Ironically, nobody is investigating the shadowy cabal who is actually responsible, which is sad, because it'd be a very eco-friendly investigation, since most of the conspirators are in easy Nissan Leaf-range of the Justice Department offices.
See, when you churn out freshly-printed dollars at a brisker clip than P&G churns out Charmin, then those dollars become worth less, eventually reaching the point where the space between those two words is no longer needed:
It's not just gas prices, it's everything. Things aren't actually getting more expensive, the dollar is just losing value. It never ceases to amaze me how many people simply do not understand this.I've said it before, and I'll say it again: Complaining about rising prices is like standing on the deck of the Titanic and yelling that the sea level is rising. The sheer, staggering amount of debt and the astonishing rate at which we are racking up more is making the situation different not just quantitatively, but qualitatively than anything ever experienced by this country before. (And don't give me that "corporate welfare" and "tax the rich" class warfare nonsense: You could seize every penny of profit from every corporation in the US and siphon every millionaire's bank account dry and it wouldn't cover our bar tab for a year, not to mention pay the bills of all the incipient geezers who'll be sticking their hands out in the next decade.)
Meanwhile, China has bought more new cars than the U.S. for the second year running, and more and more Indians can afford cars, so there's more competition for oil and other raw materials from people in countries that aren't actively hostile to business and industry. Finally, there's always the chance of disruptions in the Middle East spreading to someplace where we actually do buy oil, rather than just Libya, whose oil mostly goes in the gas tanks of Renaults and Fiats. Interesting times indeed...
Complaining about rising prices is like standing on the deck of the Titanic and yelling that the sea level is rising.
ReplyDeleteHa! Just like Al Gore warned us!
And just what solution for high fuel prices does our illustrious incompetent currently residing at 1600 Pennsylvania Avenue offer?
ReplyDeleteRenewable energy!
01-20-2013: The End of an Error
Aw, now, Tam, you oughta know better than to bring facts and reality into the world of Obamatalk.
ReplyDeleteArguing such facts with the Obamaphiles, it appears that the solution is to raise taxes on the rich and the evil corporations.
Asking how an additional income of some $160 billion will deal with a deficit of $1.65 trillion brings blank looks.
Coupling that with punishing the evil speculators will then give us a nice, safe, warm and cuddly world.
As gasoline goes on toward $5 and $6...
Barry:"Look! Over there! *points* A crook!" Classic outsourcing of blame. Spin, deflect, repeat. Kung-fu progressives.
ReplyDeleteWV:disoff. Taptap, no, it seems to be working.
someplace where we actually do buy oil, rather than just Libya, whose oil mostly goes in the gas tanks of Renaults and Fiats.
ReplyDeleteDoesn't matter who buys from Libya. Oil's fungible and demand is relatively inelastic. Cutting off A's supply to B affects C's dealings with D the same way as if you shovel water out of a swimming pool, it doesn't make a hole.
Meanwhile, the GOP continues to lack any kind of spine.
ReplyDeleteWill there ever be someone worthy of my vote in my lifetime again?
No
ReplyDeleteTango Juliet: I've decided to pin my Ron Paul Futile Fervor on Gary Johnson this go around.
ReplyDeleteI think the Media is going to push Donald Chump, because he's a crappy, idiotic candidate, and with his money that he'll be bending towards his campaign, it'll be pretty easy to make that look almost natural.
http://blogs.abcnews.com/thenote/2011/04/gary-johnson-from-obscurity-to-prominence-in-new-hampshire.html (Warning, automatic video play.)
I've stopped reading the news except second hand through blogs like this one.
ReplyDeleteMy children were growing alarmed at my shouting "make the stupid stop" while curled up on the couch
Is there anything this administration as done that a ComIntern Cell would do differently?
ReplyDeleteGoal of both: The destruction of the USA.
If you'll excuse me I've canned food and ammo to buy.
Great analysis of the problem.
ReplyDeleteNow what?
The average american can't understand the reality which is why we are in this boat.
So what to do, what to do?
I am saving a lot, investing heavily, making large capital purchases now and preparing for hyper inflation. I view the collapse is far closer than most take it for. We just need a trigger event.
What about you?
