The G20, the new president, and Tom Friedman
Well now, anyone who took my advice on Friday should have had a pleasant weekend, unconcerned about what the G20 leaders would do, which as I figured was just about nothing. They pledged to rig up more regulations that would preserve the place of the money-shuffling class in the world's power structure, and made a few noises about the United States having somewhat less influence in that power structure going forward. Neither of which was much of a surprise.
The next meeting is April 30, barring some calamity between now and then. That's when things might start to get interesting.
The big news of the weekend turned out to be the president-elect's interview on 60 Minutes, in which either 1) he showed the back of his hand to the people who sounded alarm bells in I.O.U.S.A., or 2) the subsection of people who sounded alarm bells in I.O.U.S.A. who serve as his economic advisers have shifted sentiment on a dime. "The consensus is this," he declared, "that we have to do whatever it takes to get this economy moving again, that we have to — we're going to have to spend money now to stimulate the economy… And (consensus is) that we shouldn't worry about the deficit next year or even the year after; that short term, the most important thing is that we avoid a deepening recession."
Ah, I love the sound of printing presses in the morning!
(By the way, the "Personal Bailout Bundle" that features a free copy of the I.O.U.S.A. DVD is still available.)
The new president's "consensus" announced last night was presaged yesterday morning by that fount of depressingly conventional wisdom, Thomas Friedman. He actually went a step further and urged the new president to take a page from the George W. Bush post-9/11 playbook and tell folks to go shopping. Of course, that's a challenge right now for folks who have no savings, no retirement, and no home equity. (Perhaps Friedman's judgment is clouded at the moment by the fact the family fortune he married into, once worth $3.6 billion, is now worth under $25 million. Poor baby.)
Still, Friedman's flaky musings make me wonder exactly what the next "stimulus" will be all about. When bankers collected their bailout money, they used a good chunk of it to shore up their balance sheets rather than loan it out. You and I might not have the same option. Imagine: When we collect our next "stimulus" check, it might come on the condition that it can't be used to shore up our personal balance sheets and pay off debt. Maybe our checks will come in the form of vouchers that can be spent only on consumer goods.
Update: Bill Bonner executes a more thorough filleting of Friedman in today's DR.
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My gold & silver are just waiting for the printing presses to accelerate into hyper(inflation)speed. I wish they’d hurry up!
Comment on November 17, 2008 @ 12:47 pm
Shush with that; I don’t have NEARLY enough yet. Give the rest of us time to get on the raft if we want.
Comment on November 17, 2008 @ 4:02 pm
Yikes! I feel I’m in the presence of King Midas & Kong Solomon. I’ve only bought my first piddling bits of silver. I hope the Mogambo Guru doesn’t learn what a sloth I’ve been. Guess I’d better get with it lest the train leave the station without me. Well, all is not lost; the grub & guns side of the equation is looking pretty good. I might not be able to stop the Zombie-Gov’t.-Biker-Sheeple hordes…but, I’ll be I can slow ‘em down a bit.
Comment on November 17, 2008 @ 4:17 pm
Yikes! I feel I’m in the presence of King Midas & Kong Solomon. I’ve only bought my first piddling bits of silver. I hope the Mogambo Guru doesn’t learn what a sloth I’ve been. Guess I’d better get with it lest the train leave the station without me. Well, all is not lost; the grub & guns side of the equation is looking pretty good. I might not be able to stop the Zombie-Gov’t.-Biker-Sheeple hordes…but, I’ll bet I can slow ‘em down a bit.
Comment on November 17, 2008 @ 4:19 pm
If the government is going to start printing money like crazy then the lest they could do is come up with some higher denomination bills. Maybe we’ll need some ten thousand dollar bills in 2009 to buy a few groceries. Maybe some snazzy 10 million dollar bills for the same small pile of shampoo and hot dogs by 2010 I’m thinking. Hey Zimbabwe ! We are right behind ya !
Comment on November 17, 2008 @ 5:00 pm
Everyone seems to think inflation is coming. Everyone except the experts, Mr. Long Term Bond. Mr. LTB was thought to be irrational as he kept going up in price and yields kept falling. However, it was the rest of us that were irrational. Mr. LTB’s prediction powers are still phenomenal. I suspect all of you predicting inflation are probably going to be wrong. Mr. Bond is still telling us that deflation is in our future. Some deflations are so enormous that no amount of money printing will resolve it, at least no amount less than zimbabwe style money printing, and no one is c ontemplating that.
Comment on November 17, 2008 @ 5:10 pm
So strangely trillion dollar deficits and zero percent interest don’t worry me. The deflation monster will eat us all. I feel good about selling my gold and silver now.
Comment on November 17, 2008 @ 5:11 pm
Us Hungarians are lots smarter than you people.
When every other country in the world was printing new notes so they could replace their one tschatka notes with one thousand tschatka notes, we were smart enough to just print ‘,000′ stamps to paste onto the one tschatka notes to make 1,000 tschatka notes!
Also, they came in handy later when we needed the 1,000,000 tschatka notes.
Comment on November 17, 2008 @ 5:13 pm
Correction:
“(Perhaps Friedman’s judgment is clouded at the moment by the fact the family fortune he married into, once worth $3.6 trillion, is now worth under $25 million. Poor baby.)”
When I read that I thought, “yeah, 3.6 trillion Zimbabwe dollars…no one family has 3.6 trillion”.
That should be 3.6 Billion U.S….still, a rather hefty loss to the old portfolio. The link confirms the “billion”.
Comment on November 17, 2008 @ 5:22 pm
Irrestible force paradox.
Deflation
Inflation
One is going to win. And the wrong side will be destroyed.
How about both. Inflation then deflation. A hyperinflationary great depression. Either way gold will shine.
