Thursday, December 17, 2009

The Next Bigger Crisis is Upon Us.

Once again, the U.S. has reached the debt ceiling, and one wonders-really tries to even conceive- if Congress avoids caving. In truth, they already have, with rumblings about tacking on a measly one hundred and fifty billion dollars via accounting trickery in order to avoid a scenario where government obligations, such as social security, to name just one, are postponed, if not entirely reneged on.

We are setting up for a real donnybrook where all sorts of groups and entities have an absolute tizzy as some very messy merde hits the proverbial fan with the setting on high. Going forward, some small number of legislators will insist, as they contemplate such things as spiking bond prices and/or a collapsing currency, that the U.S. cease and desist from more debt ceiling height expansions which necessitate ever more unprecedented government reliance on borrowing at the perilously short end of the yield curve. Others, contemplating the anguished cries of constituents who rely on government largess to make ends meet, will insist that the debt ceiling be raised come hell or high water.

In the meantime, there are certain expenditures that are clearly so sacred, i.e. the euphemistically labeled defense spending, more properly seen these days as money spent in support of international drug racketeering, that they will not be touched until just about every other option is exploited, or if you prefer, thrown under the bus. And, of course, it goes without saying, that the U.S. economy is still in intensive care, and should the transfusions of Quantitative Easing be cut off for any extended period, it will be right back in critical care. Vegas should have odds on the outcome of this one, but the chequered gambling outfits in the city in the Nevada desert have little or no imagination where such epic happenings are concerned.

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