Anonymous at 10.37 a.m.: You're dead right. My SWAG (scientific wild-assed guess) is that it's going to hit us by not later than the end of 2012 - but it could be much earlier. I wrote about it a couple of days ago on my blog:
ReplyDeletehttp://preview.tinyurl.com/3pnk6k9
http://preview.tinyurl.com/434b73a
Actually, we do use Libyan oil in a sense.
ReplyDeleteAll oil gets dumped into a common tank called the world oil supply. If Libya shorts it's contribution, France or Germany have to compete with us for low sulfur crude from Angola, Bunker C from Venezuela, light sweet from Texas or Louisiana.
All shortages of oil anywhere push up the price everywhere. And, as you've pointed out, there are countries whose currency or valuable exports increasingly are more palatable than ours.
The Brits eliminated the tax breaks for windpower when they discovered the payback time was 150years.
Simple solar only works well in the desert, with concommitant transmission losses while shipping it elsewhere.
Photovoltaics are wildly more expensive than petroleum products, produce massive pollution during their production, and lose 50% of their efficiency in just 10 years.
Just about any river that could be dammed for hydroelectric was, between 1920 and 1970, excepting only Brazil and China, and they're about done with cost effective builds. With the siltation problems common to older dams, the world will be losing net hydroelectric power over the next 20 years.
Not that the two decade figure is particularly relevant, as most of the economic types look for the crash later this decade. Social Security already pays out more than it takes in, something that wasn't supposed to happen until 2019, and the "assets" it supposedly has are IOU's the Federal government can never repay without debasing the currency to Weimar-grade toilet paper.
Buy primers and .22 rimfire. Great trading stock.
Eat more canned goods, especially meat, and set up a rotation cycle with as many months buffered inbetween purchase and usage as possible.
Other than that, hold on tight. We're way behind the power curve, and there's not much anybody can do to pull out of the dive.
It is trite to point out that socialists believe that the laws of economics, like The Law in general, can be made to say whatever serves their purpose.
ReplyDeleteIronic that His Imperial Majesty made reference to ordering the tide to recede, eh?
WV: powerusa.
Name a thing that doesn't take more dollars to buy than it did five years ago.
ReplyDeleteAnd the problem had already been dealt with politically, elections are irrelevant to economics now and probably have been since 1933. Every time we have faced this problem since 1933- and by we I mean human beings- monetization and destruction of currency value has won.
Excellent post Tam, and on the money (so to speak)... Thanks!
ReplyDeleteWe are way past the point of "now what?" or having the cavalry ride in to save the day.
ReplyDeleteCompound interest is great when it's in your favor... not so much when it's against you. Heck, were not even making the minimum payment!
The math never lies.
Now what's on TV?
Name a thing that doesn't take more dollars to buy than it did five years ago.
ReplyDeleteA 2006 model year car.
(Note: I actually do know a guy who bought a vehicle new and sold it several years later for more than what he paid for it - but considering this was in the stagflation era of the 80s, that's not too surprising)
One of the things that now cost much, much less than they did only a few years ago are luxury electronics. How much was a 20-gig jump drive 10 years ago? Oh, right, they didn't exist. How about 5 years ago? Or even 2 years ago. Computer memory is one of the few things I can think of that has dropped almost exponentially in price, while performance keeps going up.
ReplyDeleteThat said, I'll completely agree with the main point. Inflation penalizes virtue. Those who have paid off their houses and are out of debt, and those who have put money into saving and retirement will be massively penalized by the inflation of the fiat dollars being pumped into the economy. While we are being punished for our virtues, others are being rewarded for their vices.
As far as I can see, the best way to beat hyper-inflation is to go massively into debt at today's government-subsidized-low-interest rates, and then pay it off with ridiculously-inflated dollars. I only wish I were evil enough to hock my conscience and do it. Instead, I'll continue to be a wage-earning idiot, the ones the dot-gov comes for FIRST when looking for tax revenue...we're such easy targets.
"We are way past the point of "now what?" or having the cavalry ride in to save the day."
ReplyDeleteThe sad thing is, we're not really past the point of no return. We're not really even to the point of needing anything hugely drastic.
This link
http://crfb.org/stabilizethedebt/
is a federal budget simulator. You can tweak spending and tax policy, with the goal of stabilizing long term debt at 60% of GDP.
