The larger lesson from Geithner’s China trip
[Posted by Karl]
Treasury Secretary Timmy Geithner went to China this week to reassure folks that China’s huge holdings of dollar assets are safe. A student audience at Peking University laughed at him. Yu Yongding, a former central bank adviser, told Bloomberg that “[i]t will be helpful if Geithner can show us some arithmetic,” as though Geithner was a remedial student.
China (and other holders of Treasury debt) are uneasy because the Fed’s quantitative easing program seems ineffective. The Fed created a trillion dollars out of thin air in March to purchase Treasury bonds and mortgage securities, but the yield curve is steepening.
Will the Obama administration’s approach launch America into an inflationary spiral like Argentina? Or will all of that freshly printed money and self-purchased debt nevertheless fail to prevent a painful period of Japanese-style deleveraging?
I freely admit to not knowing enough about economics to know the answer to those questions. What I do know is that Fed officials are almost equally clueless in diagnosing the current state of the bond market:
The Federal Reserve is studying significant moves in the U.S. government bond market last week that could have big implications for the central bank’s strategy to combat the country’s recession.
But the Fed is not really sure what is driving the sharp rise in long-dated bond yields, and especially a widening gap between short and long term yields.Do rising U.S. Treasury yields and a steepening yield curve suggest an economic recovery is more certain, meaning less need for safe haven government bonds and a healthy demand for credit? If so, there might be less need for the Fed to expand the money supply by buying more U.S. Treasuries.
Or does the steepening yield curve mean investors are worried about the deterioration in the U.S. fiscal outlook, or the potential for a collapse in the U.S. dollar as the Fed floods the world with newly minted currency as part of its quantitative easing program. This might be an argument to augment to step up asset purchases.
Another possibility is that China, the largest foreign holder of U.S. Treasury debt, has decided to refocus its portfolio by leaning more heavily on shorter-term maturities.
With officials still grappling to divine the factors steepening the yield curve, a speedy decision on whether to ramp up the Treasury debt purchase program or the related plan to snap up mortgage-related debt seems unlikely.
Yet the notion that the Fed and Treasury know what they are doing is the foundation upon which Pres. Obama’s economic program is built. Indeed, the conceit that statist bureaucracies of experts, left to their own devices, can steer the US economy to that third bowl of porridge that is neither too hot nor too cold, but just right, has been a tenet of progressivism since its inception. The real lesson of Geithner’s trip is that he had to make it. The response to his message reveals that even the People’s Republic of China has learned something about the limits of statist bureaucracies. Eventually, even the Obama administration may learn that lesson. America can only hope that lesson gets learned before the economy ends up in the wrong bowl of porridge.
–Karl
Viva Peron! Viva!
SPQR (72771e) — 6/2/2009 @ 4:29 pmOver at Frum’s new blog, his putative “new Republicans” are certain that the bond market is happy with Obamanomics.
At the age of 18, I was a Democrat like the rest of my family until I took Economics in college. Unfortunately, I don’t think they teach the same Economics anymore.
Mike K (2cf494) — 6/2/2009 @ 4:42 pmI actually wake up in the middle of the night worrying about the disastrous road these arrogant and clueless narcissists are taking us down. I have no idea what we’re facing in the next few years, but the foreboding is palpable – to any sentient being paying attention. (That rules out all Democrats and half the Republicans.)
I think Obama is officially a terrorist. He’s terrorizing all of us. Some of us know it.
Peg C. (48175e) — 6/2/2009 @ 4:48 pmMy guess, and it’s been around 10 years since I took my MBA courses, is that the yield curve is getting steeper because people are afraid of the coming inflation and are demanding higher interest rates to help cover the risk.
But it’s only a guess.
Dr. K (0fdffa) — 6/2/2009 @ 5:08 pmDr. K, that includes the Chinese. Apparently the Fed has missed the fact that China is among the “investors are worried about the deterioration in the U.S. fiscal outlook, or the potential for a collapse in the U.S. dollar”, which is why China has “decided to refocus its portfolio by leaning more heavily on shorter-term maturities.” China is also buying hard assets, an inflation hedge.
