Strategic Marketing Dude. Aging guitar hacker. I have been known to howl at the moon on occasion.
Currently working on my Social Media Strategy chops at Consensio.
"I always like to say if a private sector person does it, it's manipulation, but if the government does it it's policy. So they call it policy and they would say they had reasons for it, but in fact it was massively distorting." - Jim Rickards tells his clients to get out of stocks.
Not China, not Russia, not North Korea, not Iran, not terrorists...According to Admiral Mike Mullen, the Chairman of the Joint Chiefs of Staff, the "single biggest threat" to American national security is the US national debt, which is either $8.85 trillion (public debt), $13.4 trillion (total national debt), $20 trillion (total debt including GSE debt), or $124 trillion (total debt including unfunded obligations), depending on one's definition of the word "debt." And as Zero Hedge has long been warning, the imminent increase in interest rates (sooner or later), will eventually put the country in an untenable funding position. "Tax payers will be paying around $600 billion in interest on the national debt by 2012, the chairman told students and local leaders in Detroit." The Chairman (the real one, not his pale imitation over at Marriner Eccles) politely forgot to add that the successful rolling of nearly $600 billion in debt per month is likely an even greater threat to national security.
More from Mike Mullen, commenting on the upcoming annual interest payment forecast:
“That’s one year’s worth of defense budget,” he said, adding that the Pentagon needs to cut back on spending.
“We’re going to have to do that if it’s going to survive at all,” Mullen said, “and do it in a way that is predictable.”
He also called on the defense industry to hire veterans and become more robust in the future.
“I need the defense industry, in particular, to be robust,” he said. “My procurement budget is over $100 billion, [and] I need to be able to leverage that as much as possible with those [companies] who reach out [to veterans].”
And since debt is now the functional equivalent of a nuclear bomb, it behooves readers to know just who the biggest threats to US national security are:
We hope it is appreciated promptly enough, that the entity highlighted in red can just as easily become the biggest domestic threat to national security, should the interests it represents, both political and financial, not get their way.
h/t Robert
In 2006, Mishkin co-authored a report called "Financial Stability in Iceland". The report maintained that Iceland's economic fundamentals were strong. The report was commissioned by the Icelandic Chamber of Commerce in response to critical coverage of the Icelandic economy and certain Icelandic companies in the international business media.
Some pearls of wisdom from Mishkin's extensive understanding of the (soon to be bankrupt) Icelandic economy:
- Fiscal imbalances are not a problem in Iceland: quite the opposite, with Iceland having an excellent fiscal position with low government net debt (less that 10% of GDP) and a fully funded pension system (with assets amounting to more than 120% of GDP).
- Monetary policy has also been successful in keeping inflation low and near the inflation target, particularly when housing prices are excluded from the inflation measure, as is the case in the United States and the eurozone.
- Research on multiple equilibria suggests that self-fulfilling prophecies are unlikely to occur when fundamentals are strong, as they are in Iceland.
- The analysis in our study suggests that although Iceland's economy does have some imbalances that will eventually be reversed, financial fragility is currently not a problem, and the likelihood of a financial meltdown is low.
- Iceland is an advanced country with high-quality institutions. GDP per capita (adjusted for PPP) ranks fifth highest in the world; longevity is the highest for females and second highest for males; unemployment is almost non-existent and way below the natural rate; net government debt is almost nil, labor force participation among older workers the highest in the world, and of women the highest in the OECD (almost 80%, compared with 56% on average in the OECD).
- Noteworthy among Iceland's country rankings for quality of institutions is that Iceland ranks fifth in economic freedom, firs in terms of the lowest corruption, seventh in terms of competitiveness, first in the percentage of population connected to the Internet (ADSL or ISDN), and the first in terms of freedom of the press, compared with number 113 for Turkey and 59 for Thailand [and 666th for America].
And of course:These rankings are of course sometimes arbitrary, but they clearly illustrate that Iceland is a well run, advanced Nordic country that has little in common with emerging market countries, a fact important to recognize when we start discussing financial stability in the next section.All this and so much more make up (no pun intended) this laborious, extensive and magnificent piece, which the US taxpayer was promptly invoiced for, and which was 100%, completely and thoroughly wrong.
This is a very good video. It requires an investment of an hour of your time - but it is worth it. There are some core concepts here that I wish everyone would understand.
We Can, and Should, Do Better Than Ben Bernanke
Ben Bernanke is a good person, a fine academic and a well-respected professor. But those traits have no bearing on whether he should be reconfirmed as Federal Reserve chairman ("The Bernanke Nomination," Review & Outlook, Jan. 25).
It's normal practice in business, professional football and politics that the leaders of a losing organization also lose their jobs, even when fault is nigh on impossible to prove. The Obama administration has obsessed on accountability, whether it's TARP recipients paying bonuses, or the firing of GM's CEO Rick Wagoner. It wants businesses and banks to be held accountable.
Applying accountability principles, there's no way Chairman Bernanke should be reconfirmed by the Senate, let alone reappointed by the Obama administration. Over the past six years, during the U.S. economy's biggest train wreck since the Great Depression, Ben Bernanke has been involved in policy at the highest levels. He was a member of the Federal Reserve Board and Alan Greenspan's right-hand person from 2002 to June 2005. He then became chairman of President George W. Bush's Council of Economic Advisors from June 2005 to January 2006, and finally Federal Reserve chairman from February 2006 to the present. He's been at the helm from the very beginning of this Great Recession. That alone warrants a "no" vote on reconfirmation.
In addition, the Fed's behavior over the past 15 months has put America on a very dangerous path. The Fed has increased the monetary base (high-powered or wholesale money) by the largest amount ever, from colonial times to the present, times 10. Without an exit strategy, inflation is a virtual certainty over the coming decade, while an effective exit strategy virtually assures a further weakening of the U.S. economy. Chairman Bernanke has put the U.S. economy in a lose/lose situation. So on substantive grounds he also should not be reconfirmed.
And lastly, on a more personal note, he doesn't have the gravitas of a Paul Volcker, Alan Greenspan or William McChesney Martin. In this day and age of crisis management, gravitas is essential. Almost anyone would be better than Mr. Bernanke.
Arthur B. Laffer
Nashville, Tenn.
Oh, man. This is so great. This guy Grayson is a lawyer's lawyer. He makes the other guy - the General Counsel of the Fed no less - squirm and wish he were somewhere else. Anywhere else.
I think the accusation he is making - "front running" - is that somewhere down the line the Fed executes trades through retail brokers. And these retail brokers, just before they push the Fed's order through, execute an order of their own so they benefit from the Fed's trade. They trade "in front" of the Fed order. This is insider trading of the highest order - and Grayson wants the right to audit these transactions.
Fascinating. And read Taibb's complete post for an entertaining story about his own encounter with Grayson.