60% of GDP is a sustainable number - if our total debt was just 60% of our total annual income, we'd be in reasonably reasonable shape.
Go try the budget simulator. Just some fairly reasonable tweaks... raise the retirement age a bit here, cut Medicare spending a bit there... and you see that these problems are actually fixable.
The real problem isn't the math of the budget. It's that 90% of the country is acting like there's no problem at all, and 10% of the country is acting like it's hopeless. If just 51% of us could have a realistic view of the problem and the potential solutions, we could take care of this. I'm not holding my breath, though....
Alath
Carmel IN
We ARE living in "Interesting Times", yes, indeed we are.
ReplyDeleteGot Ammo?
"...when you churn out freshly-printed dollars at a brisker clip than P&G churns out Charmin..."
ReplyDeleteThats beautiful, man...I mean ma'am.
And of course soon the Charmin will be the more valuable commodity. I've got customers clamoring for Silver Eagles and 90% coins at double the price from a month ago. No telling where that's going, but it's a pretty sobering commentary.
AT
Alath, add in the state debts, which inevitably the Feds will end up "paying" through subsidies, and we are up around 170% of GDP.
ReplyDeleteThrow in the bailouts inevitable with our present ruling cabal of Wall Street gamblers, union bosses, big business honchos and self-serving bureaucrats, and I still think a case of Spam or Yoder's bacon will be worth a lot more in a few years than it's purchase price today.
Alath- I agree, had we begun doing those things a number of years ago we'd probably be fine. But if you look at the time frame that most of those reductions factor... I personally don't think it is realistic. Factor in the economic impact of the Japanese crisis and ME unrest... Not to mention the fact the our political class is too cowardly to even address serious solutions. That's where my comment/current thought process is.
ReplyDeleteBest.
Blackwing1,
ReplyDelete"Computer memory is one of the few things I can think of that has dropped almost exponentially in price, while performance keeps going up."
I'd imagine, although I'm lost at high finance, that the cost of consumer electronics is a symptom of the whole thing. The whole front end of that supply chain, from raw materials to labor costs, is denominated in a heavily-manipulated currency whose manipulators have inadvertently shackled themselves to the dollar.
I wonder... If they thought they could keep employment rates above riots-in-the-streets levels in Shanghai without selling electronics in LA, would an iPad go for 2k USD?
Alath,
ReplyDelete"The real problem isn't the math of the budget. It's that 90% of the country is acting like there's no problem at all, and 10% of the country is acting like it's hopeless. If just 51% of us could have a realistic view of the problem and the potential solutions..."
The reason that 10% think it's hopeless is because 90% think there isn't a problem (and 51% want to make it go away by slashing his XXXX while leaving my YYYY intact...)
And the gas-price-problem is exasperated by Obama and previous presidents prohibiting as much domestic production as they can get away with.
ReplyDeleteIt is impossible to raise more in taxes than the government can spend.
And did you see this? Congress specifically de-funded 4 czar positions, and Obama signed the bill into law and said Screw You, My Campaign Promise, And The Law I Just Signed.
http://www.thenewamerican.com/usnews/politics/7155-obama-decides-to-break-law-on-qczarsq-violate-constitution.
The reason that 10% think it's hopeless is because 90% think there isn't a problem (and 51% want to make it go away by slashing his XXXX while leaving my YYYY intact...)
ReplyDeleteAdvantage of being an anarchist: I have no sacred cows. Gut and gore every program, sez I.
It's deficit elimination and a balanced budget you want? You shoulda said so. It's easy:
ReplyDelete1.) Immediate and concentrated domestic oil production. Yes, ANWR and new deepwater sources are years away from the pump, but just a massive commitment to production would have an immediate and drastic downward effect on current prices. And let's face it, if the group that feels that the potential for scarring Mother Earth supercedes sustenance for humans wins that argument? Then, well...they'd be proven right wouldn't they?
