FedUpUSA

Go back and read my missive of March 12th if you don’t recall it.  Especially if you’re a Libertarian.

Then consider the various articles I’ve written over the last five years (yes, it’s really been that long!) about how the path evolved both in the 1930s with The Depression and in Japan.

Remember that after the 1929 Stock Market Crash there was a hell of a rebound rally and everything “seemed” ok.  It wasn’t.

Remember that after the Nikkei cracked there was a hell of a rebound rally and everything seemed ok. It wasn’t, and still isn’t 20 years later.

Remember that many people believed that Bernanke saved us and everything is recovering this time….. except that it isn’t.  Employment hasn’t recovered, the labor participation rate hasn’t moved upward, median household income is flat but 30% of your purchasing power has been destroyed by monetary and fiscal policy.  The engine that was being counted on to make “it all ok” was more and more credit going into the economy but there is sand in the engine as without jobs, along with capacity and willingness to borrow this model cannot succeed.

After 1929 what blew up the world was Creditanstalt.

In 2010 I said “Beware the Eurozone.”  I was called a lunatic.

How much of a lunatic do I appear to be now?

In the summer of 2010 I wrote:

There are a handful of us in the alternative media who have been behind the truth since the beginning of this mess in 2007.  The Ticker and FedUpUSA stand as two such organizations and media outlets, but we are not alone.

Since this mess began my message has been consistent and unwavering: Those who committed the frauds and excesses that led us to this precipice cannot be successfully propped up, we cannot exit this mess with more credit or “money printing” in any sort of form, and that only restoring credit balance will work – and whether that’s painful isn’t material to whether we must do it.

We’ve done exactly none of the right things and all of the wrong ones.  But the fact remains as it was in 2010 — and 2007:

Those who have been responsible for the path taken thus far, which has turned a 15-20% contraction in GDP that had to be taken in 2007 into a likely 40% one, must be held to account for their outrageous acts of wanton and intentional destruction.

I wrote at the start of the year that I expected the detonation would come out of Europe, simply because they’re the place that has the most exposure and we’ve spent all of our powder but we enacted no real banking and credit reforms, and in Europe they literally did nothing in that regard.

In February of 2010 I wrote this:

We need solid, real financial reform.  We must renounce “bubble-nomincs.”  We must shut down the fraud-laced “securitization” machine permanently, prosecute those who have unlawfully concealed risks and lied about asset quality and return our economy to stable, productive output instead of financial speculation.

The Banksters all claim that if we were to do this that society would collapse and that our economy could not survive.

They’re wrong, just as Henry Paulson was wrong when he said he had “no choice” when, allegedly (according to his book) the Chinese and Russians threatened to collapse Fannie and Freddie.

Hank had a choice, assuming he’s not lying of course.  He could have told the Russians and Chinese to bite him – on national television, with George Bush at his side.  He could have told them that if they tried it that the United States Treasury would, by executive order, declare their Treasury Holdings worthless.

Yes, that would have stopped the “gravy train” of being able to spend more than we make in the government.  Yes, this would have forced immediate austerity and facing of the truth.

Is that bad?

What have we done since?  Added what – $2 trillion+ to the national debt – more debt we don’t have and can’t pay?  Emitted another budget proposal, just today, to add $1.6 trillion more?  Built yet another artifice – another fraud – on top of the previous ones?  Written more “Option ARMs” on our children and grandchildren’s backs to prop up a cabal of banksters on Wall Street who then fawn all over The Senate with their “campaign contributions” so they can keep skimming off huge parts of our economic structure for a few thousand residing on Wall Street?

How’s that going to work out folks?

How will we settle up and ultimately pay this debt load down?

We won’t, of course.  Neither will anyone else.  Greece, Spain, the UK – all are lessons for us, if we choose to learn them before we get to live them.

Watch those nations.  If you think this is just about Greece you’re nuts.  The public employee pensions there are ridiculous.  Guess what – they’re ridiculous here too.  In the closest “little city” to here there are many retired police officers and firemen who have pensions north of $100,000/year.  There are many places where six-figure pensions are considered “normal” or “reasonable” – for public safety workers and teachers.  We don’t have the money, we can’t afford to gold-plate the steering wheels of the cop cars and despite all the bleating the fact remains that the primary function of the police department is to write traffic tickets and take a report after you are burglarized, raped or robbed.

Are these functions important?  Yes.  Do they call for better than a middle-class wage?  Nope.  Is a middle-class wage $100,000 a year?  Nope.  The 2008 Median Household income for California is $61,021.  For Florida, $47,778.  For New York, $56,033.

So why are we paying out pensions of double that to what should be middle-class employees in retirement?

Let’s face the facts folks – we can either stop the plundering across society – by both banksters and public employees – or we will face a crisis similar to what Greece is dealing with now.

