Replies to post #30132 on Zeev's Turnips Talk Politics (ZTTP)

[SoxFan]

Speaking of foreign debt I can't imagine how one could reasonably defend our Presidents spending. I didn't realize that our President has never vetoed a spending bill:

UNCOMPREHENDING DISBELIEF
By the Mogambo Guru

The Fed, the Treasury and their willing co-conspirators
have all suddenly waded much deeper into the swamp of
monetary irresponsibility. The latest reports indicate that
they are still there, wading around in fetid and feculent
water up to their noses, but seem to be enjoying themselves
immensely.

For example, let's saunter over to the government debt area
and ponder the news that John Snow's Treasury borrowed
another $38 billion in one lousy freaking week! One week!
One! That's thirty billion, plus another eight billion, for
a total of thirty-eight billion dollars, in five business
days! If I was a Southern Belle instead of the Manly
Mogambo, I would surely catch the vapors at the news, and
would raise the back of my hand to my forehead as I gently
swooned, crying "Oooooh! Surely we are undone!" with a
voice that dripped honey, with an accent thick as molasses
and twice as sweet. But, of course, being the Mogambo, I
stomp around the house fully armed in a state of terror
mixed with anger, and just a touch of vengeful hatred for
piquancy, dressed in full-body armor, psyching myself up
for the assault by the government goon squad, which I
figure is probably pulling up in the driveway right about,
oh, now.

Like a little kid with a new toy, I think that I am getting
the hang of using a calculator and would like to, you know,
show off a little bit, so I had an interesting session with
a calculator. But for some strange reason, whenever I
multiplied $38 billion a week times 52 weeks in a year, I
got a wrong answer. Guess what I got? I know you are going
to laugh when you see it, and remember that the calculator
was obviously broken, as I kept getting the answer $1.976
trillion!

Seeing a number that huge is like getting hit with a
sledgehammer to the skull, as you realize that no sane
person would voluntarily plunge his own country farther
into debt at that rate - and I am talking about amassing
debt to the tune of 20% of GDP here! - so that is when I
realized that the calculator was obviously broken.

And then, and this is the really weird part, not wanting to
waste this opportunity for fame and glory, and maybe a
little interest from pretty girls would be a nice touch,
but I get up and start rummaging around in the house for
another calculator, and whenever I found one, I would, with
a single-mindedness and focus rarely found outside of the
chronically mentally ill, again enter those same two
numbers, and I would always get that same wrong number!
After this happened four times in a row, a little light
bulb went on over my head, and I said to myself "Hey,
doofus! All the calculators in the house are broken!" All
of them! I mean, don't you think this is weird, weird,
weird?

Anyway, the point is that all those calculators broke the
exact same way, and at the exact same time, and whenever
you multiply $38 billion dollars in one week times 52 weeks
in a year, every last one of those calculators all give the
ridiculous answer of $1,976 billion, which is $1.976
trillion. Dollars! In one year! Hahahaha!

And that comes to $7,057 for every man, woman and child in
the country. Every living being in the nation is being
plunged into more debt at an annual rate of $7,057. So if
you are a family of four, meaning you, your spouse and your
two charming children, then your total indebtedness is
increasing at a rate that would equal $28,228 a year. Nice
going!

But, and I find this hard to believe, no matter how hard I
rub my eyes, it never goes away, the really interesting
part is that the Congress, and this is one for the books,
just passed the Prescription Drug Welfare Plan, or whatever
it is called. Which is not even a temporary stimulus bill
in the usual sense, but a gigantic new permanent
entitlement, described by some as "the most sweeping
expansion of the Medicare system since its inception."
Hell, even the most wild-eyed, goofy optimists admit it
will cost $40 billion a year forever! And by "forever" I
mean "never," as this is just the start of a long, long and
expensive, expensive road, and we have many, many layers of
hell to transcend before we reach The Final Cost.

And then I look at the short one-year time frame wherein
all this borrowing would be taking place. And then I look
at the $7,057 per man, woman and child in the country. And
then I look at the one-year time frame. And then I look at
the money. And then at the time. The money. The time.
Money. Time. Money. Time.

