seems unable to stabilize anything because stability requires competence and negates graft.

    I have never given up before. I have alway held out hope. But this was it. Obama couldnt stop the literal rise of the water as he promised, and he wont be able to stop the figurative ones either.

    Comment by Stinky Weaselton (f0c487) — 11/9/2012 @ 1:29 pm

  167. Petraeus resigns!… and it’s time for Boehner to follow him (or at least step down).

    Comment by AD-Restore the Republic/Obama Sucks! (b8ab92) — 11/9/2012 @ 1:59 pm

  168. If you think inflation hasn’t been going gangbusters, you haven’t been looking at the prices for gas and food.

    It’s just that they are left off the ‘official’ inflation indexes.

    The gains in the stock market, too, are really just pricing in the increased money supply. The stock market hasn’t done much of anything, just the numbers have gotten bigger with each ‘quantitative easing’.

    Of course, now they are going down to price in the effects of Obamacare taking place.

    Comment by luagha (5cbe06) — 11/9/2012 @ 4:26 pm

  169. The question is: what should you and I do?

    We have to make people try to understand the problem. We have to make this a priority. Because a crash is going to be very, very hard on our children.

    The first thing we need to do is CLAIM it. CLAIM IT NOW.

    Not later. NOW.

    We need to make it VERY LOUD and very CLEAR, not let the media stifle us, so they can claim ignorance and so forth later on the part of the Dems. We allowed the $@^%$@%&$@&@& bastards to do this on the RE bubble, and what happened? The media happily blamed it on the GOP, when anyone paying attention knows the %$@^%$#& Dem committee members stonewalled any and all action (“I want to roll the dice some more” — Barney Frank ON VIDEO) on it (I DO still blame the GOP because they had the power to override that, but that’s a sit of omission, not a sin of commission).

    We need to LAY IT OUT ahead of time. I can say, FLAT OUT, that the media will then paint THAT as the cause of it, but that’s not something we can do.

    Whatever happens, the media will paint it as the GOP’s fault — “they were obstructing the perfect wonderful Dems from dealing with the problem” — as usual. But if there is any hope of saving this nation, it happens after the ^%#&%$@@&% boomers start to THANK GOD FUCKING FINALLY die off.

    Comment by Smock Puppet, 10th Dan Snark Master and Aviary Enthusiast (8e2a3d) — 11/9/2012 @ 10:35 pm

  170. From Mark Steyn:
    The good news is that reality … doesn’t need to crack 270 in the Electoral College. Reality can get 1.3 percent of the popular vote and still trump everything else. … Obama increased the federal debt by just shy of $6 trillion and… grew the economy by $905 billion. … in order to generate every $1 of economic growth the United States had to borrow about $5.60. There’s no one out there on the planet … who can afford to carry on bankrolling that rate of return. … In order to avoid the public humiliation of a failed bond auction, the U.S. Treasury sells 70 percent of the debt it issues to the Federal Reserve – which is to say the left hand of the U.S. government is borrowing money from the right hand of the U.S. government. It’s government as a Nigerian email scam, with Ben Bernanke playing the role of the dictator’s widow with $4 trillion under her bed that she’s willing to wire to Timmy Geithner as soon as he sends her his bank account details.

    If that’s all a bit too technical, here’s the gist: There’s nothing holding the joint up.

    left hand of the U.S. government is borrowing money from the right hand of the U.S. government.- Except there is no money in the “right hand”, correct?

    Comment by MD in Philly (3d3f72) — 11/10/2012 @ 5:32 am

  171. MD in Philly, its turtles all the way down.

    Comment by SPQR (768505) — 11/10/2012 @ 8:42 am

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