I’m cashing out the 401K and buying the following:
Batteries- 9V- Car Batteries
Heat Pumps
Generator
Diesel Fuel
Food
Water
Bullets
Medicine of all stripes
Lumber
Screws and Nails
Knives
Brake Pads
Car Tools- for DIY repairs
Yards of fabric
Alcohol
Cigarettes
Anyone else have any additonal suggestions??
Comment on November 17, 2008 @ 5:25 pm
OK, one just has to ask !!! What are you going to do with all those car batteries ?
Comment on November 17, 2008 @ 7:56 pm
I saw an interview on Bloomberg a few weeks back with a guy whose name escapes me, but he had suggested the next stimulus be a debit card with an expiration date. Here’s $600 - use it within 3 months or lose it.
Forget the fact that it’s giving “the people” the illusion that THEY are helping the economy. It’s not as if this is any different than the government just spending the money itself. But hey, at least we get the individual choice of how to spend our tax dollars! Which begs the question of why should there be taxes at all?
Comment on November 17, 2008 @ 9:27 pm
The problem with all these economic stimulus packages is that they are for such stingy small sums. Why not if every year the government just hands out checks for like 40K so we don’t have to do any of that annoying work stuff ! Think how much less oil the US would have to import if we didn’t all have to engage in this employment nonsense ! We could solve the oil dependency problem lickity split right ?!
Comment on November 17, 2008 @ 10:03 pm
Well, people have laughed at us gold bugs all along, calling us the “tinfoil hat crowd” and who suggesting we were ten cents short of a dime, playing hockey with warped pucks, 2 bricks short of a load, 10 pound of crap in a five pound bag! Especially that Nadler guy from Kitco, with his suggestion that gold will get so cheap we can pave our driveways with it. Soon we will have our revenge! No more hiding in the damned mutant-proof bunker for me! Gold at $1000, $2000, or $10000! WooHoo! BRING IT ON!
Comment on November 18, 2008 @ 3:47 am
yes madmarc bring it on. Gold 750 for the next ten years means you lost money. The deflation monster is too large. You can print all the money you want, but if people don’t spend it, it doesnt matter.
Comment on November 18, 2008 @ 8:27 am
Fekete has worked out a mechanism whereby increases in money supply lead to worsening deflation. Complex systems are not as easily predictable as people think. It’s not clearly cause and effect with dependent and independent variables. A simplistic view that increases and decreases in money supply always lead to inflation and deflation doesn’t take into account the complexities of a system we barely understand, but pretend to understand with our primitive constructs such as “money supply.”
Comment on November 18, 2008 @ 8:30 am
Well I figure 2 car batteries for both of my cars, will last a few years. I have newish cars (paid for in cash), and I am trying to gather as much info as I can about how to DIY simple stuff (brakes, oil change, transmission fluid change)work for my cars.
I have done the same with laundry detergent, cleaning supplies and the like. My wife has developed sowing and knitting skills. I guess I am trying to learn now how to deal with the possibility of not being able to go down the street for certain things I could do at home.
I am the only gen Y I know that is doing this. Maybe i should stop reading gold bug sites.
Comment on November 18, 2008 @ 9:06 am
Oh, I though you were buying like thousands of car batteries and wiring them all together and constructing some kind of infernal device to generate a gamma ray weapon. Whew! Glad to hear it’s just for spares!
Comment on November 18, 2008 @ 1:04 pm
Nathan,
I’d also recommend water purification and storage systems like rain catchments. Learn how to apply high-density farming techniques to your space. Plant fruit trees now. Potatoes are good too. Spam lasts forever. Toilet paper is a must and don’t forget a copy of Gulag Archipelago for when you can’t sleep…Just think about what you use/do in a month and see how much of that you can store or learn to make yourself.
I like zimtran’s idea for a gamma ray gun (”Devalue THIS”). Tho if you want cheap burglar alarm, just wire a couple of those car batteries to the doorknob. (please note the sarcasm–I don’t want to be implicated in any deaths).
Comment on November 18, 2008 @ 5:18 pm
Why oh why is everyone and their brother crowing about being right about the G20 “non-event?” I swear, I’m seeing it everywhere I look this week on the net. The magnitude is staggering.
Dave, did you ever bother to ask yourself, just why would they have a G20 meeting, yet announce in advance it would be a non-event?
My guess is that you’ve been setup to be an apologist for their “failure.”
I have no idea what the purpose of this meeting was, other than to pave the way for the next one in the announced series, with the mandate that it not be inconsequential.
You know, the typical we the sheeple, “do something!”
Besides, you’ve based your opinion on mere words, in the form of an official organization statement. This tells us nothing about what happened last weekend. It only tells us that they are playing dumb and incompetent right now. You know, typical political posturing.
The real question is why.
And what pre-planned drama is coming next.
Can’t you see that this is every bit as staged as professional wrestling?
Your analysis reminds me of the people who yell and try to warn the referee that one of the wrestlers is cheating behind their back. If they could only get the ref to pay attention to them, he would surely put a stop to it, restoring a fair fight, right? Sometimes he does just that, but only for a second, then he goes right back to doing whatever distracted him in the first place, becoming once again inconsequential. Just like the G20.
It is real only to the extent you choose to believe in it.
Comment on November 18, 2008 @ 6:32 pm
Hey (8?», did you read what I wrote on Friday? I said, “Dramatic action might be discussed. But it likely won’t be decided on, and certainly not announced. Expect a formal statement at the conclusion that will be larded with platitudes, and no hint about future direction.”
But no, I’m being “setup [sic] to be an apologist for their ‘failure.’” Sheesh!
Comment on November 19, 2008 @ 9:23 am
[...] of puts things in a different perspective when you hear the new president saying essentially, "Damn the deficits, full speed ahead." If someone like David Walker [...]
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