Suddenly overcome by a dizziness that appeared out of
nowhere, I try and gather my senses, and I happen to notice
that a nice chunk of the money, which bought all that new
debt, came from foreigners with deposits at the Fed. And
when I try and imagine who the people are that decided to
buy that much U.S. debt, and who were so confident in
themselves that they are apparently not the least bit timid
or embarrassed to use $12 billion of their valuable money
to buy U.S. debt, which is denominated in the dollar, which
is a depreciating currency, meaning that it is not as
valuable as it was yesterday, and one that will be even
less valuable tomorrow and for many, many more tomorrows, I
am struck by the realization that these self-same foreign
morons are making a huge, I mean huuuuuuuuge, mistake.

Imagine that we turn on the TV, snuggling down in the sofa,
and are looking in on an episode of Jackie Gleason and the
Honeymooners. The scene opens with Ralph Kramden, entering
stage left, who just came home from his job of driving a
city bus. Throwing his jacket on the chair, he announces to
his wife Alice, played by Jerry Mathers, oops, I mean
Audrey Meadows, "Well, dear, I made a gigantic investment
in a debt asset today! I am proud to say that it is one
that is grossly overpriced, and so it already yields less
than the rate of inflation, which is good, because I want
to get away from that inflation stuff! And it is
denominated in a currency that is going down in relation to
ours, which I am told is a really classy move! So that in
the future when we cash it in to pay for golden years, we
will almost certainly get back less than we put in, in
terms of purchasing power!"

Now, being a real stupid guy myself, I am very familiar
with the scent of stupidity, and my sensitive nose - sniff,
sniff! - detects one that is particularly ripe. But it is
the look of stupefied, uncomprehending disbelief in Alice's
face that gets all the laughs.


Regards,

The Mogambo Guru
For the Daily Reckoning

P.S. As Doug Noland reports, "foreign issuers of dollar-
denominated debt continue to revel in unprecedented global
dollar liquidity." Hey! Maybe those doofus foreigners are
smarter than we thought! Borrow valuable dollars, with the
promise to pay back worthless dollars in the future!

But foreigners are not the only ones at that game.
Bloomberg figures almost $23 billion of corporate bonds
were issued this week, "one of the strongest weeks of the
year and the most in two months." Not to be outdone, "Year-
to-date junk bond flows of $25 billion are easily a new
record." And we already looked into the Treasury doing it,
too.

---Mogambo Sez: This is all insane, as I have read many
things about economics off and on through the years, and a
program to print money to finance borrow-and-spend
consumerism is pure lunacy.

And just because I can't remember the last time that I ever
heard of a lunatic's ideas working out, doesn't mean that
lunatics don't have a contribution to make on the altar of
diversity-for-diversity's sake. But, and you can't help but
notice, that they were also the ones who said that gold was
a barbarous relic, and which had no value. And now gold is
the best-performing asset for the last five years running!
Makes you scratch your chin and say "hmmmm" about all the
other things that they say, doesn't it?


Editor's note: Richard Daughty is general partner and
C.O.O. for Smith Consultant Group, serving the financial
and medical communities, and the editor of the Mogambo Guru
economic newsletter, an avocational exercise the better to
heap disrespect on those who desperately deserve it. The
Mogambo Guru is quoted frequently in Barron's, The Daily
Reckoning, and other fine publications. If you're inclined
to read more, you'll find the whole Mogambo here:

Pondering a Hopeless Predicament
http://www.dailyreckoning.com/body_headline.cfm?id=3581

[Amaunet]

Your guess is probably right, however, Russian traditions are different. Russia could cede its sovereignty but this would not be a total relinquishment in this case.

Certainly other reasons were involved such as Negev, Murmansk and yes probably many factors we will never know.

Would an American company possess a record of service to the party, enjoy strong voter support or at the very least, possess skills needed by the party?

This is just not selling votes on a specific piece of legislation but rather any key legislation relating to the national interest, security, whatever. While there are similarities between systems there seems less of a safety valve in the Russian structure.