It will be more pleasant for us to take our medicine voluntarily rather than having it forced down our gullet, but doing so starts with chaining the banksters and their penchant for offloading risk to others and, for those who refuse, jailing them outright, lest the public get ahold of them and not bother with the pleasantries (and constitutional right) of a trial by jury before handing up a sentence.

At the same time we must fix the public employee entitlement mentality, by firing them and replacing them with unemployed Americans if necessary.  We have 1 in 5 working-age men between 25 and 54 out of work - there is no shortage of available people to take these jobs.

It is time to pay the check folks, before we are literally forced to eat it.

And we’ve done none of this.

The European economy is in the toilet and China is rolling over.  So is the United States.

We used our powder and ball; it’s gone.  The common man’s purchasing power “per dollar” has beentrashed to the tune of nearly 30% over the last four years yet the median household income has not moved upward. That’s effectively the same as a monstrous tax increase in real terms and it occurred as a direct result of both fiscal and monetary policy decisions made by the government.

Our “Creditanstalt” moment is here and now; if and when Spain gets locked out of the debt markets with 20+% unemployment they’re finished.  Greece’s people are going to elect a no-austerity government in roughly two weeks and should, since essentially none of the “aid” they have received has gone to them – it has all gone to the banksters who lent them money knowing they couldn’t pay in the first place.  There’s no reason why the Greek people should pay through austerity for something that brings them no benefit and simply makes good the bad bets of those financiers who screwed them, in many cases through active conspiracy in fraudulent swaps and similar deals intended to hide their budgetary problems.  If the Greek government subverts this election the people are within their rights to revolt.

Everyone wants a Unicorn.  We all want some sort of magical elixir that allows us to maintain our spendthrift ways, to have our “entitlements” even though there’s no money to pay for them and to continue to run trillion dollar+ budget deficits and 13,000 DOW points.

If you haven’t noticed the DOW is down more than 700 points in the last month and the S&P 500 is off 140 — or more than 10% — from its recent high, basically straight down while at the same time the 10 year Treasury is now yielding 1.58% which is negative in real terms against price.

This may lead some to conclude that the government can borrow “free” since price inflation is higher than that rate, and therefore it should (and spend the money.)  This is false.  Capital is being hoarded and will continue to be hoarded — unfortunately what’s being destroyed is all the “fake capital” that is in fact credit attached to a debt which cannot be paid.

If we keep deficit spending we are simply debasing the purchasing power of the common man in a puerile attempt to pacify the people and avoid holding the financiers who were responsible for this debacle, including Bernanke, Greenspan, Paulson and Geithner along with both Obama and George W Bush to account.  This attempt is mathematically doomed to fail as median family income has not moved which means that we’re shifting an ever-greater part of the population to social programs like food stamps and other handouts while the taxpaying productive population continues to shrink. 

This is exactly how Greece and Spain went down the bowl and we’re right behind them unless we stop this crap right now.

We cannot “bend the curve” or look toward the “intermediate term”; that was exactly the siren song in Europe and it has led to catastrophe as “tomorrow” never comes!  The “intermediate term” is usually defined as three to five years out — we heard of the “intermediate term” in 2008 but now it’s 2012 and none of the retractions in that spending have occurred — the claim that they would be undertaken was a lie.

We must stop the stupid right now!

Arithmetic is a bitch.  It’s politically agnostic and cold-hearted.  Exponential growth, as I have repeatedly pointed out, is utterly unsustainable over the long term.  It doesn’t matter if you want these sorts of schemes to work or not; the longer you continue to pretend that there is some path forward that achieves these goals the worse the outcome is when you discover that you’re wrong.

Yesterday it was reported that total medical expenditures are expected to expand by nearly 8% this year.  Historical rates from 1980 to 2011 have run 9.3% or thereabouts.  That 8% “guess” is almost-certainly too low but even if it’s correct it doesn’t matter – we cannot allow this to continue for even one more year as even at 8% it’s over $65 billion in additional spending at the federal government level alone and we don’t have the money!

For five years I’ve warned that we have a limited amount of time to deal with these issues.  I’ve attempted to steer not only the major parties (Democrat and Republican) toward the arithmetic and facts, as anyone who passed middle-school math can easily discern the outcome that we will inevitably face if we do not change course, and more-recently I have done my level damndest best to get the Libertarians to listen, including running for and being elected to state and county party office.

But while at a county level this has definitely sunk in and the party here “gets it”, along with the candidate that we’re running for Congress here in the 1st District, on a State and national level the party has utterly refused to make this issue — and resolving it — the centerpiece of its political activity.

In that the Libertarians at a State and National level have joined the Democrats and Republicans in searching for Unicorns and praying for more pretty colored candies out of that Unicorn’s ass — by burying their heads up to their necks.

I will simply note, once again, that there is no such thing as a Unicorn — that is a mythical creature — and what’s coming from its ass are not candies.

Bon appetit mes amis.