What if we held an auction and no one came?
posted at 9:26 am on May 8, 2009 by Ed Morrissey
Great Britain knows how that feels, and now so does Barack Obama. Treasury had to offer higher-than-expected prices to investors to get them to buy government debt, signaling a distrust of American economic policy and financial strength. That will have significant consequences for Obama’s deficit spending policies (via Instapundit):
Weak demand at a Treasury bond auction touched off worries in the stock market Thursday about the government’s ability to raise funds to fight the recession.
The government had to pay greater interest than expected in a sale of 30-year Treasurys. That is worrisome to traders because it could signal that it will become harder for Washington to finance its ambitious economic recovery plans. The higher interest rates also could push up costs for borrowing in areas like mortgages.
Investors also pocketed some gains after strong rally in stocks this week and ahead of the government’s April employment report on Friday. Investors were jittery ahead of the formal release of results from the government’s “stress tests” of bank balance sheets, which came out later Thursday.
Major stocks market indicators slid more than 1 percent, including the Dow Jones industrial average which lost 102 points after gaining nearly the same amount Wednesday.
Once again, this shows exactly how speculative the White House and the CBO have been in calculating deficits for the next decade based on Obama’s spending plans. Let’s take another look at the deficit projections from OMB and CBO:
Both sets of numbers depended on a certain level of economic growth, which so far hasn’t begun despite Obama’s predictions of rebound in Q1 from the application of the stimulus. It also depended on a constant supply of debt purchase at steady bond rates. These projections had to consider interest payments on all of the debt Obama planned to buy while running these deficits, and any hike in interest rates means that those interest payments will have to go up. That also means that we will have to spend more money than Obama projected, creating even higher deficits and the need for even more bond sales — and more interest payments on those.
It’s basically a Ponzi scheme, and it’s accelerating.
One of two things will have to occur to resolve the situation. Either the federal government will have to massively cut its spending in order to service all that debt at the higher interest rates now demanded, or it will have to pass massive new taxes in order to generate enough revenue to accomplish it. Which do you think Obama is likely to try?
Blowback
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They will just enact the death penalty for tax evasion while not being a democrat.
Right_of_Attila on May 8, 2009 at 10:41 AM
From what I have been hearing the Economy is on the rebound. I didn’t even hear about China canceling our credit cards. Maybe that was what the swine flu was covering up. If the 0bama says we are in a recovery period you all must be wrong. /sarc
Brat4life on May 8, 2009 at 10:41 AM
Not knowing anything about economics, but I figured printing money and inflation was inevitable and imminent. If a boxing manager sells 300% of his fighter, and the fighter is worth $100,000, then a share isn’t worth $1,000 anymore, it’s worth $333. The value of what you hold degrades. That’s inflation, where money buys less. Then what happens to savings, and interest rates. And especially, the state of our currency compared to the Euro, the yen, even the Canadian dollar. Wouldn’t its worth go down and down?
Paul-Cincy on May 8, 2009 at 10:42 AM
Captain Ed wrote (and asked):
Obviously, we already know the answer to that question. Based on where we expect the national debt to be by the end of this year, the maximum income tax rate will likely need to be raised to somewhere around 68-70%. [You'll need to replace the default national debt data with 12.750 trillion in the tool linked above.]
There are two reasons why this will need to happen:
1. Those institutions lending money to the government will keep forcing the government to increase the interest rates it offers unless the government reduces its risk of default by increasing its revenue. The only way that happens when there is no serious plan to cut spending is with tax increases. Large ones.
2. Obama and the Democratic Congress will need to increase tax rates on the middle class (those earning between $30,000 and $154,000), since this is where most of the earned household income is in the U.S. To get at that income, they won’t need to raise the applicable tax rates as high for these income earning households, but the higher the maximum tax rate goes, the more tax revenue the government will be able to collect from the middle class.
If they don’t raise income tax rates to that level, they’ll likely increase or impose other taxes aimed directly at households to get the tax collections they need, say through imposed cap-and-trade costs on energy usage, extracting revenue from business that will be passed along to consumers.
ironman on May 8, 2009 at 10:44 AM
I describe the perfect solution for O admin, the congress and the useful idiots in the MSM in two words.
