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There’s small choice in rotten apples
As we learned yet again from the Made-off and Stanford Bank Ponzi schemes, they only collapse when forerunner account holders or creditors needing their money exceed rearguard sacrificial lambs surrendering their money.
A capital and labor strike double whammy may loom.
That’s what the Auto, Bank and Healthcare bailout stims are all about.
This is why we suggested in our last Gedanken thought experiment that the day of reckoning Treasury default approaches. It may manifest either by government not paying interest, or government turning Treasury Bills into Notes into Bonds via defacto force majeure.
We saw a dress rehearsal in California, which for at least the third time in history issued registered warrant IOUs. Banks said this time they would not take them, since budget cuts were not enough to cover them, and the Governator refused to issue even more debt at higher cost and lower rating.
While government monopoly media denied it, the Federal Government came to the rescue by advancing California funds ostensibly designated for the people. Thus the day of reckoning was delayed yet a little more.
The Swiss banker thought it hardly a coincidence when Warren Buffett and Bill Gross, who manage over half a trillion debt and equities between them, came out on Tuesday 18 August 2009 to agree with Canada and many others like Hosein Askari, Ambrose Evans-Pritchard, Marc Faber, Jim Rogers, Nouriel Roubini, Nassim Taleb, that the side effects of monetary medicine might prove fatal to Treasury debt or the dollar.
Without in any way wishing to overdramatize matters, we do believe such signals should be taken seriously. (sic) In exactly the same way as it is inadvisable to ignore rats leaving a sinking ship.
Further. The Swiss Banker sees taxing exiles as misguided policy, for the results of them selling US securities may be much higher interest rates and costs of capital, along with reduced investment for prosperity.
The state’s ravenous appetite for debt is preventing private borrowers from getting access to the available finance. This is known as the “crowding-out effect.”