LarryD (e80853) — 6/2/2009 @ 5:37 pm1. Too much jargon about “steepening yield curves” etc only serves to obscure the simple story: fewer people want US bonds cuz they see them as too risky, so the Admin has had to order Treasury to print enough money to make up the diff today, and they’ll have to print more tomorrow, too.
2. All debts are eventually repaid, if not by the borrower then by the lender. The Chinese are learning this old lesson the hard way.
3. The Chinese hold too much US debt to have a hope of unloading the bulk of it to anyone. If they’re smart – and they are – I expect they’ll instead use it to buy up companies and property and other tangible goods before the Ameribuck pancakes.
Americans themselves will be the last to admit to their dollar’s demise, so it’ll be within the US that the Chinese will be able to trade the IOUs for property later into the game than anywhere else.
4. If they’re still smart, they’ll also make their US purchases low-key thru as many false fronts as possible. What other choices do they have?
5. US political insiders are looting what they can, while they can. This will continue for as long as they and their media friends can hide the extent of the financial disaster now unfolding. In the end, I don’t see how a national bankruptcy can be avoided.
6. Inflation, what a word. Anywhere else the same process is more accurately labeled as what it is: dilution. The govt is printing more money, thereby diluting the value of existing money.
They are doing this in order to abscond value for themselves, which is why some of us have long called it the “dilution tax.” Govt’s love it cuz they can steal from you while claiming to be “fighting” the very problem they create. Cute trick, and it works.
7. Expect a revision of the CPI basket. Throw in higher weights for housing and for computers and such and pretty soon you can hide a lot of other inflation elsewhere. This trick has been used 15-20 times (I forget the number) over the years and yet economists still happily compare one basket to another as if they were the same.
As Abe Lincoln used to joke, even if you call a tail a leg, a dog still only has four legs, cuz calling a tail a leg doesn’t make it so. Unless you’re an economist, apparently.
8. Back to the hockey game now. Det 2, Pit 1, 1st period.
ras (20bd5b) — 6/2/2009 @ 5:41 pmI am also purchasing gold. I suggest others follow.
Dr. K (0fdffa) — 6/2/2009 @ 5:43 pmHide it well, Dr K. You know the history.
ras (20bd5b) — 6/2/2009 @ 5:47 pmWhen a communist dictatorship’s showing more good sense than the US in terms of economic policy, that’s not only a bad sign, it’s assinine.
Dmac (1ddf7e) — 6/2/2009 @ 6:06 pmGeitner has all the gravitas of an ice cream float.
SPQR (26be8b) — 6/2/2009 @ 6:13 pmThe Russians are already laughing at Obama. Somebody posted that piece from Pravda here. Now the Chinese have joined in. Here I keep getting told the world holds him in such high esteem but he and his minions get laughed at. Europe gives him nothing after his apology tour there. Whay’s up with all this supposed new found respect for America? Is it hiding somewhere?
daleyrocks (5d22c0) — 6/2/2009 @ 6:21 pmIts what we really always knew, daleyrocks, that the world respects America’s strength not mealey-mouthed crap from the left wing.
SPQR (26be8b) — 6/2/2009 @ 6:24 pmToday’s liberals would like to be the most popular guys on the planet but they’ll settle for being the coolest kids on the block.
DRJ (180b67) — 6/2/2009 @ 6:28 pmDRJ – A bunch of Heathers, just like they sounded on that pirated Journo-list conversation.
daleyrocks (5d22c0) — 6/2/2009 @ 6:34 pmI remember Russia and the other totalitarian states laughed at Carter as well – only thing, we weren’t laughing too much after four years of his inanity.
Dmac (1ddf7e) — 6/2/2009 @ 6:37 pmRemember when we were told O was going to restore our reputation around the world?
jamrat (a80e48) — 6/2/2009 @ 6:39 pmThe coming inflation will be between Argentina and Zimbabwe levels…
Thanks…
Here I thought he was Chimpy ObaMussolini, but instead he turns out to be ObaMugabe…
Appointing the villiage idiots and his jesters to run treasury and GM…
Actually, I agree with much of what ras said in #6.
Don’t ket them pay for Hummer, or anything else, with treasuries!
