Debt Rattle Mar 7 2014: The US Economy’s Volatile Inertia


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    Jack Delano Milk Woman Taking Over In Wartime, Bryn Mawr, Pa. June 1943 175,000 new jobs (we await revisions) and a rising unemployment rate (6.7%). W
    [See the full post at: Debt Rattle Mar 7 2014: The US Economy’s Volatile Inertia]


    Raleigh et al,

    I didn’t mean no deep state (if anything, more of course that exists, so why make it a topic), but when I see him claiming the deep state is fighting the banks, I want to see proof, since from where I’m sitting it’s at least as likely the banks are the deep state.

    Didn’t mean all of your opinions in one go either, but a few words on what you think about the quotes you post when you post them, makes them more interesting in my view. Not that what you wrote now is not appreciated. I appreciate everyone’s posts here a lot, and find it a shame the discussion and participants don’t expand more, like in our Blogger days. Maybe the machine has to start huffing and puffing for real again to get there.

    As for the repetition topic, I think that is probably largely in the eye of the beholder. If you don’t like hockey, or soccer, or football, or Formula 1, or figure skating, all these things easily get to appear extremely repetitive, but obviously not for everyone.

    And yeah, it would be good if Nicole returns on a more regular basis to the site, I fully agree.

    Ken Barrows

    What will be the spark? I keep thinking about the marginal cost of a barrel of oil getting to the point where it’s greater than the global economy can bear. TPTB have kept the Brent price pretty stable for a while, but the costs to extract keep rising. But maybe they haven’t risen enough to push the cost of the marginal barrel into the red zone. Otherwise, what’s on the near term horizon? It seems money is “no object” as the supposed broke EU can lend Ukraine “money.”


    “Since the real economy is hardly budging at all, the “new profits” can only come from QE-esque money streams, and that, after 5 years now, is getting extremely worrisome.”

    I don’t think they are worried. Well not seriously worried. There is no limit to what the Fed can and will ‘print’ and everyone knows it which means the markets will have a bid kept under them which means capital flows from the worlds ever multiplying trouble spots will continue to flow in. That means the credit can continue to flow for even the most desperate borrowers.

    I’m speaking some intermediate time frame here. Till summer at least and who knows if not many seasons. I consider and epic blow off well within probabilities.

    Some side notes. I work in manufacturing and the man on the floor, and street, is getting the stock market bug again. NPR had some story today about the jobs number and were touting like crazy the idea that American’s confidence is growing. It isn’t new but with NPR touting ‘confidence’ and ‘growth’ who’s left to question such things. Truth be told Americans are loving the rest of the world falling apart even if most can’t admit it to themselves. Such is a feature, not a bug, of the neoliberal (now quasi neo conservative) game plan as being executed by or through the Obama administration. The operators in the Beltway have no trouble admitting their love of the devolution of the ROW.


    “Pensions in Ukraine to be halved”?
    That’s truly genocidal austerity, the plunge in purchasing power would reduce average ukrainian life expectancy by several years at once. Its likely that thousands will starve as a direct result. In fact, this policy alone would almost legitimize a violent revolution against the new regime and IMF colaborators, moreso than the corruption grievances which fueled last months coup.
    Ukrainian default may have been avoidable before the coup, but is now inevitable.

    The coup which removed Yanukovych by inproper proceedings seems to have been accelerated by his refusal to ratify the trade treaty with the eurozone. This dubious treaty is rumored to not only contain clauses to exclude ukrainian trade with russia, but also to secretly place the ukrainian military under direct jurisdiction of NATO, without the peoples consent. If this is true, it may have been illegal under Ukrainian law for Yanukovych to ratify it.

    European democracy is revealed as maximally hypocritical with the rejection of the crimean referendum and secession, if fomenting the coup wasn’t enough. Any western politician who rejects crimean secession as illegitimate, while accepting the national coup as legitimate, denounces themselves as authoritarian and antidemocratic.
    If self determination by popular referendum is so dangerous to the power of antidemocratic forces in the west, there should be more referendums, in every country, about every important question.


    Sans a total nationalization of the US economy, I don’t see the political Fed “Tapering,” as in cutting back it’s life support of now grossly dependent financial markets, until the one market bigger than the Fed cracks.

    That be the Bond Market. And I don’t see it cracking until inflation is well on it’s way to a Crackup Boom, the “Crackup” part being exactly that event.

    In the days before Moral Hazard, the Bond Vigilantes served the function of keeping the Fed in check.

    Now, in a predominantly Fed controlled lending environment, there are no vigilantes left who will fight the Fed, under the threat it might seize ALL debt instruments, from long bonds to credit card debt to junk car loans. That coupled with the fact, no one can compete with the Fed’s manipulated interest rates, further drying up any alternate sources of credit.

    Only two directions to go from here. Totalitarian takeover of all credit markets, and Soviet style rule for a couple generations, or default through destruction of the currency.


    @ Gravity,

    “Any western politician who rejects crimean secession as illegitimate, while accepting the national coup as legitimate, denounces themselves as authoritarian and antidemocratic.”

    One “Honest” Abe Lincoln comes to mind. Seems a long tradition in the USA.


    I can’t see how we don’t have a complete government takeover as well…the system is so broken we don’t have anything to compare to…the Great Depression…I wish we just had a Depression but I think by reading this and other blogs we are in a lot worse shape this time. I wonder if China is collapsing right now…Where I live, we had train after train taking coal to China now that number seems way down. They have a housing crises that makes our 08 crises look tiny, I expect as they fall you will see commodities come down a lot including Gold….
    I prefer the comments here to the ones I have been reading on “our finite world” which all appear to be panic “We are all going to die!” comments. There will be no more oil almost over night etc….population decrease to 1 billion in 2 years….I am not saying it isn’t going to be hard going forward, but extremism on either side is hard to swallow… Their argument is that right now we are spending $1.50 to make a $1.00 in the oil industry…yes I agree with that but then you have deflation and at some point it should be effective to pull the oil out, you can’t give up oil completely and I don’t think we will. I believe that as Nicole put it we will have up swings and down swings from here on out. Ted

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