Just for the record, I think life is meaningless and always have. Of course, when making such a statement, one should define what one means by "meaning." Okay, I think I can do this by contradistinction. To borrow a trick used by religious people, for example, who prove the existence of God by a kind of process of elimination: they can't think of any other way to explain the existence of the Universe, so they say someone must have created it. The psychologically-attuned will immediately recognize this as an instance of massive, teleological projection. It is typical of the arrogance of human beings to believe that anything mysterious must nevertheless be within human ken, and that absolutely nothing could be beyond our comprehension. So we're actually able to "think up" the way the Universe started.
December 19, 2009
December 18, 2009
"The United States cannot force foreign governments to increase their holdings of Treasuries," Zhu said, according to an audio recording of his remarks. "Double the holdings? It is definitely impossible."
"The US current account deficit is falling as residents' savings increase, so its trade turnover is falling, which means the US is supplying fewer dollars to the rest of the world," he added. "The world does not have so much money to buy more US Treasuries."
Thus spake an official of the Bank of China. This is indeed unfortunate, since our budgetary Ponzi scheme depends on a continuing supply of marks to keep the game going. The corporate/government merger known as Washington, D.C. must have overlooked one or two salient points in its drive to create a capitalist paradise:
First, while one can understand that Washington insiders would become careless about the 300 million citizens who make up the actual American populace, you can only indulge this attitude so far. If you create a country where tax incentives and free trade regimes result in the destruction of the labor market, at some point (such as right now) you will reach a juncture where the American masses who are not organically connected to the federal government cannot earn enough money to pay any taxes. When this happens, somewhere north of 50% of government revenues disappear (the elite One Percenters who get their money interest free from the Federal Reserve pay about 46% of all income taxes). We are currently on such a trajectory, since total tax revenues this year will probably just surpass $2 trillion, against expenditures of around $3.5 trillion or so (probably more, because there is still the Epic War to Eradicate Afghan Jungle Gyms to be funded). Adding to this slight noncongruence is the loathsome reality that over $3 trillion in Treasury debt will "mature" this year and will need to be rolled over.
The second problem is that the lumpen proletariat not only don't pay taxes, they don't have the money to buy Chinese cell phones, flat screen TVs and melamine-laced dog chow. Since the Wal-Martcentric "economy" was based on this dubious activity, the "current account deficit," which the Chinese (and their Amen Corner in the U.S. Congress) used to be so happy about is now disappearing. Memo to Mr. Zhu: the American worker is not "saving," per se. He's trying to stay indoors and consume food.
The question then becomes how to finesse your way past the need to auction off something on the order of $4.5 trillion in U.S. debt without having even a single failed auction. If an auction is held and nobody shows up, then for the first time in living memory a holder of U.S. Treasury securities will have to be informed that we don't have the money right now. Personally, I would recommend simply not returning phone calls from foreign central banks. A model for this kind of dodge was probably best demonstrated by William Macy in "Fargo," where he strings out the financing company for as long as possible by (a) not returning calls, (b) promising but not delivering and (c) sending unreadable fax messages. I don't see why Timothy Geithner couldn't use all of these techniques.
Scene: Office of the Secretary of the Treasurer, Washington. A secretary answers the phone.
Secretary: Mr. Secretary, Mr. Zhu is on line one. Again. He says you still haven't credited his account with that $50 billion on the maturing T-bond.
Geithner: Can you tell him I'm in the bathroom right now and I'll call him right back?
Secretary: Okay. (Murmuring into phone.) He's wondering if you're eating too much Mexican food. That's the fourth time in two days you've been...indisposed.
Geithner: Tell him I promise I'll get back to him. Get a number.
Secretary: (Murmuring.) He says he'll hold.
Geithner: Tell him the computer's been down all day and we'll probably get that transfer made by tomorrow morning.
Secretary: Okay. (murmuring). He says he still wants to talk to you because that's what you said yesterday.
Geithner: Tell him I died.
Anyway, Geithner and Bernanke (if he gets confirmed) will think of something. They're very resourceful, and they own a printing press. Money, schmoney. Let's build the B-22 after all. Our best days lie straight ahead.