Make them trade those to the Arabs and the Eurotrash…
You know, spread the wealth around!
I always enjoy reading your essays Karl…
Bob (99fc1b) — 6/2/2009 @ 6:40 pmDmac – You said exactly what I was thinking, it is sad and scary when the totalitarian ChiComs know more about economics than our folks.
JD (df39e3) — 6/2/2009 @ 6:48 pmInflation in CPI (2008)…
Japan……..zero %
EU ………. 1.8%
Canada……. 2.4%
USA ……… 2.7%
China ……. 4.7%
Argentina … 8.5%
Venezuela .. 20.7%
Zimbabwe .. 470%
Nixon imposed Wage&Price Controls and took us off of Gold when inflation was 3% at the start of the 70’s.
AD - RtR/OS! (f5973e) — 6/2/2009 @ 6:57 pmBy the late 70’s, inflation was running over 10%, mortgages were costing 15%+.
If we start topping the rate above for Argentina, things will start to get ugly.
Stratfor is more optimistic than I am:
First, American industrial prowess remains unrivaled in the world. In 2006, U.S. industrial production equaled $2.8 trillion — the largest in the world, more than double that of second-place power Japan, and more than the production of Japan and China combined. The collapse of GM, the symbol of American manufacturing might, will not put a dent in this industrial output.
In terms of value added from the United States’ entire industrial output, the automotive sector (counting both the suppliers and automotive manufacturers) accounted for only 5.54 percent. Motor vehicles alone accounted for just 2.49 percent, with the rest roughly representing auto-parts manufacturers’ shares. Computer and electronic products, by contrast, accounted for 7.64 percent, non-transport machinery (such as capital goods) accounted for 5.01 percent and aerospace accounted for 3.26 percent. In fact, if computers and electronics are combined with other “high-tech” manufacturing categories (such as communication equipment; aerospace; semiconductor and other electronic components; navigational, measuring, electromedical, and control instruments; and other electrical equipment), they account for more than 20 percent of total U.S. industrial output.
They think Obama will have a negligible effect long term but I’m not so sure. I’m not sure, for example, that the Iranian revolution was inevitable and I don’t think the inflation of the 70s, with the consequent destruction of the S&L industry, would have happened if Ford had won the election.
Interestingly, Dick Cheney ran Ford’s campaign in 1976 although he had never run a national campaign. If the election had been one week later, or if Ford had not made the gaffe on Poland, I don’t think the terrible inflation would have taken off like it did and I think Ford would have supported the Shah.
Even then, Cheney was the embodiment of competence. He was in his 30s.
Mike K (2cf494) — 6/2/2009 @ 7:01 pm“I think Ford would have supported the Shah.”
Wha?
Did Ford have a miracle cancer cure?
poon (093c46) — 6/2/2009 @ 7:09 pmYeah, poon is Staunch Brayer.
the nk who wants every single idiot in Washington to fail (157acd) — 6/2/2009 @ 7:18 pmGood Allah. This one is relentless.
JD (df39e3) — 6/2/2009 @ 7:18 pmIn times like these, we can’t be rewriting history, JD.
In addition to the fanciful retelling of the Iranian Revolution here, we seem to have forgotten that Republican presidents racked up $10 trillion of America’s current $11 trillion national debt.
Times like these call for honesty.
Geithner went to China to apologize for Bush.
poon (093c46) — 6/2/2009 @ 7:26 pmWhatever he went to do poontang, they laughed at him.
gus (b1a191) — 6/2/2009 @ 7:30 pmYou see, poontang, Opie and his and of Merry Hacks, have you fooled. You are in the cult.
The rest of the world finds this very amusing.
Opie is too stupid to see everyone laughing at him.
But Geithner witnessed it first hand.
Poon, you’re used to people laughing at you. You’re a little….”slow”.
Yeah, poon is Staunch Brayer.
Told ya.
Paul (creator of "Staunch Brayer") (290fb9) — 6/2/2009 @ 7:31 pmI remember Russia and the other totalitarian states laughed at Carter as well – only thing, we weren’t laughing too much after four years of his inanity.
The sequel to those four years was great, however. Just a reminder to keep hope alive, that the change we need will arrive.
