Bill Bonner, back in London for the Daily Reckoning:
*** "For the first time in the post-World War II era, the United States faces a future in which every major category of federal spending is projected to grow at least as fast as, or faster than, the economy for many years to come. That means not just pension and health care benefits for retiring 'baby boomers,' or increasing interest payments as
deficits and interest rates rise, but also appropriated or 'discretionary' spending for national defense, for foreign aid and for domestic homeland security programs," writes Pete Peterson.
*** "When the Asian financial crisis hit in 1997-98, the
U.S. Federal Reserve tolerated a liquidity boom that
spawned the Internet bubble. When the Internet bubble
burst, the Fed tolerated another wave of liquidity, which
has led to the global property bubble," says Andy Xie of
Morgan Stanley. And the debt bubble in Anglo-Saxon
countries. And the capital investment bubble in China.
"China's boom is itself partly the product of the Fed's super-lax monetary policy," concluded the economist. "With its currency pegged to the dollar, China has been forced to
import America's easy monetary conditions. Its [China's]
higher interest rates have attracted large inflows of
capital that have inflated domestic liquidity, encouraging excessive investment and bank lending in some sectors that could lead to a bust."
*** Busts, busts, busts... and more busts. Get ready for
them, dear reader. Enjoy them.
*** Money. Money. Money. It seems as though people think of
little else. We write about it every day, but we don't understand why people make such a fuss about it.
Here in Europe, we the humble scribes at The Daily
Reckoning like to keep things simple and inexpensive. Like Morning Naughten, we have discovered that you can live reasonably well on relatively little money.
We don't need much. Just the other day, the gardener at our
country place asked if we would like to install an
automatic watering system in the new ornamental gardens we
are building. "No," we replied, "just do it the
old-fashioned way... you can water them with a hose."
Keep it simple.
And then, our secretary asked if we would like to have some
new-fangled cable TV system at our apartment in London.
"No," we replied again. "We don't have that at our
apartment in Paris. We'll make do without it here,
either."
Keep it cheap.
*** A Daily Reckoning reader comments:
"Today, we are witnessing two unfortunate realities. First,
an administration that has lied so much they actually
believe their own lies and preach them at every opportunity
as if it the new gospel. When faced with overwhelming
evidence that the cause of the war was unjust, all they do
is stage more press conferences with even more
determination and emotion that they have done the right
thing to protect America. I believe it was some famous Nazi
who said, 'If you make the lie big enough, it becomes the
new truth.'?
"The second seems to be the incredible gullibility of the public to believe these lies despite all the evidence. It would be unpatriotic to question them.
"So the band plays on, and people dance, eat and drink. All
the while the water rises deck by deck through the ship.
Peak oil arrives, and people look upon it as some strange
thing they have never seen, much like the dinosaurs must
have looked upon the light that streaked through the sky on
that fateful day some 65 million years ago. Report after
report is starting to reveal just how much financial
trouble there is with Social Security, medical and all
these government programs. The water rises, but just one
more dance - the music is so good.
"I live in a world of mass delusion, which believes it will
not end. Trust me, I live in California! This is why there
is no outrage, because there is nothing perceived as wrong.
In fact, I feel that the public in general is completely unaware of just how bad the future could be in the not-so-distant years.
"This morning, I was in the backyard and saw a passenger
plane (maybe a 737) fly over, and I could not help but
think that in 30 more years, they will be no more, and I
will only be 65 at that time. When you really look at Peak
oil alongside the demographics of aging in this nation, I
think it is the closest thing to Armageddon I have ever
seen. Yet, not a damn word is said in these debates about
this iceberg.
"How can people not notice the slant? Do people not hear
the water? Is the music so wonderful that it drowns out all
else? Lies have become truth, and the truth is called lies.
Regardless, I am 35, and I plan to live a long and good
life, within my means, protecting my wealth through all
that will come in the next 30 years.
"So every month I travel to the local coin store and
contribute to the only savings I can see lasting in the
face of such problems... sometimes silver, sometimes gold, because when I look towards my retirement some 30 or more years from now, paper has no real value except for fires, wrapping stuff and wiping your privates.
"History is incredible at times, and historically, we must
be completely blind." |
