Thursday, September 8, 2011

An excellent piece by Karl Denninger

Basically sums up what I have said right from the start that the speculators were being wiped out at the expense of the savers.
A recipe for a disaster as its the prudent ones with capital that need to be protected so capitalism can work in the manner its intended and not a government s; sponsored leveraged Crony capitalist system.
As Ludwid von mises said there is no remedy for fixing a collpased bubble other than to let its run its course other wise the currency itself will collapse. We are seeing the result of this now. I disagree with Denninger though
metals will in the end be the only place to preserve wealth, that and food and maybe guns.
This nis serious stuff and the only way out is to let the market work free of manipulation
yes that means people who borrowed too much and the lenders will be wiped out, but so what
thats the way the system is supposed to work, the prudent get to buy the assets of the imprudent and the system starts again from a more sustainable base ands lenders and people who got leveraged too much learn not to do it again

Jobless Claims: Stinks Again (414k)
Gee, where are the jobs?  We know where they're not - in the US.
In the week ending September 3, the advance figure for seasonally adjusted initial claims was 414,000, an increase of 2,000 from the previous week's revised figure of 412,000. The 4-week moving average was 414,750, an increase of 3,750 from the previous week's revised average of 411,000.
That's nice.  You don't need the DOL report to know there are no jobs, you only need to get outside of the damned Washington DC beltway to discover this.
The futures, after tanking some on the Euro rate decision, dropped another half-percent on this release.
The simple fact of the matter is that this is not about tax cuts (for the rich or otherwise) or any such thing.
The problem is that zero interest rates have destroyed capital formation, destroyed reasonable returns for prudent people who have actually saved their entire life and thus collapsed their income, and as a consequence spending from surplus output and new business formation has collapsed, transferring the only remaining factor for consumer spending to Ponzi-style government deficit spending and credit used for consumption and speculation, none of which is capable of producing prosperity.
more here

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