Brother Bradley J. Fikes, C.O.R. (0ea407) — 6/2/2009 @ 7:34 pmIn addition to the fanciful retelling of the Iranian Revolution here, we seem to have forgotten that Republican presidents racked up $10 trillion of America’s current $11 trillion national debt.
Please proivide proof of this assertion,
Paul (creator of "Staunch Brayer") (290fb9) — 6/2/2009 @ 7:34 pmStaunch Brayerpoon. Show your work.Bob, Opie doesn’t know anyone who is competant. He has no experience at anything. He couldn’t pick Rev Wright for Secretary of State so he gave the dog a bone and gave Rodham the job. She is in no way qualified to be our Chief diplomat.
He couldn’t give Bill Ayers the Sec of Education job, so he picked the Chicago fuck up.
Obama has no clue what he is doing. Soros and Emanuael are changing his diapers on a daily basis.
And VOILA!! A Soros accolyte with a Poli Sci degee, 31 years old appears on the scene to dismantle GM. A wealthy Socialists pet boy, with no business experience at 31 years of age is put in charge of dismantling GM.
THIS IS BEYOND FUCKED UP.
gus (b1a191) — 6/2/2009 @ 7:34 pmpoon makes the legally brain dead look good.
daleyrocks (5d22c0) — 6/2/2009 @ 7:35 pmBrother Fikes, there is a big difference. Carter loved America but was incompetant. Opie hates America and isn’t calling the shots.
gus (b1a191) — 6/2/2009 @ 7:36 pmShow your work.
Brother Bradley J. Fikes, C.O.R. (0ea407) — 6/2/2009 @ 7:36 pmTimmy Geithner’s arithmetic.
Poon is a troll. Nothing more.
gus (b1a191) — 6/2/2009 @ 7:37 pmgus,
Brother Bradley J. Fikes, C.O.R. (0ea407) — 6/2/2009 @ 7:38 pmCould be, but I anticipate the eventual revulsion to The Precious will have similar results. That’s what I was getting at.
You know, I promised DRJ I’d just step around the trolls but sometimes …
nk (157acd) — 6/2/2009 @ 7:38 pmDid Ford have a miracle cancer cure?
Is “poon” as much of an asshat as humanly possible? Yes!
Dmac (1ddf7e) — 6/2/2009 @ 7:41 pmHere’s a chart for you Paul:
http://www.lafn.org/gvdc/Natl_Debt_Chart.html
Can we please stop pretending Republicans are models of fiscal restraint and the Democrats are the big spenders?
poon (093c46) — 6/2/2009 @ 7:41 pmBrother Fikes, this man revolted me the first time I heard him speak. He is a cold blooded reptile. Read his own written works. He is a con man, and if you are willing to be conned, and if you are willing to close your eyes to facts.
gus (b1a191) — 6/2/2009 @ 7:42 pmHe will con you. He conned McCain. Clearly, Sarah Palin sees this guy for the con-job that he is. His complete dispassionate measured meter is that of a con. His lifes story sends up so many red flags his won words hang him. The media and the cult weren’t paying attention.
BTW, the troll named “Deval” is really Lovey/Emp/whatever. Check the earlier thread.
Dmac (1ddf7e) — 6/2/2009 @ 7:42 pmHere’s a chart for you Paul:
The “source” is from another Dem think tank – awesome refutation there, asshat.
Dmac (1ddf7e) — 6/2/2009 @ 7:45 pmI’ve seen the libtard dodge before.
It’s quite simple.
Name a program that liberals want to cut.
Just one.
gus (b1a191) — 6/2/2009 @ 7:46 pmgus,
He will con you.
No, he won’t. Unlike many of my colleagues, I’ve never swooned over him. You can’t disillusion someone who was never illusioned in the first place.
You can trust me, I’m a reporter. 😉
Brother Bradley J. Fikes, C.O.R. (4b2068) — 6/2/2009 @ 7:51 pmA long time ago, I started reading David Wingrove’s “Chung Kuo” series of science fiction books. I stopped, because they were long and had no semblance to reality at the time.
I may need to revisit them so I can help plan the future of my children.