Soylent Green.
The peasants are starving? let them eat…. oops!
MaaddMaaxx on May 8, 2009 at 10:48 AM
Why isn’t this scaring people?
ORconservative on May 8, 2009 at 10:48 AM
Wow thats’ some scary stuff right there.
Time for pitchforks and torches yet?
dhunter on May 8, 2009 at 10:48 AM
Or a third possibility: Print enough money to cover the deficits, and create the Weimar Republic of America. Better go out and pump up the tire on my wheelbarrow.
Steve Z on May 8, 2009 at 10:50 AM
Most people don’t understand the matter themselves, and the M$M is running interference and not reporting in context….
as another poster pointed out…Bush loses a half million jobs DOOOOM!
Ogabe loses half a million jobs, “there is a light at the end of the tunnel”….
Great Depression 2.0 is gonna be a blast I suspect the country will split.
sven10077 on May 8, 2009 at 10:50 AM
So, if I understand this correctly, we are seeing the start of an interest rate cycle that feeds upon itself.
1. More spending, less confidence in bond market, higher rates demanded on Treasuries
2. Higher taxes, kills any economic growth, less confidence in bond market, higher rates demanded on Treasuries
3. Fed printing more money, QE, to pay for higher interest on debt and more spending, more inflation, less confidence in bond market, higher rates demanded on Treasuries.
4. Endgame?
—O’Bama will not quit spending
—Treasury tax revenues plummet due to economy
—Fed begins to ‘reluctantly’ raise rates to counter inflation and pull money out of the system? O’Bama and Geithner turn on Fed
None of this is good?
Starlink on May 8, 2009 at 10:52 AM
It’ll get better gas mileage that way….
sven10077 on May 8, 2009 at 10:53 AM
Progressive tax rates are about the dumbest thing to do, as far as economics go. At the low end, the higher you tax, the harder the poor work, because they don’t have a choice. At the high end, the higher you tax, the less the rich report and/or make.
Increasing the highest tax rate or the capitol gains tax will only reduce tax revenue, as well as depress the economy (as happened in the ’30s).
Count to 10 on May 8, 2009 at 10:53 AM
Over a page of comments, and not one troll has dared show there face on this thread.
They’re all over on the threads about Miss California telling us how horrible she is.
Maybe the math here (or the economic reality) is over their heads.
UltimateBob on May 8, 2009 at 10:55 AM
Because they don’t know. If the story does break through the media, it’ll have a nice spinny narrative about the greedy Chinese or some such thing. There will be a bad guy, but it won’t be Obama. If, by some chance, it breaks through and becomes a story, Obama will give a soaring speech on greed and how it’s keeping him from creating the People’s Paradise. He’ll pound his fist on the lectern and say he’s going to bring the greedy money-lenders along with his hope and change if he has to put every one of them in prison to do it. And, sadly, it’ll probably work. The “folks” will like the spin. For awhile. Then he’ll speak and pound again. The media will go into full “save Obama” mode. And it’ll work again. For awhile. Then it starts all over.
Rational Thought on May 8, 2009 at 10:55 AM
flyfisher,
From your link on QE:
It will be tough to stop what’s been done in the last 7 months.
BadgerHawk on May 8, 2009 at 10:56 AM
Just following your lead.
We also have this to look forward to (history repeating itself):
Democrats Setting Up Another Sub-Prime Mortgage Bust
May 4, 2009 |
http://www.foundingbloggers.com/wordpress/2009/05/democrats-setting-up-another-sub-prime-mortgage-bust/
Bang head against the wall right Here ( O )..
Baxter Greene on May 8, 2009 at 10:58 AM
4. Endgame?
– the dollar no longer reserve currency. Soros is already planning for it.
rockhead on May 8, 2009 at 10:59 AM
Look up the word Kulak and you’ll get the punchline….the government will eat the rich about 7% at a time and the peasants will cheer right up until the “rich peasants” get their turn at the Gulag but by then it’ll be too late.
sven10077 on May 8, 2009 at 11:01 AM
Soros will be the world’s first trillionaire, not bad for an investment of half a mill or so…
sven10077 on May 8, 2009 at 11:02 AM
Half a billion that was…
anyway gas is gonna climb again and Ogabe will do one of three things,
1) ration it
2) price control
3) nationalize the oil biz….
all of those will wreck US energy
sven10077 on May 8, 2009 at 11:04 AM
Logically, if you take emotion out of the equation, this is why we need Mitt Romney. Romney is smart enough and experienced enough on his own to spot a con, or a program that just won’t work economically. I don’t think a Soros groupie could smoke him.
