Denninger: Let’s Cut the Crap – We Are in a Depression Right Now
Karl Denninger of the Market Ticker asks How Long Before You Wake Up, Politicos?
So let’s cut the crap – we are in a Depression right now.Â We are pretending we are not, just like you can pretend you didn’t really lose your job so long as your credit card does not reach its limit.Â We have been in that depression for about 18 months and there is no evidence that we will exit it, as we have yet to find a way to pull back the deficit spending without an instantaneous collapse in the economy.
Yet at some point we must and will stop.Â We will either do so of our own volition, or we will do so when the cost of borrowing skyrockets, as others get tired of funding our profligacy.Â If we attempt to “print” our way out of it the cost of petroleum products will shoot the moon and destroy our economy anyway.
You haven’t seen the half of what happened though – not yet.Â It appears that AIG – the company we have bailed out (thus far) to the tune of some $100 billion plus, in fact isn’t done.Â It appears they may have written credit protection on Greece. If this allegation by the German equivalent to The New York Times is true Americans are going to be asked to pay billions of dollars – or more likely, hundreds of billions (since Greece is almost certainly not the only place – try Spain, Portugal, Ireland, etc) to bail out a bunch of FOREIGN NATIONS.
Do you both think Americans can and will pay that bill?Â A bill that has been forced on us, and yet benefits not The United States economy, but foreigners?
Wars – big wars – start over much less, my friends.
The PIIGS’ exposure (Portugal, Italy, Ireland, Greece, Spain) is somewhere in the area of $3 Trillion. Did AIG et. al. write credit protection on Greece and the rest of the PIIGS? If so, get ready for more printing, or will our government stand up and finally say that we are no longer going to bail out the TBTF’s? According to Ben Bernanke, we will no longer monetize debt, but does that mean the Federal Reserve will not use other methods to bail out big banks or insurance companies who backed bad debt?
If we have to print trillions more to bailout out foreign banks and countries, it will not bode well at home. According to Denninger:
To the politicians who are reading this, your Thorazine dosage needs adjustment as well.Â The math is irrefutable.Â If, in point of fact, AIG has entangled itself with the European Continent there is no escape from what is to come.Â There is only destruction, and our only two choices are to cause as much of it as we can to occur there, by pulling the plug on these clowns now, or risk a literal World War.Â We may get one anyway, but if we bring the bulk of the damage here we’ll be dealing with a civil collapse at the same time, and have no chance of being able to deal with the geopolitical implications. We must not allow that to happen.Â You must not allow that to happen.
It’s time to stop. Not because you want to, not because you fear us (even though you should – after all, we’re your employers and can fire you) but because if you don’t there won’t be a nation worth governing left.Â You know who the crooks are – including those among you.
As we come closer to what many believe will end with a total collapse of our economic system, analysts and bloggers have been writing more and more about the response of federal and local law enforcement in the event of civil unrest and lawlessness. Mr. Denninger suggests that when it really hits the fan, federal law enforcement will not come to the aid of their local colleagues:
If it gets bad, and I believe both history and the math says it will, who’s going to help you?Â Do you really think the entirety of the 150,000 Federal Officers will come to your aid?Â Or will they sit in Washington DC and in their big black Suburbans (armored, of course) issuing orders for you to go into the streets in your (unarmored) Crown Vics and die in their place?Â Remember that the “bad guys” in such a circumstance outnumber you 10 or even 20:1 and not only are they probably armed as well as you are, they’ve actually shot – offensively – at other human beings.Â Unless you’re one of the “bad cops” you’ve never done that, and few of you have had to fire in self-defense.Â Your only realistic advantage in such a situation is that most of the gangbangers are pretty poor marksman.
Do not underestimate the power of panic, especially if local law enforcement personnel choose to head home to protect their own families if the SHTF.
Karl Denninger discusses a host of issues related to the financial crisis, domestic law enforcement, and the coming fallout in his article How Long Before You Wake Up, Politicos? and we highly recommend you give it a read in its entirety.
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Date: February 27th, 2010
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