Ag80 (425b0a) — 6/2/2009 @ 7:56 pmRamble #1- Since The One has promised to heal the sick, control the weather, and restore the boundaries of the oceans, controlling the US economy should be simple.
Ramble #2- I have heard several people wonder out loud whether significant inflation is actually a goal, as a way of dealing with the incredible debt burden. Seems like it makes sense from a superficial point of view, but I’m sure there would be a bigger price to pay somewhere along the line.
Ramble #3- The Russians are laughing at the US making “the same mistakes the Soviets did for 70 years” going down the path of socialism, but to learn that one needs to read Pravda, not the NYT.
The Chinese are laughing at Geitner’s hawking of the state of the US economy, but you are not going to find that easily in the NYT either.
Obama thinks he demonstrates his moral superiority to the world by promising to close Gitmo, without bothering to figure out how, and the MSM buys it.
Meanwhile, two thirds of Americans disagree with closing Gitmo, and the vast majority of Americans don’t like what just happened to GM, but such dislike of the One’s policies do not get attention.
At what point will it become obvious to the majority of the American public that the MSM has all of the accuracy and reliability of “Baghdad Bob”? (Wasn’t that the nickname of the fellow who broadcast how the Iraq forces were in control while the US was on their way to take Baghdad?)
Will it be by fall of 2010?
Will they remember it in the fall of 2012?
Will the MSM ever come out of their delusion and see it for themselves?
MD in Philly (3d3f72) — 6/2/2009 @ 7:57 pmBrother, I don’t mean he’ll con “you”. I mean the average idiot who doesn’t think. Parents and schools no longer teacher critical thinking skills. I’m not kidding. My 8 year old son is quicker on the draw than most adult liberals I know. Liberals believe what they want to believe. They are easy marks for con men.
gus (b1a191) — 6/2/2009 @ 7:58 pmThey want to believe that there is a free lunch. They cast themselves in the role of “caring more”. Con men feed on suckers like that.
Obama understands the con game. His Mom and 2 Muslim Dad’s were grifters of the lowest order. He learned dishonesty at his mothers bosom. He learned to manipulate people. He says so in his books.
Dmac,
BTW, the troll named “Deval” is really Lovey/Emp/whatever.
Which thread had that revelation?
Hiltziking is deceptive and unfair to the others who post honestly. Perhaps the blog gods can intervene and tell it to stick to one name.
Brother Bradley J. Fikes, C.O.R. (4b2068) — 6/2/2009 @ 8:00 pmMD, much of Obama’s cult pays no attention to these things. If you are on the dole or if you owe your existance to the goverment and if are mal-educated, miseducated, under-educated or just plain stupid. You’ll follow the path of least resistance. ACORN is trying to see to it that the aforementioned losers vote and vote often.
gus (b1a191) — 6/2/2009 @ 8:02 pmThe educated mainstream Patriotic Americans need to shout, we need to vote and we need to bone up on the wrongs of this man and his posse.
gus,
Brother Bradley J. Fikes, C.O.R. (4b2068) — 6/2/2009 @ 8:02 pmUnderstood. I was just playing along for comic effect. And yes, I know this really isn’t a comedy we’re facing.
____________________________________
…A student audience at Peking University laughed at him.
….The Russians are already laughing at Obama.
…I remember Russia and the other totalitarian states laughed at Carter as well
When I was reading the words below, I said to myself that it would be quite appropriate if a laugh track were playing in the background. Or, for that matter, if the sound of live laughter and snickering from people like Iranian president Mahmoud Ahmadinejadis was in evidence.
The foolishness and milquetoast naivete — the kum-bah-yah-pushover qualities — of the guy now in the Oval Office, as signified by the following, is so astounding and stereotypical, that I’d almost believe this AP report actually was a parody of a so-called useful-idiot liberal:
* Of course, someone of the left (Hi, Barry Obama!) wouldn’t have fretted over the idea of the West imposing its values on another society if he or she were dealing with, say, the policy of apartheid in South Africa. And I won’t mention that such a nation never posed a political/military threat to the US the way that Iran does.
Mark (411533) — 6/2/2009 @ 8:04 pmIt’s a Shakespearean, Tragic Comedy.
gus (b1a191) — 6/2/2009 @ 8:05 pmAnd Opie is the protagonist is Comedy of errors.
