Category Archives: Debt

America, We Have To End the Wars Now, by Scott Horton

You could take care of a lot of sick people and provide a lot of unemployment compensation with the money the US government spends on maintaining and expanding its empire. From Scott Horton at antiwar.com:

Can anyone think what our society might have spent six and a half trillion dollars on instead of 20 years of war in the Middle East for nothing? How about the trillion dollars per year we keep spending on the military on top of that?

Invading, dominating and remaking the Arab world to serve the interests of the American empire and the state of Greater Israel sounds downright quaint at this point. Iraq War II, as Senator Bernie Sanders said in the debate a few weeks ago, while letting Joe Biden, one of its primary proponents, off the hook for it, was “a long time ago.” Actually, Senator, we still have troops there fighting Iraq War III 1/2 against what’s left of the ISIS insurgency, and our current government continues to threaten the launch of Iraq War IV against the very parties we fought the last two wars for. This would almost certainlythen lead to war with Iran.

The U.S.A. still has soldiers, marines and CIA spies in Syria, Afghanistan, Somalia, Libya, Mali, Tunisia, Niger, Nigeria, Chad and only God and Nick Turse know where else.

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Coronavirus: Ten Things to Think About, by Justin Pavoni

Any actual thinking, as opposed to feeling or reacting, about coronavirus is to be encouraged. From Justin Pavoni at ronpaulinstitute.org:

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1. All of this can be solved by following the voluntary principle: If you are worried then stay home. If you are willing to assume the risk then go to work. Going to work means you may interact with people and thus get sick. It’s a risk. The other people at work took on this risk of their own choosing too. Life is full of risks. Not going to work has its own obvious risks associated with it. Let people choose their own paths based on their own risk tolerance and voluntary choices. Don’t impose your view via government force on those of us that peacefully disagree with you.

2. There have been 23,000 US deaths so far this year due to flu, 3,000 from coronavirus. Worldwide stats are roughly in parallel. Legitimate population samples and common sense show that the virus has infected way more people than reported by the immoral news organizations that make money off this hysteria. It is highly likely that REAL death rates are closer to .05 percent rather than the oft-emphasized 3 percent.

3. Social Distancing makes people distrust one another. People that are afraid of each other are easier to control. We just had a house fire and while nobody will shake my hand because they’re afraid to death of coronavirus, they’ll happily walk around in the burned down home without a respirator. Of course the burned down house is far more likely to be an immediate and serious health threat. Anyone else see a problem here?

4. I have already seen certain local governments posting websites for all of us to tell on each other for congregating in groups. My wife has had skeptical posts removed from Facebook. Sounds a lot like the secret police to me.

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Day of Shame: US House Approves $2 Trillion Everything Bailout on a Voice Vote, by David Stockman

When historians look back, they may well pinpoint the $2 trillion bill and the Federal Reserve actions in response to the coronavirus outbreak as the inflection point when the US’s slide into bankruptcy accelerated. From David Stockman at davidstockmanscontracorner.com, via lewrockwell.com:

Did we say it’s getting stupid crazy down there in the Imperial City?

Well, we probably have….ad infinitum. And we are doing so again but not merely owing to today’s abomination in the once and former Peoples’ House, which thinks so little of its oath to defend the constitution and the rights of current and future taxpayers that it approved the $2 trillion Everything Bailout without even a roll call vote.

Then again, like the late night TV pitchman says – wait, there’s more!

Consider the chart below, which surely the Fed heads have not. To wit, it took the Fed 85 years after its doors opened in 1914 to print enough money to fund a $600 billion balance sheet.

It wasn’t exactly the Ohio State offense – three yards and a cloud of dust – which accomplished this. But it was pretty close – even including Greenspan’s first years at the helm. Between the famous Treasury Accord in 1951, under which the Fed was liberated from Treasury-ordered yield pegging, and 1999, its balance sheet grew at a modest 5.2% per annum.

And, by your way, the Fed’s relative stinginess with the printing press was a great big no nevermind. Real GDP grew at 3.4% per annum over that near half-century period, and real median family income more than doubled from $35,000 to $74,000.

We are pondering the number “$600 billion” today because its capsulizes the insanity loose in the Imperial City. What took 95 years to accomplish in the purportedly benighted 20th century, has now taken just five days!

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Estimates About the Collapse of Share Buybacks Emerge, by Wolf Richter

Corporate share buybacks support stock prices, and the value of executive stock options, often with borrowed money, and its all legal! This shell game may be coming to an end. From Wolf Richter at wolfstreet.com:

“The leveraged share buyback game has ended, which also means an end to the phony earnings growth.”