2.) Immediate optional cash-out of any worker's Socialist Security contributions, with interest. I'm one of Tam's "incipient geezers" who have been led to believe there will still be gold at the end of the rainbow when we get there, and I'd grab the cash so fast it'd make old Roosie spin in his grave. Do you doubt approximately 100% of those younger than me would do the same? And there'd be a good chunk of veteran geezers who've already eaten half their pie that would take what's left in a single payment, too. And don't even start with the "What about my employer's contributions?" Shut the fuck up; that dough's been gone since the day it was paid (before, actually as we are talking about smoke, mirrors, and deficit spending)...and besides, what's the alternative? Anybody that believes that little pyramid scheme won't have long crashed before incipients like me see anything approaching our "investment"? Let me talk to you about some waterfront Florida property...
3.) Legalize and tax pot. Let's see...generate billions in immediate revenue, empty about half the population of US jails with huge resultant savings, put a whole violent, cancerous, illegal shadow industry out of business on the southern border, and probably drastically reduce hard drug addiction and alcoholism as a nice side bonus.
So what party is going to embrace this little three-legged stool of energy and economic recovery, independence, and renewed productivity? Right.
AT
Wow, i can't follow a link like that one to correia again. The jackass statists and leftards starting showing up, and it triggered my teutonic urge to extinguish people.
ReplyDeleteJayson, yep. I had another post two days later just responding to the wingnuts. You can see from the comments why they stick to personal attacks and dismissing your agrument rather than debating. Because when they stick around to debate, they start to look really absurd.
ReplyDeleteAT: The problem with #2 is that it won't work. Since we are talking about smoke, mirrors, and deficit spending, the money you (and I) have paid in has been gone since before the day it was paid, too. The "assets" socialist security has consist of IOU's, which are backed by IOU's, which are backed by the IOU's that they're backing. The money the .gov has taken from us since the day we started working has gone to pay other people from day one.
ReplyDeleteThey'd have to keep taxing you and me for the rest of our lives in order to cover the payoff for the people that are already collecting.
Jake: Correct, current payouts are all deficit spending. So too would be the lump-sum buyouts. Difference is the former goes on forever (or until bankruptcy/armageddon), and the latter reduce future borrowing which only pays interest on past borrowing. Kinda like prepaying actual principle on your mortgage on which you had been stupid enough to make interest-only payments with a negative amortization.
ReplyDeleteWell over half of the national budget goes to this giant dole. If half of that is converted to one-time buyouts, that cuts future payments by an order of magnitude, and when combined with the (huge) revenues generated and saved with the other two legs of the stool, the plan would not only work, but would probably completely eliminate the deficit and create a surplus (tax cut!) in a matter of less than a decade.
But, yeah...not even The Donald could see and sell the art of that deal. So we're fucked; we'll work and pay into the abyss until we die...and then our kids will take over the payments.
AT
Yes, ANWR and new deepwater sources are years away from the pump,
ReplyDeleteWhich is the excuse we've been hearing for years why it's pointless to exploit those resources. Had Obama authorized drilling on inauguration we'd been seeing the results by now.
Something to bear in mind the next time a leftard makes that argument.
I'm with perlhaqr, throwing the Ron Paul Futile Fervor (good line, that) behind Gary Johnson. I expect it to end, however, in the Fred Thompson Memorial String of Expletives.
ReplyDeleteWV: prers. Yep, gonna need some prers to get through this'n. Prers, canned cream corn, and amma'nition.
Larry, it was interesting to see how the leftards couldn't wrap their brains around the fact that you work semi-for the government and want the government to cut spending. You would think you had divided by zero and blew their damn minds after which they instinctively attacked like drone insects.
ReplyDeleteThey also couldn't understand how having desired skill sets means that if the contract or job goes away you could (*gasp!*) go work somewhere else. These things gave a real insight into their brains. Their poor mushy brains.
The sad thing is that these people went to school. Maybe even college.
All in all, I'm glad Tam is on our side, and you as well. I don't do snark well. I'm joyously mean.
Oh, about oil:
ReplyDeleteIt would be great if the Jackalope-in-Chief let us drill everywhere, but another big problem is that we haven't built a new refinery since 1976. The quicker we can turn that sweet sweet oil into other products, the sooner prices can go down and become more stable. Oh and make only 1 blend. If you don't like that blend, your state can suck it and get your petroleum products elsewhere at a higher price. When your state's economy hits the toilet while other states flourish, maybe you'll learn an economic lesson.