Mark, Obama sees no problem with libtards imposing their lack of values on us.
No transfats,
No Chocolate milk.
Tax soda,
Ban smoking,
Tax cooking oil,
Ban light bulbs,
Ban SUV’s,
Ban drilling,
Control banks,
Control mortgages,
Control auto industry and choices of cars.
Ban political speech.
Impose radio censorship in name of fairness.
Liberals want power. You need to be silenced.
gus (b1a191) — 6/2/2009 @ 8:09 pmOh, I agree gus, and especially your earlier comment about a total lack of critical reasoning skills.
In spite of that, by 2:1 margins the public disagrees with the plan to close Gitmo and 2:1 (or more) with the birth of government motors. Knowing things will only get worse gives me hope that a majority realize the sham that the MSM is (in general) and will start to assume the truth is found in the opposite of what they say.
Yes, the murder of the abortionist is an issue, but how many have also heard that Monday in Kansas(?) 2 soldiers were shot, 1 killed, by a US citizen who had converted to Islam and recently returned from a jihadist training camp in Yemen?
Listening to Hewitt tonight, a 13 yo calls in and asks if “the mess we are getting into will be solved by the time he gets out of college, or will he and his peers have to put things straight.” When told it will be up to him, he replied, “That stinks”.
MD in Philly (3d3f72) — 6/2/2009 @ 8:15 pmIIRC, it is congress that approves all spending.
I have long felt that the reason that Americans tend to, on average, select presidents that are more fiscally conservative than their Congress is simple enough:
If it’s gonna be a porkfest anyway, then logic dictates one should vote for a porker, lest one’s district subsidize the others. Sure, pork can waste 50% or 80% or more of the bucks, but better to get one’s share of the remainder than to get nothing at all.
But one also knows that the best of all worlds is to end the pork, downsize govt, and decentralize by putting more power in the hands of the states and of the people. Micro-management just doesn’t work and everyone knows it. Even the Marxist theorists know it`s just a con for the gullible and occasionally come out and even admit as much.
So for the office of president, where “pork for me but not for thee” is moot, one can vote one’s beliefs, rather than vote “strategically.” And the electorate favors smaller govt candidates.
This is a fundamental pt that people such as those running the R party often miss. But when a true small govt candidate / movement comes along, it usually does very well provided it has a chance of actually winning.
This is why even a few fiscal spendthrifts in the R party (which has less of them than do the D’s, but has some) help the D’s so much. The odds of winning enough power to roll back the pork drop with even, say, a few extra Senate seats in the hands of the Pork Caucus, and we’re back to the “strategic” reasons to vote a porker in.
If the R’s wanna win w/the economic voters, they need a cohesive, consistent message across the board: elect us and we’ll return you to the days of smaller govt. If they can`t promise that, if there are even just a handful of R porkers to go along with the usual bushel’s worth of D porkers, then the D`s will win and the looting will continue.
You guys really need a good third party.
ras (20bd5b) — 6/2/2009 @ 8:15 pmMark – It is truly a beautiful thing that Obama believes that Iran should have nuclear power for electricity generation, but that the United States should build no more nuclear power plants of its own to become more energy independent.
D’OH!
daleyrocks (5d22c0) — 6/2/2009 @ 8:29 pmThe Fed knows exactly what is going on, and it’s criminal of the media to go along with the faux head scratching, just to calm the rubes. Printing money causes inflation and devaluation. Politicians try to avoid causing anyone pain so they print more money instead of letting the value of assets come back to earth. It’s a political conundrum, not an economic one.
Patricia (2183bb) — 6/2/2009 @ 8:38 pmThe chances of gold being confiscated as happened with FDR is miniscule, and would have to be for reasons other than back then [a very scary thought, actually]. For gold is no longer money. It was confiscated by that administration in order to facilitate what we call reflation today. With no gold standard in place, today’s reflation is accomplished by monetization of debt among other monetary manipulations. Gold, along with other precious metals, has become simply another asset with positive and negative attributes for holders and non-holders. Easily hidden, pays no interest to be reported, physically transportable, convertible to virtually any global currency…just to name some aspects of precious metals I deem of value. However, the one that I’m appreciating currently is that precious metals are vulnerable to buying panic when fiat currencies are over printed making them less effective as holders of wealth. This can be witnessed best in mining stocks, which were the best performing industrial stocks in the last depression not coincidentally in my opinion.
