Posted on 06/07/2010 7:14:48 AM PDT by blam
The "Discrimen" Of Change Is Near, As The Bernanke-Geithner-Keynes-Japanese Experiment Comes To An End
Keith McCullough, Hedgeye
Jun. 7, 2010, 10:00 AM
“I will either find a way, or make one.”
-Hannibal
One of our most successful European clients recently sent me a book that I can’t put down: Tom Holland’s “Rubicon – The Last Years of The Roman Republic.” As a behavioral study, the parallels of power and politics between then and now are interesting to consider.
The Rubicon is the river in northern Italy that Julius Caesar infamously crossed in 49BC to officially declare what was considered the unthinkable – war against the Perceived Wisdoms of officialdom in Rome.
Holland captures the moment ominously: “Gaius Julius Caesar instead gazed into the turbid waters of the Rubicon, and said nothing. And his mind moved upon silence. The Romans had a word for such a moment. “Discrimen,” they called it – an instant of perilous and excruciating tension.”
Whether it was how you felt at 830AM Friday morning when you saw the US Government’s employment report or how you’ve been feeling for the last 3 years in trying to manage the market risks associated with US Government Sponsored Volatility, “The Discrimen” summarizes both, across durations – the turning point.
The Discrimen for the heavy hand of Big Keynesian Deficit Spending and Debt Financing has reached the proverbial Rubicon of economic debates. Not unlike the legendary Rome that Holland depicts in 140BC, the blood, sweat, and tears of the United States of America still stands on the principles of meritocracy, liberty, and competition. Whether the willfully blind realize it yet or not, Americans will find a way to make this economy American again.
[snip]
(Excerpt) Read more at businessinsider.com ...
The Federal Reserve is a Progressive experiment that needs to end.
The Federal Reserve and Central Banks are key pillars for Big Gov’t and the entitlement state. Kill the Fed, and you not only end bubble-blowing, too big to fail and crony capitalism, you will also, by default, end many other ills that depend on the entitlement state - such as illegal immigration.
I know little about economics. I do know I can not spend what I do not have for long without something bad happening.
This is as true for a Government as it is for an individual.
While a government can print more money, or it can manipulate the system, it can not change basic economic laws. The best government can do is “kick the can” further down the street.
This is what policticians have been doing for a hundred years. Well we all know the end of the street is the Grand Canyon and soon we will be going over the cliff.
You would think after 10,000 years of civilation we would have learned our lesson.
Perhaps 5,000 years from now there will be historians writing about the rise and fall of the United States. Just think people, we are living in historic times. Not as much an honor as I would thought it would be.
As much as big government needs to end, it will instead find a way to get bigger.
The main difference between you spending beyond your means and the government is that you only hurt yourself. The government hurts the whole country. I’m sure I’m not telling you something you don’t know.
The other thing that is different is that you care about your family. The government doesn’t care about you.
there were bubbles, crony capitalism and too big to fail (by other names) long before there were central banks
“Americans will find a way to make this economy American again. “
Or we might spend the next 70 years in the wilderness...
The other lesson is don’t get entangled into wars unless it is in our vital interests. Wars do not start immediately but its seeds are sown many decades prior. Example is our tendency to interject into the internal affairs of other countries. Granted it is our opinions and standards, but the receiving country also reacts wondering is this constructive criticism or attempts to undermind it. Once these war breakout, especially in the 21st Century, the enemy will not line up their tanks and forces for our air power to bomb. Instead they will melt into the population and carry out insurgencies against our forces moving in or worst support assymmetric warfare putting our society at edge and force us to spend huge amounts of money to be domestically secured. Our founding fathers want us to be the shining city on the hill, a new world for the old world to consider. Our founding fathers never said the US should be the leader of the free world (Pres Wilson invented that notion) and use that as justification to be policeman/lecuturer of the world.
Really? give us some examples. Make sure they are systemic, economy-wide bubbles and not just industries dying or certain businesses making mistakes and going away.
Also, you want to explain how “too big to fail” could occur without government involvement?
My point was that economic 101 is not that difficult.
It is as true for a government as it is for an individual. The only difference is the number of people that will be hurt when the house of cards comes down.
Wishful thinking. We have had 100+ years of "Progressive" policies leading to nothing but misery and death and they still don't get it.
The Liberals will just do what they always do when their policies fail, just convince themselves (and others) that this time will be different because last time...
1) The right people were not in charge, but the new leader is so much smarter and/or less corrupt than anyone that has tried and failed before, therefore he/she/it will make it work this time!
2) We just didn't spend enough money if we only spend more and spend it sooner…
3) It's whatever Emmanuel Goldstein they can find fault for opposing and turning people against them.
Never forget one of the lessons learned from the Iliad given so eloquently by Agamemnon. When a nation has poor leaders the people of that nation will suffer.
“...there were bubbles, crony capitalism and too big to fail (by other names) long before there were central banks..”
Yes - but in our country today, which institution is behind these?
Read “The Panic of 1907” to see all of the above.
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