If you aren't sitting on about 6+ months worth of cash, canned food, ammo, and potable water (or water purification equipment) within the next 12 months, you're fucked anyway and are destine to become a statistic.
ReplyDeleteGod help you if you live in the middle of a medium to large city.
Don't say you weren't warned... it's not doom and gloom, it's just a fact of what's getting ready to happen any day now.
I was going to write up a list of things to go along with AT’s, but it come down to “cuts to the Government of such an extent that it would remind one of what Jason Voorhees does to skinny dippers at Camp Crystal Lake.”
ReplyDeleteI find it interesting that Obama's policies regarding anything to do with any kind of transportation seem to be pushing us toward a time when the free movement of people throughout this country becomes very difficult, if not almost impossible. Some examples :
ReplyDelete1. Touting electric cars that at best have a range of 100 miles and are priced beyond the range of most people anyway.
2. Attacking the largest source of electricity for those electric cars - coal fired power plants.
3. Stopping the development of our own oil supplies and leaving us subject to the whims of governments that despise us (Although plenty of other administrations have left us to those same whims but for different reasons).
4. TSA regulations that get increasingly onerous to the point that many people I know have said they'll refuse to continue flying.
5. Touting the advantages of public transportation when the current system probably couldn't handle 20% of the total traveling public.
Rather than being a conspiracy of any sort I'm sure its more likely just the result of the way Obama thinks (if you can call it that) but its still interesting in a perverse way.
And the Chinese are now doing our old cold war shtick ... propping up third world thugs in return for access to minerals and oil.
ReplyDeleteGuess who actually meets with talks too, and supports people like Mugabe these days ... Rhodesia used to be the major supplier of coal to Africa, care guess where it's going next?
3.) Legalize and tax pot. Let's see...generate billions in immediate revenue, empty about half the population of US jails with huge resultant savings, put a whole violent, cancerous, illegal shadow industry out of business on the southern border, and probably drastically reduce hard drug addiction and alcoholism as a nice side bonus.
ReplyDeleteLegalizing drugs will cut expenses, no problem. But I wouldn't count on getting too much from taxes. People who thumb their noses at the DEA aren't likely to be impressed by the revenuers.
John, legalization brings modern ag and business methods and practices into play, and part of that is resignedly but dependably acting as Uncle's collection agent.
ReplyDeleteOne need look no further than the tobacco and booze industries to see what would happen. A dozen varieties of wacky weed on the shelf down at ABC Liquors would come to be the same as Johnny Walker as to acceptance and revenue generation. The price would still be less than the $400 an ounce that today's hydro product brings, and ask any cop whose house he'd rather be called to at 2 a.m...the guy who picked up a quarter of sativa or the one who took home a quart of Jack. That is all without even considering the ancillary economic and social advantages...or that silly Constitutional freedom thing.
It's a no-brainer...or at least a fried-brainer. :)
AT
"People who thumb their noses at the DEA aren't likely to be impressed by the revenuers."
ReplyDeleteLegalization would massively change the risk/reward equation.
Nobody is going to be selling "tax free" marijuana on the street for $1000 a kilo when the potheads can buy it at the corner drugstore for $100 a kilo, and not have to worry about the cops busting them for illegal pot - the dealers would have to undercut the legal price in order to sell anything. That cuts their profit margin down to almost nonexistence, and the risk stays the same - or maybe even goes up, since the .gov seems to get pretty heavy-handed in punishing tax crimes.
Drug dealing? Pshaw! Generally a year or two actually in prison, if you see the inside of the jail at all. Unless you've got a pretty extensive record, plea bargains are easy. But tax evasion? You're looking at a minimum of five years actually in jail, and maybe more! After all, you stole from the government! That's unforgivable!
So the risk goes up, and the reward drops to almost nothing. Plus, the market dries up too. Most people will get drugs legally because the quality is regulated and guaranteed, and you can take advantage of the court system if someone rips you off. Why buy off the street, when it could be spiked with PCP or something you don't want in order to get you hooked on something more expensive, or it could be cut with Drano or something dangerous?
You might end up with a few hardcore illegal dealers, but most will either quit or switch to selling it legally. The tax can't be worse than paying someone a "protection fee", and it eliminates most of the risks.