Khodorkovsky was preparing to spend $100 million to win a large bloc of seats in Duma elections next month and eventually to run for the presidency himself.

Mikhail B. Khodorkovsky, sought a meeting with the new national security adviser, Condoleezza Rice. According to a former staff member, National Security Council analysts were asked to perform a background check.

Mr. Khodorkovsky did not get the meeting — part of the tycoon's efforts to secure approval from the American establishment — because of "allegations of past business improprieties," the former staff member said, also noting that Mr. Khodorkovsky spent heavily in Washington to court the Capitol's inner circle.

But Mr. Khodorkovsky's steady efforts to win access to other influential Americans have paid off. Last July, he met with Energy Secretary Spencer Abraham to discuss America's oil policy. Former President George H. W. Bush traveled to Russia in September and spoke at a dinner attended by Mr. Khodorkovsky.

That event prompted Moscow newspapers to speculate that the visit was part of an effort by American companies to secure a merger with Yukos Oil, where Mr. Khodorkovsky was chief executive until he quit on Monday in a swirl of fraud and embezzlement charges. His replacement, a Russian-born American, was confirmed yesterday. [Page A10.]

The Carlyle Group, an investment bank that retained the elder Mr. Bush as an adviser until a few weeks ago, has a close business relationship with Mr. Khodorkovsky. Although Mr. Bush was in Russia as a Carlyle representative, the bank said, his visit had nothing to do with oil deals and he did not meet privately with Mr. Khodorkovsky.

The Carlyle Group is composed of former world leaders and Washington insiders who are making billions in the war on terrorism. “In running what its own marketing literature spookily calls ‘a vast, interlocking, global network of businesses and investment professionals’ that operates within the so-called iron triangle of industry, government, and the military, the Carlyle Group leaves itself open to any number of conflicts of interest and stunning ironies.”

Given that Russian traditions are different, the pipelines, etc., the attempt to by an excessive amount of Duma seats and turn them over to a foreign company, the association with the Carlyle Group, and so forth....well yeah, I think the guy was up to something.

[CoalTrain]

I dont understand how you buy the seat or buy the person etc etc or if exxon bought yukos then mobil would have seats in the Dumas. the Japanese in 1998 controlled 28% of all the US treasury bonds in the world. but they did not control the economy of the US.

You sure don't know much about the Bond Market or the world economy. THe Japanese don't control our economy? ROTFLMAO. IF the Japanese start dumping U.S. Government Debt in a big way it might have a bigger effect on the dollar, the stock market and economy than any other single factor since 1998.


Over 30% of all US businesses are foreign owned. maybe they do control the economy , who knows:

Can you spell LIKKUD?


We cant even manufacture the steel for an Abrams tank in the US because our economy has bankrupted all the big steel stamping plants and I think that this is a problem

Interesting observation. The last time I can think of that something like this happened was during WW2. Alcoa was selling Aluminum to the Germans ( via I.G. Farben, I believe this was via Sweden as to not be so obvious ) to make planes when we needed that aluminum for the same purpose. Go to a search engine and type in Alcoa farben and see what you find.


the whole point for a legislature is that it is composed of multiple competing interests. For every congressman that is bought by an Oil company there is one that fights for gay rights.

ROTFLMAO. Which Oligarch is it in Russia that is buying seats in the DUMA to protect gay rights?


I do not think that giving money to the Dumas makes it into your baby. If the entire Russian system is so weak that having an American corporation own part of their economy that they had to jail the owner of a company, like the FBI jailing Gates because his software was on too many govt computers, then Russia can not survive.

If they allow the U.S. to take control over the Oil in the Caspian Sea Russia will not survive. Thats why the Russians helped Saddam Jam our smart bomb signals. It is the reason that the Russians are going to continue to help the Iraqi's. It is also the reason that the Russians are willing to go to war with the U.S. Unfortunately the Hawks in the U.S. were to stupid to realize the significance of this. The LIKKUDniks however are VERY aware of this IMO.

CT