Have you noticed how financial institutions are starting to get worried about the possibility of a US default, if the US borrowing limit isn't raised?
First we had the head of the World Bank, Jim Yong Kim, expressing 'concern'. Now we have Christine Lagarde, who took over as head of the International Monetary Fund, from Dominque Strauss Kahn after he was implicated in a sex scandal, saying her piece.
Ms Lagarde, the former finance minister of France, has warned that a default by the US could tip the world into recession and massive disruption. Leave aside for a moment any thoughts or doubts about any former minister from a country such as France, opining on debt. Forget that France's debt represents >90% of GDP!
Ms Lagarde and Mr Kim are joined by Jamie Dimon from JP Morgan (yes the same JP Morgan that has got $23Bn stashed away to cover expected legal charges for allegedly inappropriate banking behaviour, yes the same JPM that paid a fine of more than $900M just last month for bad behaviour)
I find it worrisome that these 'mega bankers' seem to have learned nothing from events in 2007 and 2008.
Here we have a US Government that continues to spend money far, far in excess of what it takes in. The debt junkies that are running the US government (Democrats and Republicans) know that the US' economic model is unsustainable. They know! However, these 'patriots' fiddle and prattle about Obamacare (they can do this because Congress is exempt from the Affordable Care Act!) while the US burns!
Think about going to see a banker, let's call him Jamie-Kim Lagarde. You have been called in because once again you are maxed-out on your credit cards and overdrafts. You have been told to bring along with you a budget for the next year.
JKL: Well when I look at this budget, I see that you want to spend more money next year than you are earning.
You: Yes that's right. I have all of these things and people that I need to pay because they think they are entitled to this, plus I have a couple of things that I like to do and, hey, these toys ain't cheap!
JKL: I understand, consider yourself lucky that you don't have to spend a fortune on lawyers. Anyway, what is it you want to do? I keep thinking that giving you extra credit maybe isn't the best solution because you just keep coming back for more.
You: But I need this, people will starve, chaos, in our household, will ensue...
JKL: Wait! I didn't say we wouldn't give you more money but, you know, I just want to avoid you getting into the same situation as some Europeans that we lent money to. These guys got into a pickle and kept promising they would repay but then they couldn't. They even 'stole' money from other people's bank accounts but my bank still lost money!
You: I hear you and I have spoken to some of my neighbors about their over-spending. I mean some of these folks think they have a god-given right to spend other people's money and that the government or someone else will just print and keep on printing the extra money they need.
JKL: Yeah, well let's not go there. OK, we will give you some extra credit but before you start jumping up and down, this is going to cost you. As well as extra interest, I need you to get together with a few of your buddies and kick-up a ruckus somewhere. I have interests in some businesses that would benefit from coming in after you have done your bit and fixing things up!
You: You got a deal, buddy. See you next year!
Of course, on the personal level it wouldn't happen that way. JKL would simply take all that you have, to the world declare you bankrupt and a deadbeat, and then ask his shareholders to stump up money to fill the losses. All the time, ensuring that his fat pay checks and bonuses continue to roll in and pushing governments to continue so called 'quantitative easing' as no one can now afford to turn-off this cheap source of finance.
Only in the USA!
Actually that's untrue, same applies in Japan, Europe and elsewhere. Though, the USA does kind of excel at fiscal diarrhoea
First we had the head of the World Bank, Jim Yong Kim, expressing 'concern'. Now we have Christine Lagarde, who took over as head of the International Monetary Fund, from Dominque Strauss Kahn after he was implicated in a sex scandal, saying her piece.
Ms Lagarde, the former finance minister of France, has warned that a default by the US could tip the world into recession and massive disruption. Leave aside for a moment any thoughts or doubts about any former minister from a country such as France, opining on debt. Forget that France's debt represents >90% of GDP!
Ms Lagarde and Mr Kim are joined by Jamie Dimon from JP Morgan (yes the same JP Morgan that has got $23Bn stashed away to cover expected legal charges for allegedly inappropriate banking behaviour, yes the same JPM that paid a fine of more than $900M just last month for bad behaviour)
I find it worrisome that these 'mega bankers' seem to have learned nothing from events in 2007 and 2008.
Here we have a US Government that continues to spend money far, far in excess of what it takes in. The debt junkies that are running the US government (Democrats and Republicans) know that the US' economic model is unsustainable. They know! However, these 'patriots' fiddle and prattle about Obamacare (they can do this because Congress is exempt from the Affordable Care Act!) while the US burns!
Think about going to see a banker, let's call him Jamie-Kim Lagarde. You have been called in because once again you are maxed-out on your credit cards and overdrafts. You have been told to bring along with you a budget for the next year.
JKL: Well when I look at this budget, I see that you want to spend more money next year than you are earning.
You: Yes that's right. I have all of these things and people that I need to pay because they think they are entitled to this, plus I have a couple of things that I like to do and, hey, these toys ain't cheap!
JKL: I understand, consider yourself lucky that you don't have to spend a fortune on lawyers. Anyway, what is it you want to do? I keep thinking that giving you extra credit maybe isn't the best solution because you just keep coming back for more.
You: But I need this, people will starve, chaos, in our household, will ensue...
JKL: Wait! I didn't say we wouldn't give you more money but, you know, I just want to avoid you getting into the same situation as some Europeans that we lent money to. These guys got into a pickle and kept promising they would repay but then they couldn't. They even 'stole' money from other people's bank accounts but my bank still lost money!
You: I hear you and I have spoken to some of my neighbors about their over-spending. I mean some of these folks think they have a god-given right to spend other people's money and that the government or someone else will just print and keep on printing the extra money they need.
JKL: Yeah, well let's not go there. OK, we will give you some extra credit but before you start jumping up and down, this is going to cost you. As well as extra interest, I need you to get together with a few of your buddies and kick-up a ruckus somewhere. I have interests in some businesses that would benefit from coming in after you have done your bit and fixing things up!
You: You got a deal, buddy. See you next year!
Of course, on the personal level it wouldn't happen that way. JKL would simply take all that you have, to the world declare you bankrupt and a deadbeat, and then ask his shareholders to stump up money to fill the losses. All the time, ensuring that his fat pay checks and bonuses continue to roll in and pushing governments to continue so called 'quantitative easing' as no one can now afford to turn-off this cheap source of finance.
Only in the USA!
Actually that's untrue, same applies in Japan, Europe and elsewhere. Though, the USA does kind of excel at fiscal diarrhoea
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