Peter St Onge, Ph.D Last Thursday saw a near-failure of a Treasury auction. Which is the global reserve asset, the biggest block in the jenga tower in our Ponzi financial system. Why? Because the debt sales are too big, and foreigners aren’t buying anymore. The Fed typically hikes until something breaks. They’ve done the hikes. Now come the breaks.
Interest isn’t keeping up with inflation and inflation is also being understated. Interest is going up because we are pretty sure spending isn’t going down.
I remember the late 1970’s.
12% Mortgage Rates
21% New Car Loans
And the unsustainable deficits were measured in Billions, not Trillions of dollars.
I don’t think that is going to happen. “Then Suddenly” will be the housing market, several banks, personal bankruptcies, collapse of consumer spending, collapse of commercial real estate, stock market tumble, drop in the price of gold, etc. Rates will be dropped rapidly (not to zero of course) but the damage has been built into the system. So the suddenly isn’t that far off. Should be a great ride.
The late father of PM .we were just married and tried to borrow $$ to build a new house in a small farming community in Manitoba. The banker told us if we had enough friends and relatives put that amount in the bank, absolutely we could have the money to build our house!
Remember what happened to French King Louis XVI when he was no longer able to borrow money to keep the French economy and his lavish life style going.
My prediction is China and the USA save each other.
A century ago, “As rich as an Argentine,” was a common phrase. Argentina was a booming capitalist country with lots of natural resources and plentiful beef and other agricultural products. Then Socialism and vote buying hit Argentina. How many times have the Argentinians defaulted on their debt in the last 40 years? Five? Eight? And they continue to vote in the same Socialists.
In the 1970’s, Venezuela had a booming economy and a bright future with massive and rising oil revenues, and lots of agricultural products. Then Socialism and vote buying destroyed the economy. The government put their uneducated, but politically reliable toadies in the oil industry, and oil production plummeted. Venezuelans are now very slim, because they cannot afford enough food. How many Venezuelans have fled Venezuela? Yet the Socialists remain in power, and are now as despotic as Cuba.
What will they say about the United States and Canada Fifty Years from now?
Will anyone be around to say anything?
Hey rd…..now the Venezuelan “refugees in shitcago want to go back home because shitcago is not as they hoped!
More like “the shining city” in a sewer lagoon!
Funny … Roger Hodgson understood that all back in the 1970’s (another era of economic ponzi)
Could we have kippers for breakfast
Mummy dear, Mummy dear?
They got to have ’em in Texas
‘Cause everyone’s a millionaire
I’m a winner, I’m a sinner
Do you want my autograph?
I’m a loser, what a joker
I’m playing my jokes upon you
While there’s nothing better to do
Yeah!
Yeah … our borders are being crashed by the fools who believe that in America … everyone’s a millionaire. Best change that line to Billionaire … cause a million ain’t what it used to be … by a far shot.
Our brave and dynamic PM would probably declare that retirement savings and investment accounts must be re-allocated to serve the national interest of funding more government debt. Suddenly your holdings in Crescent Point or Wheaton Precious Metals get magically converted to long-term government bonds paying 5%. Tough luck, sucker.
Holdings in Quebec securities will be exempt, unexpectedly.
Soon Your Money Won’t Be Money, and It Won’t Be Yours.
Heh, nice one…I see a book title, or at least a recurrent blog post header, in there ;o)
Is this that time that Thatcher referred to as when they run out of other people’s money?
I know that no one is joking, and we are entering the terrifying end game, but this is not funny anymore and I don’t want to sit back and eat popcorn while it all collapses. All I have built, and all my lineage have worked for the centuries will be gone in a brief period of destruction. Will we be allowed to build it back or will we be stuck in an endless cycle of communism? Where do we go if we can’t save this? Where do our children go? I am not encouraged, nor do I see a positive aspect.
Kill the communists and you won’t be stuck in the cycle.
I just saw on the news that the US government is facing a shutdown without an appropriations bill. Would anyone notice if the government shut down?
That would save some money and chip away at the deficit. Oh, I suppose those receiving Social Security would complain and quite a few pensioners would be hit very hard. So maybe keep a few people around to audit the rolls and make sure there’s no fraud and a few to hit the button to start the computer printing the checks.
Perhaps the US government could lay off 80% of all of its employees and impose a 50% cut in the salaries of the remaining supervisory and management corps. Of course, our elected and appointed “public servants” should pitch in and forego their salaries altogether.
Oh… and the regulatory agencies could be given a ten or twelve-year break. I think they have enough rules on the books to go at least that long without creating any new regulations.
(Okay. Don’t nobody wake me up. This pipe dream is starting to get really good.)