Obama doesn’t know s#!T from shoe polish.
eaglesdontflock on May 8, 2009 at 11:05 AM
Probably the most misunderstood institution in America. Friedman is just one example, and their unaccountability is another. No transparency — none.
Interesting issue —
1. If interest rates start to climb at auction, will the Fed be forced to raise rates due to spread or go all in and print like crazy?
2. How long before O’Bama and crew turn on Fed?
3. How long before the markets figure this out?
Starlink on May 8, 2009 at 11:07 AM
I don’t think we can stop what’s been done. We’re screwed. But I don’t necessarily agree that inflation will be the end result. It may be, but with the looming commercial real estate bust, continued unemployment losses, continued declines in residential real estate, Obama chasing companies offshore through higher taxes, I just don’t see how the inflation gets going right now. They WANT inflation and can’t get it. Krugman and his Kenyesian stooges want even more spending and other farsical nonsense. Helicopter Ben said in his famous speech a few years ago that deflation was easy to combat. He’s learning the hard way how wrong he was.
flyfisher on May 8, 2009 at 11:09 AM
I watched the you tube posted on the Fed Reserve. Funny that no one is the least concerned about trillions of dollars.
ORconservative on May 8, 2009 at 11:11 AM
I also find myself daydreaming about Romney is the WH these days. Too bad they went with the guy that was more electable. Not that the 52% wouldn’t have seen past the smoke and mirrors candidate though. But don’t you worry now America is just one big community that needs some organizing and we have just the man to do it.
rockhead on May 8, 2009 at 11:12 AM
Look up the word Kulak and you’ll get the punchline….the government will eat the rich about 7% at a time and the peasants will cheer right up until the “rich peasants” get their turn at the Gulag but by then it’ll be too late.
sven10077 on May 8, 2009 at 11:01 AM
Yup. Though I’m more optimistic. If this is the direction things stay in, Obama will get his reckoning in 2012 because then he’ll have a record — rather than rhetoric — to run on. I think about the 2012 debates sometimes, and a tingle runs up my leg. He’s going to be umming and ahhhing like there’s no tomorrow as he tries to defend his actual record for the first time in his political life, and it’s shaping up to be a pretty inconvenient record for the prez.
Rational Thought on May 8, 2009 at 11:12 AM
The Canadian dollar might be a good place to keep money if you believe the recent auction is a sign of trouble ahead.
Some things I think about:
1.) Treasury prices have been very high over the past year since they carried an “end of the world” premium.
2.) The equity market is up 37% in the past 10 weeks. Money is rotating out of fixed income into equity.
3.) Inflation is a real concern. Why buy a 10 year bond that pays 3.2% if you believe inflation will be 4% or higher during that period?
dedalus on May 8, 2009 at 11:12 AM
Depending on who you believe, Rothschilds have been for quite some time. Grayson and Bloomberg get no disclosure from Fed for trillions as well as off-book loans to ??
Starlink on May 8, 2009 at 11:13 AM
Others may disagree with me, but I think the professionals on Wall Street know this. Right now Wall Street is trading on the news, not economic realities. There is so much uncertainty that I believe people are crazy to look at our markets in terms of “investing.” Short term profits can be made trading the swings, or momentum, but in my opinion buy and hold has become folly. How can an investor have any certainty government won’t kill his investments?
Go long pitchforks and torches (and ammunition if you are so inclined).
flyfisher on May 8, 2009 at 11:14 AM
Since BHO seems to hold Juan Peron as an idol, why not use a revenue source pioneered by Argentina? Nationalize 401(k)s.
swiaGunToter on May 8, 2009 at 11:17 AM
I think even the mind numbed moonbat would have issues with that…
sven10077 on May 8, 2009 at 11:19 AM
As I understand it, there’s a third possibility that’s even more likely: the government can merely put the printing presses into overdrive, print trillions of dollars to pay its bills, and debase the currency to banana republic levels.
joe_doufu on May 8, 2009 at 11:20 AM
Speaking of inflation, I took the family out for fast food last night. Total bill $45, for the 6 of us. It used to be it would come to about $30. We won’t be going out to eat again real soon.
