Western Governments Cannot Escape Fiscal Disaster

The Wall Street Examiner’s Lee Adler, Russ Winter of Winter Watch, and Aaron Krowne of the Mortgage Lender Implode-o-meter focus their discussion this week on the fiscal disaster that is facing western governments not in the future, but now. There’s no way out.

Here’s what we covered in Part 1, free to all visitors:

  • Western governments hit irreparable fiscal situation due to exploding demographic time bomb
  • Why a Fed rate increase won’t matter, and why it will
  • The twin towering deficit inferno
  • The special interest political attack on the Fed and inflation



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Topics covered in Part 2 for Radio Free Wall Street subscribers only:

  • Tax data suggests disappearing corporate profits
  • What the single mortgage fraud prosecution reveals about whether the system can survive
  • The implications of the European debt crisis continuing to worsen because of government bailouts
  • The markets are heading for a crash– why and when?

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4 comments for “Western Governments Cannot Escape Fiscal Disaster

  1. Paul
    April 13, 2011 at 10:59 pm

    Very good broadcast this week, Guys. Really enjoyed it. (Much calmer, which to my ear is a good thing.) Thanks.

  2. Chauncey Gardiner
    April 14, 2011 at 10:16 am

    Lee, Russ and Aaron — Thank you for making the first portion of your podcast available.

    Russ asked, What will be the additional cost of further monetizing the budget and trade deficits going forward?”

    I would like to take a crack at responding to Russ’s question.

    Besides continuing devaluation of the US dollar, I expect other costs will include the hidden costs stemming from ongoing political extortion (i.e., …“We will collapse the financial system if you don’t do what we want.”), corruption and attendant renewals of their licenses to loot. [See: http://www.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411?page=3 ]

    As a subscriber to MMT (Modern Monetary Theory) put forward by courageous economists at the University of Missouri Kansas City (Interesting… that is Thomas Hoenig’s home turf, isn’t it?), the premise upon which that extortion is based is a non sequitur. Therefore, I have concluded the majority of pols are either ignorant (which I don’t believe to be the case given the typically high level of competence of their staffs), compliant – due to campaign financing considerations and/or intimidation (think about what happened to Russ Feingold and Alan Grayson – outspent 70:1), or complicit – due to resistance to change, benefiting from the status quo, or corruption.

    Policy limitations appear to me to be the level of $USD devaluation that Americans will willingly withstand, potential loss of global reserve currency status and the advantages that affords the U.S. elite and Godfather protection racket in purchasing oil and other commodities produced in other countries – although this may no longer be particularly relevant to them due to offshoring of U.S. manufacturing and for other reasons, and the aggregate amount of debt servicing that can be loaded onto the backs of future taxpayers in a debt-based monetary system without going “all-in Zimbabwe” and/or triggering blowback in the form of violent civil unrest.

    The American people have been deeply damaged by what has occurred. Besides globalization, it is time for an adult national conversation about our nation’s monetary system, whether to nationalize the Fed, whether to restructure the role of the Primary Dealers, and whether to materially reduce or eliminate the huge amounts of seigniorage flowing to privately owned entities and a few individuals.

    My own take is that our society and form of government cannot afford the economic damage they are causing us and hold together (Yes, besides the transfer of wealth and productive assets to themselves, I have considered the possibility that division and dissolution are in fact their further objectives on the road to to their ultimate goal: complete political control).

    Just my opinion. I would welcome others’ input. Thank you again.

  3. April 14, 2011 at 12:43 pm

    Thanks for your comments!

    I’m a numbers, nuts, and bolts guy. My brain just can’t do theory. My approach is to focus on the data and reach my own conclusions, unburdened by other people’s theories or any theories generally, other than the ones that have become true for me based on years of close observation.

    I limit my analysis to the things I see and understand and have proven to be true. I avoid trying to fit my observations into any theories other than the ones that arise from my direct observations. Trying to fit data to other people’s theories of how things should work runs the risk of becoming a religion, wherein everything you observe must fit the religious dogma.

    When you say “nationalizing” the Fed, since the Board of Governors is an Agency of the Federal Government, whose members are appointed by the President and confirmed by the Senate, and whose operations are mandated by Congressional legislation, I assume that you mean putting it under greater Congressional oversight. Since Congress is at least as big a problem as the Fed, I don’t see that as a solution. And this Administration reappointed Bernanke, and is therefore directly responsible for the Bernankicide that is killing millions of people around the world, and destroying the life savings of the elderly in the US. I don’t see putting the Fed under greater government control as a solution.

    We can’t have a conversation with the rapacious criminal corporatists who control the government. What we need is for things to get so bad that there’s a genuine populist uprising, and the emergence of a Teddy Roosevelt to lead the American people back from the wilderness.

    Problem is that if someone like that should arise, he will be killed by the establishment. I’m afraid it’s too late for all of us, and that the US is doomed. The American people are doomed. We should all escape from America and move to actual no-pretenses banana republics, where at least we’d harbor no illusions about equal rights and a level playing field.

  4. Chauncey Gardiner
    April 14, 2011 at 1:59 pm

    Thanks, Lee. Points well taken. I too am trying to see the reality through the fog of ideological dogma.

    Although that national conversation to which I pointed may never occur, I will continue to think about the Citizens United decision, the FRBNY (“first among equals”), the Fed’s true ownership, that of the IMF in Basel, their respective policy-making roles, and who really designs and orchestrates those policies through all the layers. Just like the theme song to the TV series “CSI”, “Who are You… Who?… Who?… I really want to know.”

    Reverse engineering/deconstruction of reality is very difficult; IMO that is by design. But I will continue to pay as much attention as I am able. As is the case with everyone else here, there are claims on one’s time that must be given some priority.

    I so appreciate your site and your response.

Comments are closed.