Now and again I come across an article or newsletter that's so to the point, so accurate, that there's nothing to do but bow quasi-reverently in the direction of its author, and tell others about his wisdom so that they can share it. That's what I want to do tonight with Grant Williams' latest 'Things That Make You Go Hmmm...' newsletter. You'll find the latest edition here , where you can download the full Adobe Acrobat version (and subscribe to future editions if you wish, which I highly recommend).
Mr. Williams summarizes our current political, economic and fiscal mess in about 15 pages. I'm going to reproduce only a very few extracts here, in terms of the 'fair use' provisions of US copyright law, and direct you to his article to read the rest. It's well worth your time.
The problem is that both parties [i.e. Republican and Democratic] are addicted to spending money that they don't have, as can be readily seen from the chart below, which shows the US federal debt increase by president.
. . .
It seems as though the only thing there is no bubble in right now is leadership. Where are the leaders? Where are the statesmen and -women? It's not just the USA; Europe and the UK are suffering from a similar vacuum, whilst China is riddled with graft as a few powerful individuals attempt to squirrel away as much money as they can without upsetting the apple cart.
. . .
As far back as 2009, JP Morgan's Michael Cembalest published an article on Forbes.com entitled 'Obama's Business Blind Spot'. In it he took issue with the low level of private-sector experience amongst the President's cabinet ... This lack of private-sector experience is totally in keeping with the behaviour of governments that fundamentally believe they are the solution to every problem. In actual fact, the truth is far closer to Ronald Reagan's famous remark:
[G]overnment is not the solution to our problem; government is the problem.
. . .
How utterly ridiculous have things become? Well, this week we find ourselves in the truly bizarre situation of actually spending more time discussing the '$1 trillion coin'. A google search for the phrase '$1 trillion coin' already yields close to 2 million results, and that number is climbing faster than the signatories to the 'Deport Piers Morgan' petition.
But what the hell is this all about? Are we seriously talking about producing a magical coin that will solve the debt problem?
. . .
It may be technically legal, but why do these people insist on opening their mouths and letting the words escape before engaging their brains?
You cannot simply mint a 1-oz platinum coin, stamp '$1 Trillion' on it, and assume it is worth $1 trillion dollars.
This is simply a cute way for politicians to technically stay within the law and have free reign over spending again. Jeez.
. . .
When will this end? When will the world wake up to the fact that large parts of it are hopelessly broke? When will the public become sufficiently engaged in the world around them to demonstrate the requisite level of outrage? At what point does the cavalier attitude of 'the 1%' come face to face with any kind of justice? Will anyone ever go to jail? Mozilo? Fuld? Corzine? ANYBODY?
. . .
There is an insidious pattern of ineptitude, corruption, and outright dishonesty amongst public servants at the highest levels today—made possible by a public too lazy to try to understand the ramifications of the lies to which they are being subjected.
With each successful escape from detection and prosecution, the audacity of those perpetrating the crimes (yes, crimes) increases. Where will it end? I don't know, but if history is any guide, it won't end either well or peacefully.
. . .
History does have a habit of repeating itself, and people really do need to stop taking what they read and hear about at face value and take a good look around them.
Does anybody in America really think that inflation is running at just 1.8%? Has anybody's cost of living increased just 1.8% over the past 12 months?
What about Europe? Does 50% youth unemployment in Greece and Spain really sound like their problems are fixed and about to go away any time soon?
Is there a Frenchman alive who, having seen what has happened since Hollande's 75% tax rate was imposed, still believes that the measure will raise the money they said it would?
How about Japan? Anybody care to explain to me how Abe-san can generate 3% inflation AND keep Japanese government bonds from collapsing? The two are mutually exclusive—or they used to be.
'The first duty of a man is to think for himself', said José Marti, a Cuban philosopher and political theorist who died in 1885 at the tender age of 32; but today so very few people heed that sage advice that it is enough to make me weep.
What is going on around us, right now, here, in 2013, is going to shape the world for a generation; and the 'solutions' being put in place—and then spun by those lurching from one crisis to another, desperate to staunch the flow of blood—are the solutions of dire necessity and of political survival. Nothing more.
The debt is not being addressed. The spending is not being addressed. Magic coins are being tossed in the air as potential solutions.
It's simple: Too much has been borrowed. Too much has been promised. Too much has been spent.
The time has come to take the pain, and for that to happen the world needs not politicians but leaders.
I fear the places from whence they may spring.
“One of the saddest lessons of history is this: If we’ve been bamboozled long enough, we tend to reject any evidence of the bamboozle. We’re no longer interested in finding out the truth. The bamboozle has captured us. It’s simply too painful to acknowledge, even to ourselves, that we’ve been taken. Once you give a charlatan power over you, you almost never get it back.”
- Carl Sagan
“Most human beings have an almost infinite capacity for taking things for granted. That men do not learn very much from the lessons of history is the most important of all the lessons of history.”
- Aldous Huxley
There's more at the link. Do please read the whole thing . . . and ponder . . . and prepare, because I believe the tidal wave of economic collapse is now almost inescapable.