This scenario that is being played out in a million different ways all over the place right now. It will only get worse if Bambi gets his cap-n-tax scheme passed. We are in for some tough times. But don’t worry the press will provide all the info you need to know to make it through.
rockhead on May 8, 2009 at 11:20 AM
I agree that Wall Street knows enough about the bond market that there is concern.
So, assuming the market pros are selling the admin spin, how long until we reach a tipping point?
If the market, despite spin, looks out 6-9 months, how many mediocre auctions will it take before the bond market starts to scream?
Wouldn’t any prudent investor be concerned about interest rate / tax increase regarding financing the budget and impact on the economy 6-9 months out?
How can O’Bama and crew hold off on tax / interest rate policy until after Nov. 3rd, 2010?
Starlink on May 8, 2009 at 11:22 AM
and now in closing…ignore the rumbling in your belly….and learn to love the suet sandwich…
sven10077 on May 8, 2009 at 11:23 AM
Why doesn’t this scare people? The short answer is because people are really, really stupid.
We didn’t get this way overnight, or even since November last year. It’s been building for decades, but has been merely cloaked by events and inertia. Look at how many people run up huge credit card debt, apparently thinking it need not be repaid. Do they really think that? Looks like it.
But when it comes to gubmint, the stupidity squares. For a long time now, about half this country thinks that conservatives are just greedy misers… because they (used to, anyway) pinch public pennies. If your mindset (the 52%) believes that government has endless piles of cash, and there is always someone else to pay for things, then you expect the government to spend it. Why not? Just holding on to it won’t do any good.
I swear that is the simple-minded, blockheaded attitude many have had about gubmint, for many years. Now that we have a resurrected Peron to spend like a drunken community organizer, to these folks things finally are set right.
George Orwell on May 8, 2009 at 11:23 AM
The massive budget deficits, higher taxes and ridiculous inflation we’re going to be seeing in the next couple of years will seriously constrain any economic recovery we’re going to see. And, Obama will own all of that, since he’s the one who did it to us.
eyedoc on May 8, 2009 at 11:24 AM
True, but never underestimate a Democrat’s desire to pick your pocket.
rockhead on May 8, 2009 at 11:25 AM
A sizeable minority are completely in the tank for Obama. I mean, cult-of-personality, “Dear Leader”, god-like adoration, where they give him total control. Carte Blanche. They would follow him into Hell.
Paul-Cincy on May 8, 2009 at 11:26 AM
Buying the index-managed ETFs seems quite risky, but I’m optimistic that there are a few companies that will do well, either despite or because of these present adverse circumstances. Figuring out which ones those are is a difficult problem for me, but one that I sometimes enjoy working on.
Of course, perhaps the best new businesses in our time will remain private, because of the burdens of obedience to Sarbanes-Oxley and the related regulations.
Kralizec on May 8, 2009 at 11:27 AM
You are correct – those with the highest incomes and accumulated wealth have the greatest ability to either wait out tax hikes or to shelter what they have from taxation. That’s why Obama & Co. will “aim” at these individuals in their public statements and tax proposals, but make no mistake, the real target is the middle class.
On your second point, the historic data indicates that no matter what, the government will only be able to sustainably collect the equivalent of 7.2% to 8.8% of GDP in personal income taxes in any given year, regardless of where tax rates are set. They’re simply not going to get what they want without imposing a lot of unnecessary pain on U.S. taxpayers.
ironman on May 8, 2009 at 11:27 AM
I still wonder about this. I’m not sure how long the “I inherited this mess” spin will stay fresh.
I’m sure not counting on the MSM to call him out. I can see them forever tying themselves in knots equivocating for him.
rockhead on May 8, 2009 at 11:30 AM
Despite all of Rommney’s wishy washiness on some issues, I would really appreciate a solid economic mind in office right now. I really hope the GOP is able to nominate someone in 2012 who ‘gets’ the economy and not necessarily a populist social warrior.
