The simple fact of the matter is that nobody is willing to have an honest conversation

So just what is the proper remedy in such a situation? For instance, you live in the town below the dam and the powers that be are chipping away it. Soon it will collapse, releasing its destructive force upon you (and your family). You point this out to them for years but they ignore you and continue chipping at an even faster rate.

What do you do?

The only real question that remains is how long can the games, can kicking be played until we have another disaster, either in the bond or stock markets.

These central bankers aren't stupid. They are well aware of the risks here. This is what happens when their system of theft and greed is threatened. They will do anything to maintain the illusion.

Quote:

the closer we come to the point where the owners of capital simply throw up their hands and say "screw you

These must be owners with far more capital than the retirees I know trying to scrape by with no income. These are suicidal.

Anyway, the PTB treat the larger owners of capital with contempt, where you gonna go? It's a small planet. I am getting to appreciate more and more the title of Alex Jones' show, "Prison Planet".

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And the market never waits for you to hit the wall, just as it has not in Spain. It always anticipates, and given Washington's refusal to deal with this problem front-and-center, the presumption is that loss of confidence will happen sooner rather than later.

I bolded part of that quote, what may be the most important part. Someone posted about a personal bankruptcy a few months back where they said "we went broke slowly at first and then all at once." Well, the anticipation part means that we are heading toward the wall "slowly" but that we will hit it all at once. That is what will happen to us, save after save after save and then all at once wall.

I don't know when but I expect things to start getting really dicey before the election, but who knows maybe even this month (or week). Predicting timing is awfully difficult.

Flap

How do you define capital? Can you count balances in bank accounts denominated in US dollars? After all, these dollars are manipulated continuously by the government and the big banks. In effect, everything you have is controlled by the government, your dollars, your gold, your home, etc. All they have to do is declare a national emergency, and virtually sieze everything you have.

Let 'em try.

As I said before. There is a huge pot of money (trillions) that the Government can tap into (I.e. 401ks, IRAs, etc.) before it goes bust. Given the proclivity to spend with reckless abandon, I expect them to do exactly this. Exchange your hard earned money for worthless 10 year paper yielding 1.5% (or less). It will be a few years yet before the bust happens. I say about 2016 when the public debt:GDP will be about 120% (which was where Greece went off the rails). Just IMHO.

"Maginot line..." Karl ;-)

"we have to eat our peas"

I've heard that before, but why did the originator choose peas? Because of the "ea" in both "eat" and "peas"? I love peas. The most hated veggies are broccoli (love it), spinach (like it in salad only), brussels sprouts (love them), asparagus (prefer white), and okra (hate it). Peas don't make the list.

I love both broccoli and brussels sprouts, and like spinach and asparagus too.

Okra, on the other hand, I can live without.

That's what 2A is for...preventing the final idiocy.

I'm too old for that ****.

It continues like the housing fraud. A few of the same players. Until it blows up. Nobody was prosecuted.

I think that, barring unforeseen natural disasters, the can-kicking can go a few more years. The markets seem to have a relative trust in the dollar right now, which means our FED might try to get away with pumping some money to Europe. (just as 1 "for example")

Maybe they won't "seize" accounts in the near future, but I expect to see the IRS going full-force after a lot of tiny things that they can slap big penalties on. I am a very small business, but was visited last year by one of their new trainees just for a missing quarterly payroll form that I received no previous notice of. They did not allege missing money but left a threatening form that might have caused some people to fork over a fine. My rather-experienced CPA negotiated this down to a $300 fine, but said he had a rash of these when the IRS hired new trainees (via the healthcare law). I expect there are a lot of underhanded ways the government can bring in more revenue also by fining businesses through OSHA, EPA, DEA, etc.

The only thing I disagree with in the analysis is the, "It always anticipates" part. The idea that something will happen before hitting the wall.

I don't think there has been an example where all major market moving participants (e.g. central banks, TBTF banks, and governments) have been in a position of mutually assured destruction. The ability for any one segment to assure a meltdown if they identify the reality of debt.

Thus, they all have the addiction and will not do anything until the wall is smashed and there is absolutely no potential for setting perception (e.g. lying) to get a new fix.

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The only thing I disagree with in the analysis is the, "It always anticipates" part. The idea that something will happen before hitting the wall.

Good point. I think of the market always being right in the same way a pathologist is always right. They get the last word in the diagnosis, but they aren't necessarily good prognosticators.

It's not prognostication. Prognostication would be the market going to **** right NOW, since there's no evidence anywhere that we will tackle any of this.

It's detecting the inevitable before it actually happens, which is a LONG WAY from anticipation. Nonetheless, the market has historically always reacted before the wall was actually hit.

Follow the money, 2.8 Trillion a year in US health care, yet 532 billion a year Medicare is a big third rail for the US masters.

Just talked to an over 65er who said her Medicare part C premium is ZERO.,
for all I know her Medicare Advantage prescription drug premium is ZERO.
Turns out the Feds pay to UHC Medicare Advantage 800 a month or something for every person on the rolls. This was passed under the Demos and Bush the Younger.

I'm going to change my definition of of wealthy to someone who does not need to personally expend any energy/cash to keep food on the table.


Now ... even those on welfare can be considered wealthy.

Leverage (de) is going to eliminate a lot of the wealthy classes.

Without a cash flow a lot of wealthy classes would be eliminated.

