Wednesday, April 10, 2013

Top N Reasons We’re Totally FUBAR

I’ve been mentally compiling a list of points of interest that I find particularly distressing for few years now but just decided to blog them in order to help discern a trend and possibly get a sense of where things are heading.

Unlike other Top-N lists, this list is a pretty free form and un-ordered though over time I hope to make it more organized.

1. Federal Reserve Chairman Ben Bernanke highlighting stock market gains as being a clear benefit and outcome of the Feds QE policy in his 2011 statement: "I do think that our policies have contributed to a stronger stock market, just as they did in March of 2009 … “.  While I don’t necessarily doubt his assertion, this type of statement offers a clear glimpse into both the extent to which the Fed currently operates as a central planner as well as to the magnitude of its bureaucratic conceit.

2. Trillion dollar federal deficits leading to over 100% debt-to-GDP with literally no possibility of bending the curve to insolvency (i.e. nominal GDP growing at an average annual rate of about 4.5% over the last 20 years while federal debt has and continues to grow at about 7.5% over the same period… pretty much says it all).  The numbers being as large as they are, the general population and media is predictably rife with nonsense with commentators routinely quoting wrong or misleading figures partly due to their own ignorance and partly due to a “Richie Rich” effect of sorts where at any moment nonsensical terms like “zillion” might fly right out of the mouths of those discussing federal budget issues without a single objection.

3. BitCoin in that as much as I think the idea is nothing short of fantastic, it CLEARLY is such a radical development that one has to take note of what it appears to indicate… a notable lack of confidence in fiat currency and of manipulative, fiscally profligate nation states.

4. 47 million American’s on Food Stamps which combined with the other “social safety net” policies are quickly placing the burden of providing basic goods and services for roughly half of all Americans on the back of the all current and generations of future taxpayers.

5. Paul Krugman and his ilk of Keynesian policy junkies that piously claim the ability to both determine every “problem” as well as submit for each (quite proudly) the typical statist solution.

6. Today’s On Point entitled “A Second Look at Capitalism” which I really can’t find words to describe other than to note that the sassy and effeminate guest intellectuals were both predictable and derivative.

7. The Occupy “Movement” (and other similar/associated fringe social phenomena) with its schizophrenic philosophy hybridization in which individuals spouting sometimes completely opposing ideas (Occupy Boston had “End the Fed” signs, “Stop Foreclosure Now” signs, community activists, union rabble and even scientologists in the same smarmy soup that was Dewey Square) somehow coexist and even find comfort in the very same filthy tents.

8. Antifragile by Nassim Taleb which is not just an excellent book, it provides (amongst many other interesting insights) one of the clearest explanations of the way in which strong central planning “fragilizes” a society.  Applying the simple linear rational process by which humans have achieved many great things in science and technology is an awful way to “manage” nonlinear and complex systems like the macro-economy yet we continue the march of policy blunders that, like failed forestry “management” (as if mother nature needed the help), will inevitably lead to an epic conflagration.

9. QE infinity, the ZIRP and the Feds balance sheet exploding by over a trillion as it hoards over 10% of all federal debt leading it to currently pump $40 billion monthly into the treasury (no “operation twist” as there are no more short T-bills… just pure bond purchases) and $45 billion monthly into Fannie/Freddie.  This is not just a problem because of the highly fictitious effects that all of this “easing” has on the economy/currency but also because this is the fullest expression of the Feds credibility.  Any additional “crisis” requiring emergency policy action would surely spark a loss of confidence and likely loss of control for the Fed.  There is currently no room for error.

10. The fact that probably 9 out of 10 Americans don’t have the slightest idea of the severity of the current situation… nuff said (for now).