BadgerHawk on May 8, 2009 at 11:31 AM
Don’t worry folks, His Hooves, the Unicorn God is getting even higher approval ratings from Rasmussen. Bend your knee and worship.
signed,
Cloward and Piven
George Orwell on May 8, 2009 at 11:31 AM
Looks like the mob boss will have to get his knee-breakers back on the job.
Like he did with Chrysler, and now he’s doing with California.
notagool on May 8, 2009 at 11:39 AM
Overheard one of the idiot masses at the next table the other day just Lovin it that Obama is putting the screws to big business, big auto, wall street.
I told the idiot he was a fool and that soon no-one will have jobs as big business will flock to other countries and he will be left wondering what happened to the American dream.
The ignorant masses love and adore The Pinnochio Presidente!
dhunter on May 8, 2009 at 11:40 AM
Option 3: Hyperinflation. Obama already printed out a cool trillion in fake money. What kind of idiot would believe that he’s not going to do that again? That’s why no one but the biggest suckers are buying 30-year bonds at ANY price.
Look at all the benefits from Obama’s point of view:
1) All the real estate Obama owns doubles in value every few months – and he doesn’t have to evict anybody ’cause they can all either refinance, or just go ahead and pay their mortgages out of petty cash.
2) He can keep his promise to only gouge taxpayers who earn more than $250,000 a year. By 2011, that will be the minimum wage.
3) With the new “loan money to ourselves” program, he can siphon an infinite amount of dollars out of the economy DIRECTLY into the federal government – with no need for taxes at all. Only the “fringe” elements of the media will ever even suggest that inflation is caused by anyone other than the evil greedy companies who keep charging more.
This is why Obama’s having a fire sale on long-term bonds now. By this time next year those things will literally not be worth the paper they’re written on.
logis on May 8, 2009 at 11:50 AM
There’s a third option. Get involved with your local Tea Party movement and find/run viable 3rd party candidates.
I attented our local tea party meeting a couple of weeks ago. Check out the “Get Out Of Our House” movement.
http://goooh.com/
SoldiersMom on May 8, 2009 at 12:01 PM
dhunter;
You and many others have the right result in mind. The Mexicans and Cubans are going to start going backwards some day soon.
Our culture will suffer untold damage; Where are we going to get Mexican food, black beans and rice, waltzing Mariachi bands; We’ll be pressing “1″ for another language, and there won’t be any! Mexifornia will get overgrown for lack of gardeners, and they’ll also have extra money because they won’t have to print all notices in 16 different languages!
The only wedding gown colors available will be “olive drab” or “camo”.
Cybergeezer on May 8, 2009 at 12:02 PM
Good questions all. I’m wondering those same things. I personally believe we are approaching the tipping point, but who knows what they’ll come up with to keep kicking the can, which is all we’ve been doing since the internet bubble burst. I am amazed the amount of willful blindness by those in power and on Wall Street.
I read yesterday that so much government debt is on short term financing that if rates tick up 1 point it will add more than $100 billion a year in interest cost. When Ronald Reagan took office the total federal budget was roughly $500 billion and now we’re looking at $100 billion in ADDITIONAL debt interest. This is completely unsustainable.
Another thing, if rates begin to climb, what’s that going to do to any real estate recovery? I don’t think we’re anywhere near the bottom.
flyfisher on May 8, 2009 at 12:21 PM
***
About 30 years ago the Mexican peso was trading for about 12 pesos to the U.S. dollar. The Mexican government decided to issue a NEW PESO currency where 1 peso was equal to 1 dollar. This was done to improve their economy.
***
The “new peso” now trades at the old rate–about 12 pesos to the dollar. Any Mexican business, bank, or lender lost their A**es as the inflation ate up their loan values–it went down to about 8 percent in terms of real value.
***
Many Mexican people and businesses shut down operations in Mexico and moved all their assets to U.S. banks. A co-worker had a daughter who worked in an El Paso bank–the Mexican deposits went up by a factor of 20 or 30 times normal for years.
