FedUpUSA

More Tickerguy Affirmation: Hoenig And…. Congress?!

 

What do we have here?

“We can’t rely on monetary policy. We can’t solve the international imbalances with monetary policy, but people don’t know that yet,” warned Hoenig, who oversees banks in Colorado, which is part of the Fed’s 10th District based in Kansas City, Mo.

The core problem is that the United States has consumed more than it has produced for 20 years running. Consumers and governments in the developed world have piled on too much debt.

Uh, 30 years running.  Remember this chart?

Hoenig goes on to admit that The Fed built the asset bubbles with inappropriately-low interest rates!  That is, he makes one of my central points: It must always cost money in real terms to borrow.

What’s even better is what I’m hearing today in the Bernanke testimony on The Hill.  For the very first time I heard a Representative state clearly that Bernanke’s rate policy is enabling the drug binge of deficit spending in Congress!

Now, Congress, take the next step.  Come to the understanding that we must pay for each and every program we want to have with current tax revenues.

Yes, there will be market consequences from removing the stupidity of past acts.  But that’s unavoidable, just as you cannot avoid the fact that once you smoke crank for months or years your teeth have already rotted and will not grow back!

We still can stop further deterioration in our choppers, and we must – even if we go through a nasty round of withdrawal.

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