I admit to having my doubts when I began buying PM’s in 2003, yet over time I realized seeing is believing. One thing I always try to keep in mind is that these currencies are shifting sands, and one day we may see monetary contractions which will make cash the king again. Old hands always keep a nice cash hedge handy, whether in USD or some basket of currencies.
allan (7fc978) — 6/2/2009 @ 8:39 pmBack in the early 80’s, Japan had a realestate bubble burst, bringing prices back to sane levels, and the banks were left holding a mountain of worthless paper. The Govt responded with massive forced lending and unprecedented spending on public works projects in an effort to stimulate consumer spending and restart growth.
What they ended up with is what they call “The Lost Decade”, now 30 years long.
We have done EXACTLY what the Japanese did, and it amazes me that the policy makers think this will go differently.
Scott Jacobs (90ff96) — 6/2/2009 @ 9:31 pmI realize we are headed into a disasterous stagflation scenario that will make the Carter-Ford era look beign. But where can you invest or protect yourself against a government that is destroying the market?
I have assets in Costa Rica and I guess I can escape before dissaster is total but how long before the US economy acts as a black hole sucking other economies along with it into a depression of unusual length?
Thomas Jackson (8ffd46) — 6/2/2009 @ 10:22 pmBut where can you invest or protect yourself against a government that is destroying the market?
Never too late to get educated. I suggest starting with the commentaries freely accessible at Kitco.com and the Daily Reckoning. Very wide spectrum. Just look for whatever resonates with your own logic.
allan (7fc978) — 6/2/2009 @ 11:17 pmWhich thread had that revelation?
See posts #81 and #82 under O’Reilly Refuses to Back Down on Tiller header, Bradley.
Dmac (1ddf7e) — 6/3/2009 @ 7:14 amThis is what happens to a country with a Treasury Secretary who doesn’t know how to us TurboTax.
furious (a74982) — 6/3/2009 @ 9:57 am“Indeed, the conceit that statist bureaucracies of experts, left to their own devices, can steer the US economy to that third bowl of porridge that is neither too hot nor too cold, but just right, has been a tenet of progressivism since its inception.”
And that’s how China became the behemoth it is. And India as well.
Not that I defend Geithner and the Banksters. The power elite serve their own interests. But you defend them when they’re pitching to republicans.
And this is good for a laugh:
bored again christian (833efb) — 6/3/2009 @ 11:24 amhttp://blog.niemanwatchdog.org/?p=1069
Democrats have star power again, and star power is as still as silly as always.
#62. Yeah, that and ~4B people. China faces a demographic hairball (30M more young men than women) that has yet to digest.
Didn’t work for Russia, unless you’re counting loose nukes and alcoholics. Nor did it work for France’s structurally unemployed and unassimilated urban Muslims, unless you’re counting torched cars. Nor did it work for Japan, unless you’re counting non-performing loans.
furious (a74982) — 6/3/2009 @ 12:14 pmNow is the time to open money market accounts. In the 80s they were paying 18%. Of course, this assumes the guvmint will not actually confiscate your accounts. They didn’t in the 80s, so it’s a guess they won’t now…or, a hope.
Patricia (2183bb) — 6/3/2009 @ 3:51 pmAll countries, China and the USA have their dark side. China’s is Tianamen Square, USA’s has been the last 8 years of the Bush administration. Both cases involve blatant and forceful dismissal of he rule of law. Life for life, in China’s case it was hundreds of lives, in the USA’s it is over 4000 and counting. Are they communists? They are changing as we speak. Change has come over the USA too. Nations need to examine their evil side before any progress away from evil can be accomplished. We, at the USA are no different.
PJ (9d370e) — 6/4/2009 @ 4:25 am…”and I am EDUMACATED!”
Dmac (1ddf7e) — 6/4/2009 @ 7:17 am