HSBC and Goldman Sachs have now both come out with estimates about the extent of the collapse of share buybacks. So far into this crash, over 50 companies have suspended share buybacks, accounting for $190 billion in cash that is not flowing into the stock market, representing over a quarter of total share buybacks in 2019.

HSBC estimates that over the next two quarters, share buybacks in the US could be cut by $300 billion, meaning $300 billion in “lost inflows” into the stock market.

And more cuts are coming. A note by Goldman Sachs analysts, reported by Bloomberg, added: “Reduced cash flows and select restrictions mandated as part of the Phase 3 fiscal legislation suggest more suspensions are likely.”

And slashing share buybacks would have an impact on stocks, the Goldman analysts said: “Higher volatility and lower equity valuations are among the likely consequences of reduced buybacks.”

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The ‘Small’ Business Administration is now bigger than Walmart, by Simon Black

The Small Business Administration has $350 billion burning a hole in its pocket. Get your share before its gone. From Simon Black at sovereignman.com:

As you’ve probably already heard, the US government unleashed a giant tsunami of money on Friday, passing a $2 trillion stimulus bill to help boost the economy during the Covid pandemic.

Let’s put that number in context:

  • $2 trillion is more than it cost to wage 18+ years of war in Afghanistan and Iraq.
  • It’s nearly THREE times the size of the bailout from 2008.
  • It exceeds ALL corporate and individual income tax revenue collected by the IRS last year

We are clearly living in unprecedented times… and that this bailout is equally unprecedented.

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Among the bailout’s many provisions (which go on for more than EIGHT HUNDRED pages!) is a whopping $350 billion to the Small Businesses Administration.

The Small Business Administration is ordinarily a tiny federal agency. But this funding exceeds the budgets of the Army and Navy COMBINED. It’s 8x the size of the United States Marine Corps. It’s more than the entire market capitalization of Walmart.

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P For Pandemic (Populist Rage), by Jim Quinn

Jim Quinn looks at disturbing scenarios of what’s to come in the future, and then even more disturbing scenarios. From Quinn at theburningplatform.com:

In Part One of this article I detailed the criminal enterprise that constitutes the leadership of this country. The facts are clear. We’ve been screwed over by those who were supposed to represent us. Now it is time to look in the mirror and decide whether we will continue to bow down before our keepers or step up and be accounted for in this coming fight.

Trayvon Martin Analysis: It's time for all Americans to look in ...

Corporate executives who recklessly loaded their companies with debt, while utilizing the proceeds to buy back their own stock, in order to boost their stock price and outrageous compensation packages, left their companies vulnerable to an entirely predictable downturn. After frittering trillions away on their overvalued stock, they now demand bailouts from the taxpayer, and their spineless captured congress lapdogs have obeyed their corporate masters. The 96 – 0 vote in the Senate is truly a disgusting example of the corporate fascist One Party system that reigns in the swamp. Corporate socialism is alive and well.

As this incomprehensible national shutdown extends into April, tens of thousands of small businesses will be forced to close their doors for good. Local restaurants, hair salons, delis, hardware stores, and thousands of other small businesses will be involuntarily shuttered for good.

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Trump, Putin Will Discuss The End Of U.S. Shale Oil, by Moon of Alabama

Trump is probably not going to be able to negotiate much of a cease fire with Vladimir Putin in Putin’s war on US shale oil. From Moon of Alabama at moonofalabama.org:

Three weeks ago, when the Russian and Saudi war on U.S. shale oil started, we wrote:

In the first week of January crude oil reached $69/bl but it has since dropped to $45/bl as the coronavirus crisis destroyed the global demand. The Saudis tried to make a deal with Russia, the second largest exporter after Saudi Arabia, to together cut oil production to keep the price up. But Russia rejected a new OPEC cut. It wants to keep its production up and it will use the crisis to further undermine U.S. oil fracking production. As the whole fracking boom in the U.S. is build on fraud the move might well be successful.

Russia does not have a budget deficit and is well positioned to survive lower crude oil prices without much damage. Saudi Arabia is not.

Only a week later oil was already at $30/barrel and we predicted that it would go down to $20/bl.

On Monday the U.S. WTI oil price index reached that mark. Oil prices in other places are falling even further:

Canadian heavy crude has become so cheap that the cost of shipping it to refineries exceeds the value of the oil itself, a situation that may result in even more oil-sands producers shutting operations.Western Canadian Select crude in Alberta dropped to a record-low close of $5.06 a barrel on Friday, according to Bloomberg data going back to 2008 …

The corona virus crisis has led to drop in global demand by some 20%. The world production and consumption in normal times was at about 100 million barrel per day. Consumption is now below 80 million bl/d. But after the OPEC+ agreement failed Saudi and Russia both started to pump as much as they could to regain market shares. Together they are increasing their production by some 3-4 million barrels per day. All that oil has to go somewhere.

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