Hong Kong Phooey
When the biggest, richest, glassiest buildings in town are the banks, you know that town’s in trouble.-Edward Abbey
At a House Budget Committee meeting last Wednesday, second term Chairman of the Federal Reserve, Ben Bernanke said that the Fed will “not print money” to pay for United States burgeoning debt. That’s the traditional way for governments to crawfish out of bad debt, just print a bunch of bogus money and present it as “legal tender for all debts public and private.” Good thing, because I don’t believe the Chinese are going to fall for some Hong Kong Phooey financial trickery.
Maybe Nixon was on to something when he took us off the gold standard.
He also mentioned the unthinkable, cutting “defense” (do we really still call it that and get away with it?) spending, and went on to say that “the economy is not just turning downward, if something is not done soon, it will completely collapse.”
Well, no shit Sherlock.
Some of my business associates that fly in the realm of high finance are expressing considerable concern about things, even to the point of suggesting China and India could soon be running things in the good old USofA. I see that as somewhat doubtful, but there’s no doubt we’re in deep poopoo. If we continue with our bailouts, which are essentially “re-capitalization” efforts using public funds, the Chinese are eventually going to call our hand.
These moves really anger the Chinese, because they come at the expense of the dollar and Treasuries. China could, in a bad, but not “worst case” scenario, renege on their commodity driven derivative contracts. This would be a slap in the face to the US Federal Reserve without “going nuclear” by selling Treasuries outright. This would, however, set off a dangerous chain reaction.
The Chinese have fired a couple of warning shots already. If it happens, the US could choose to default on its debt to China, and at that point, we’d have full-scale economic war and potentially on our way to military conflict. They can raid our natural resources, something has has actually already started. It’s ugly no matter how you look at it.
We’re in this mess for two reasons. One, growth capitalism is a non-sustainable house of cards, and two, the country is being held hostage by an a cadre of greedy, inbred, financial moguls. Washington and Wall Street successfully consummated their evil marriage many years ago, but to this day, we’re still under the thumb of its lascivious, perpetually breeding offspring.
I would have much preferred a steady descent down the mountain to something more sensible and sustainable; however, it now appears we’ll all be hurled off the summit posthaste to the rocks waiting below.
And while all this human madness is occurring, somewhere in the desert, a hawk goes about its daily business of gathering food. A rattlesnake warms itself in the sun, and the desert flora, dormant in winter, prepare to bloom and gloriously announce the coming of spring. Life continues on, unabated, despite the folly of featherless bipeds in suits and ties.