December 17, 2009
I watched a little of the Bernanke confirmation hearing this morning on C-SPAN, as the august solons on the Senate Banking Committee took turns either commending Gentle Ben for a good job in difficult times, or ripping the guy a new one. Although Bernanke is a Republican, most of the opposition to him comes from Republicans such as Jim ("No Hitter") Bunning and Jim DeMint. Being against Bernanke is a kind of code for "Main Street" advocacy, whereas support for Bernanke substitutes for a wink and nod to the Senate's benefactors on Wall Street. As to the question of whether Bernanke is doing a good job - who the hell knows? I can still get money out of my ATM, so that's a plus.
The biggest worry for Democrats is that the findings could set the stage for gains by Republican candidates in next year's elections. Support from independents for the president and his party continues to dwindle. In addition, voters intending to back Republicans expressed far more interest in the 2010 races than those planning to vote for Democrats, illustrating how disappointment on the left over attempts by party leaders to compromise on health care and other issues is damping enthusiasm among core party voters.
But public displeasure with Democrats wasn't translating directly into warmth for Republicans. Twenty-eight percent of voters expressed positive feelings about the GOP -- a number that has remained constant through the Democrats' decline over the summer and fall. Only 5% said their feelings toward the Republicans were "very positive."
Well, that makes sense. Naturally, the Wall Street Journal would use the normal bipolar analysis: if not Democrats, then Republicans. Between now and 2012, however, things could change a lot, especially if our recent convert to fiscal austerity, Kay Bailey, is right. Naturally, her new belief in a balanced budget wasn't around when she enthusiastically voted for every war Bush&Cheney could come up with, but hey - that's so 2003. It's hip now to talk about "Obama's spending," and to direct everyone's attention to Bernanke, who's been on the job since 2006.
This is an early sign of impending doom, when the jugglers in the Capitol Clown College start aiming their seltzer bottles at each other, or sticking out their size 22-EEEE red shoes as another senator walks by. It means they're beginning to realize that this fiscal crisis probably cannot be hidden much longer. Now where would they get an idea like that? Well, that strange chart up above may give you an idea. This is one of Tyler Durden's (of Zerohedge) typically brilliant summations of just how massively screwed we are. Looks innocent, huh? Yet within its clear, elegant and horrifying details lie the sure signs of ominous portent. The UK, Japan & China, our BFF's when it comes to keeping us afloat, are beginning to peter out. This is an inauspicious moment for this to be happening, because, you see, Congress has authorized the government to "spend" about twice as much money this year as it actually "has." This is on top of the $7-8 trillion we'd piled up in previous years of keeping the world safe for democracy.
The Tea Party people use the iconography of a great patriotic rebellion, the Boston Tea Party of 1773, which protested taxation without representation. A nice heritage. The Journal, I think, is engaging in some wishful thinking in believing that: If not Dem, then Repub. Not necessarily. This is very worrisome. The Tea Party, whatever it is, does not have to know what it stands for in order to be convinced that neither of the Big Two Parties is on their side. Such dangerous stuff. They lack only a corn-pone Hitler to lead them in their fervent belief that they can be great again. And if recent history in the USA has taught us anything, it's that demagogues, in this country, are a dime a dozen.
December 16, 2009
Obama did promise to close down Guantanamo, and damn if he isn't a man of his word. The hapless denizens of the Cuban Club Fed are moving north to the Thompson Correctional Facility in Illinois (not so far from the Blues Brothers lockup in Joliet), only about 100 miles west of the President's private residence. This major development has all the characteristics of other Obama major developments:
December 15, 2009
Sometimes I wonder whether I actually have to have some quote or news item to base one of these cognitive spasms upon. For example, one idea that occurs to me this morning (as I siphon some Peet's coffee into my synapses) is that maybe hikers should just stop climbing Mt. Hood in Oregon in the dead of winter. You know? I mean, doesn't this tragedy get a little repetitious? Is it actually surprising that blizzards would hit a mountain 11,240 feet high in the Cascade range in mid-December?
December 13, 2009
I'm kind of bummed that Dmitry Orlov has indicated he won't write satirical pieces anymore on his blog because it's become "bad taste." By which he means, his predictions of American collapse are now on such solid footing that they are no longer controversial - indeed, it's a matter of looking out the window to verify his prescience. So, he goes on to say, in essence, satirizing America is like "cracking jokes at a wake." Reading James Joyce, however, I get the idea this is exactly what the Irish in fact do at a wake. What else are you going to do? Besides guzzle Jameson's, I mean.