***
The U.S.A. citizens may start putting everything in gold or silver to preserve the value of their money–this may be the only safe “investment” in the future. I expect the new U.S.S.A. to outlaw private citizens holding gold in the future–like President Franklin Roosevelt did in the 1930′s.
Deja Vu all over again!
***
John Bibb
***
rocketman on May 8, 2009 at 12:22 PM
ETF’s…not for me, not now. Sarbanes-Oxley is a huge pooch screw. What a waste of time and resources.
On your point about some companies doing well, I agree with that. My wife is the controller of a multi-billion dollar facility for a publicly traded Fortune 500 company, so I know quite a lot about their internal projections. And right now things look good. They are holding the line on spending and being cautious, but they are making money. Her facility is growing and has recently attracted some new major accounts. That said, some of their accounts (major names) have slashed orders to an alarmingly low level and her conversations with her counterparts at those companies are forboding at best. I am betting some of the old guard don’t survive.
My wife’s company is very fearful of card check, as well as any attempts to raise corporate taxes. If either happen, their remaining US operations may be shoved completely offshore. Unemployment will shoot the moon.
flyfisher on May 8, 2009 at 12:31 PM
It also does several things which are designed to keep the incumbents in power:
1. Hides the true cost of government from the majority by putting most of the burden on the minority;
2. Effectively bribes the majority into maintaining the status quo (no politician is going to get elected by promising to make the poor pay their fair share);
3. Keeps government expenditures high by fleecing the minority in order to shift the burden away from the majority.
Responsible government will only come when everyone is forced to pay the same percentage. As it stands right now, we have representation without taxation, and most voters have no financial stake in their government.
TheMightyMonarch on May 8, 2009 at 12:46 PM
Oh, crap. We’re really, really screwed.
Wyznowski on May 8, 2009 at 12:49 PM
Even so, you can be sure that the next CBS News/NY Times Presidential Job Approval Poll will be around 92%.
litebrite on May 8, 2009 at 12:58 PM
The Fed doesn’t control interest rates; they just issue their wishes for interest rates. But I think you’re correct that they will just start printing like crazy to buy debt and try to keep the rates near their wished-for targets. They’re all-in on this monetary suicide and can’t turn away now.
progressoverpeace on May 8, 2009 at 12:58 PM
Actually, this is my nightmare scenario. With China putting the brakes on buying our debt, I could see a scenario of Government replacing 401K stocks/bonds with treasury debt and trying to position it as being patriotic.
For me, this would be the last straw scenario… I won’t detail how I think the rest would play out.
God, I pray this doesn’t happen…
dominigan on May 8, 2009 at 1:06 PM
Obama will try neither.
That will be the next President’s problem, when Obama is ridden out on a rail.
Only question is if it will be in 2012 or 2016. Keep praying.
connertown on May 8, 2009 at 1:09 PM
That would be letting the traitor off too easy. I won’t be satisfied until he is held for treason and appropriately punished – which means one thing.
progressoverpeace on May 8, 2009 at 1:11 PM
There’s a 4th option. Make all companies, starting with TARP recipients, buy treasuires. They can call it a “Obama Munificence Donation”. Any company that owns treasuries gains Obama’s “munificence” (ie, he will only control CEO hiring and pay, until he decides to change the deal), those that do not gain Obama’s “benign correction” (ie, he can control every decision made, like whether to buy treauries). This is until Obama gets bored with partial control and just wants to take over every company like his great buddy Chavez.
jarodea on May 8, 2009 at 1:19 PM
Expect the Democrats to try and sneak through a bill that ends the automatic indexing of Social Security and the income tax rates.
MarkTheGreat on May 8, 2009 at 1:37 PM
Ed, TexasDan on May 8, 2009 at 10:39 AM is right – Devaluation is the third option that needs to get attention because it’s mathematically the only way out. Obama’s not going to do either of your options; forced devaluation porks everyone instantly yet solves part of the problem. The part it doesn’t solve is the torches and pitchforks of the people you just screwed, not to mention the people holding T’s.
SkinnerVic on May 8, 2009 at 2:17 PM
ummm….can you say China? yeah, they’ll like watching their holdings go poof.