I heard on Bloomberg this morning they are planning another emergency meeting on this. Probably another BS "agreement" and BS rally coming. Lather, rinse, repeat until the hair finally falls out.

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Well That Didn't Work (European "Rescue")

I suspect the question of whether or not central bank bond buying worked depends on whether you held some sovereign debt and were able to foist it off on the CB (and the public). The boyz that got "saved" probably think it worked great. Hell, wouldn't surprise me if they're the same boyz who low-balled Spanish bonds this morning. And, if Merkel would let them, they'll do it all again.

Flinstones economics: Charge it!

http://www.youtube.com/watch?v=8rqNZAIQH....

http://www.youtube.com/watch?v=WcQzdYk7Q....

I agree with Leviathan, who says they just hit the wall? What percentage of the 1% are there because there are massive fees to be derived from controlling the pile of debt? Bankers in general? People who draw massive receipts from various government agencies? This is the wall.

All taxes are theft. None of us would pay them if there wasn't a penalty. I am beginning to believe that debt is what is necessary to replace the demand that government takes out of our pockets. It is clear that some connected people use debt to make a lot of money in an inflationary environment. Are they smart? Maybe, but maybe they are merely riding what the government proposes, connected? How many of the multi-generational streams of wealth around the world, including the US were based on connections within the government?

What hasn't been tried since Woodrow Wilson was elected and likely before is a reduction in the state. Hoover was accused of it, but that was not the case. The Great Depression wasn't caused because Hoover didn't do enough. It was caused by the pyramid of international debt built up by Wall Street and from the World War. Think there isn't a connection now? FDR acted because the bankers were going to lose what they had and end up hanging from light posts. In the meantime, he swelled the state. 1933 kind of coincided with a bottom, not made by the New Deal coming into focus, but by rigging the banking system, making us liable for what they lost, confiscating the gold, which belonged to the depositors. The Great Depression didn't end there, in part because there was nothing done about the overhanging debt and because the government took so much of the economy for itself.

Karl likes to point to the 1980's. This bomb was made in the 1960's with the Viet Nam war and the Great Society. Not that the fuse wasn't lit before, as there were warnings of excess in the 1950's. It was covered up by the progressive tax structure and the gold standard, both destroyed by extended inflation. Anyone believe Reagan made a mistake on tax rates, imagine hamburger flippers in the tax brakets the code of 1954 would have placed them? The tax rate on rents and interest at $200k was 70% and most middle class people today would be in the 50% bracket.

Where is the wall? I think the wall is where the political class won't give up anything, the FSA has to be fed or revolt and the taxpayer finds it more attractive to join the FSA than to continue to work and give it all to the FSA and political class. Greece is a prime example. The state of Illinois is another.

Obama is flapping his lips today. Going to tax the successful people. Blabbers that only 2% of small business makes over $250K. Yeah, and most of them don't hire anyone or they are Amway distributors. He will tax the legitimate and compensate the illegitimate under another smoke screen.

Mish had a post last night on actions in California in regard to cities and their pension liabilities. The taxpayers have had enough. Under this Obama plan, the successful are going to be taxed. Walmart will go on as usual. Wall Street will merely find a new government scam, inflating on government guaranteed money.

For more information on how the nonsense works, read Frank Chodorov's "Rise and Fall of Society"
http://library.mises.org/books/Frank%20C....

quote Chodorov:
The corporation president has become accustomed to a
standard of living calling for a certain income. He likes it
and so does his wife. It is true that he has earned three times
that amount and that the State has confiscated two thirds of
his earnings. He resents the confiscation, wishes he could
retain more and thus improve his standard, but finds it convenient
to go along with the State for good reason. Perhaps
his corporation is wholly or partly in the employ of the State;
in that case, his income is actually derived from the taxes he
is forced to pay. It is true that his employees in the aggregate
pay more than he does and, though he has not figured it out,
the probability is that he senses a profit in this allocation of
taxes. Perhaps, if they were not taxed, his employees would
buy the corporation's products as liberally as does the tax
collector, but selling to a multitude of buyers would entail
more sales and credit problems, and for the time being
(which is all he is interested in) he finds it easier to do
business with the One Big Buyer. He hires a lobbyist to do
his selling.

page 157

and

In these circumstances, the long-termer, the prophet who
harps on first principles and the ultimate consequences of
violation, is a dealer in unreality and an unwanted disturber
of the adjustment. His vagaries may be remembered and his
prophecy recalled when at long last his forebodings have
come to pass. That is, when the restraints multiply to the
point where adjustment leaves little area for living, when a
miserable existence is all that one can get out of one's efforts.
It is then that the primordial instinct for freedom looms
larger than the instinct for life itself and there is nothing left
to do but to throw off the shackles of the State. But that, for
the present, is in the unrealistic realm of the long-term.
The instinct for freedom, the yearning for self-expression
without let or hindrance, is the stuff of which Utopia is made.
Were it not for that element in unscrutable man's makeup he
would never be involved in political matters and his history
would be like unto a history of the jungle. Man, the producer,
must have freedom, while man, the predator, puts limitations
on freedom, and this inner dichotomy is the plot of his life
story. His search for the "good society" is his search for a
denouement. Whether or not it is in the nature of things that
the struggle should go on indefinitely, he cannot help trying
his hand at fashioning a happy ending. And what follows
herewith is simply another attempt at the same thing.

Page 160

What's the problem ? We just owe the money to ourselves, right ? /sarc

The collective is winning.