There comes a point where the rest of the world no longer is willing to play along with this fraudulent scheme, as their US investments depreciate by the day and their ability to export goods to us to finance their investments disappear.
Import price ramps - even from "pegged" nations like China - are already apparent. This last month's data, printed last week, confirmed what is now a six month trend of rapidly-accelerating import price inflation.
This trend will continue until and unless we address the confidence and excess liquidity problems!
Trichet and others are now warning of a potential economic war if our nation does not stop the shenanigans immediately.
They are right - and we are wrong - on this one. It is time for The Administration to get off its ass and act - put in place real reforms, force marks to market and get rid of the SIV-cum-AIDS nonsense.
Our financial system must have its integrity restored.
The Petition is a part of that.
But it is only a part.
We, as Americans, must force politicians to answer to this problem. Neither of the political parties want to talk about it - during the last two debates I wanted there was the inevitable attempt to either brush off nearly-$100 a barrel oil or blame it on "Bush-and-company."
Both approaches are wrong.
The simple fact of the matter is that until and unless America chooses to bring out its trash in the financial markets and force those institutions who tried to hide risk to bring it back on their balance sheets and appropriately account for it, the slide will continue.
At some point - perhaps in the next few days or weeks - that slide will truly gain legs.
When it does, you will see a selloff of breathtaking proportions across both equities and bonds as the "hot money" decides that while the door is very small, and there are many in the theatre, with flames licking at the curtains they can either try to get out and possibly die or certainly die by staying put.
That event, if and when it comes, will be truly something to behold - from a distance.
Like a nuclear blast, it will be awe-inspiring - so long as you're not too close.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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