Fighton03 on May 8, 2009 at 2:57 PM
Or they will have to introduce a new currency. Preferably either geographical (NAU) or global. Or they could just let the pre-planned economic collapse happen.
These are very exciting times.
True_King on May 8, 2009 at 3:00 PM
You forgot a third option: The government can simply start to print more money to finance it’s heart-stopping level of deficit spending. This would create a rate of inflation that would damage savings, the economy and consumer confidence. It would greatly weaken the dollar against other currencies. Think Zimbabwe circa now or Germany circa 1934 for an extreme example of where this can lead in economic terms. This, in fact, is the worst of the three scenarios.
Theophile on May 8, 2009 at 3:06 PM
Actually, it would be far worse. All of the previous monetary implosions have taken place in the context of larger, stable currencies continuing around them – to lean on. If the dollar goes, there’s nothing else. The other currencies (and economies) piggy-back off of the US. A dollar implosion would be a free fall into a chasm the world has never seen before.
progressoverpeace on May 8, 2009 at 3:38 PM
This guy couldn’t sell tea bags in China.
EMD on May 8, 2009 at 4:26 PM
Both. But he’ll like raising taxes more.
Greg Toombs on May 8, 2009 at 4:28 PM
Precisely why devaluation wins in terms of a option over a hyperinflationary spiral hands down.
I personally think this what they have planned all along, especially when they keep fluffing Paul Volcker’s advice.
SkinnerVic on May 8, 2009 at 5:31 PM
I wonder how many of us on this site committed a thought crime after reading this post by Ed. I know I did.
Sheep Dog on May 8, 2009 at 5:58 PM
So .. Treasury has to up the bribe to attract buyers, for 30 year notes…
You know damn well that’s just another ‘promise’ that, when the bill comes due, Barry & Bawney’s grandson will ‘re-calculate’ .. and smack with a 200% tax rate.
CaveatEmpty on May 8, 2009 at 6:21 PM
You should have read this last year.. he spells it all out. The American people didn’t listen. Now it’s going to get interesting.
btw.. the people making the decisions that impact the future of the dollar are NOT Democrats or Republicans – they’re bankers.
popularpeoplesfront on May 8, 2009 at 7:13 PM
Do you think Sotherby’s or some other house would accept Obama for auction complete with wife, kiddies, dog, Emmanuel and Axelrod? Nice package deal for the right buyer. I would personally offer to pay all the fees involved at either end of the deal.
jeanie on May 8, 2009 at 11:58 PM
GeneSmith on May 9, 2009 at 10:44 AM
I’m finally in the position to buy house by the end of this year and the potential for doom and gloom only increases thanks to Obamabi, Democraps and RINOs. Great time to be alive!
aikidoka on May 9, 2009 at 12:05 PM
I sent this article to a bunch of people, got one reply back so far, from the president of my local – NALC – National Association of Letter Carriers.
At 08:23 PM 5/9/2009 -0400, you wrote:
Darwin,
We will be paying for W’s mess for the rest of our lives.
Danny
I can only imagine his reaction to the reply I sent him.
darwin-t on May 9, 2009 at 9:09 PM
If the economy should be recover that is good…for our country economically. Bad for other reasons as Obummer will get the credit along with the other Socialists and then we’re looking at not just 8 years of unicorns and rainbows, but also more time and virtual carte blanche from the grazing sheep bleating occasionally to pollsters to enact restrictive, anti-American policies.
Just nosed around the Media Matters site…they, of course, are blaming President Bush and are attacking Hannity for bringing up these long-term spending repercussions.
What I wonder is, how bad exactly do things have to get before they get a clue? Never I suppose.
Dr. ZhivBlago on May 10, 2009 at 1:48 AM
Late to this thread; sorry if someone else has brought this up. We may have to do what Warren Buffett suggested and devalue the dollar in order to pay the debt. However, we will then need a wheelbarrow full of cash to pay for a loaf of bread. Misery index on steroids, anyone?
College Prof on May 10, 2009 at 9:04 PM
The AP story is now a ghost, gone, white-washed….WTF!
elraphbo on April 20, 2011 at 12:52 PM
nevermind
elraphbo on April 20, 2011 at 12:55 PM
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