Free trade exists where there is no coercion. Limited governments carve out a firmament of freedom in the coercive international order.

“Though really the little kiddies were comparing Obama more to Jesus than to Lennin.”

Obviously, my friend, you have not been forced to sing the propaganda songs children that age were forced to sing in the Soviet Union. They must have used one of the songs we sang as a template. It’s that similar.

Though really the little kiddies were comparing Obama more to Jesus than to Lennin.

http://www.youtube.com/watch?v=5zrsl8o4ZPo

Boy, this brings back memories of “papa Lenin” and “grandpa Marx” – our benefactors, who lifted us from the dark primordial ooze into the light of their wisdom. We lived in the greatest country in the world, thanks only to them. They loved us enough to sacrifice their only begotten son…oh..wait…wrong religion.

Don’t worry my little pet, your change is coming.

Given the anti US debt voter sentiment, it will be interesting to see how politicians and media respond to the need to increase the ceiling. My guess is it will be a non-event and the ceiling will rise, but surprises do happen.

The post officer is underfunding its pension, a future liability, but the US is on a cash basis system so that the pension costs is not part of the US borrowing costs until retirees actually need to be paid.

Not only is the US taking on an enormous amount of debt, but it is at great financial risk because most of the debt is short term and cannot be inflated away. About 32 percent of US debt has a maturity under a year and 50 percent matures in one to ten years. Another 8 percent will reset because it is inflation protected (TIPS). This 90 percent of US debt will have its interest rate reset upon refunding (or resetting) to a higher interest rate if inflation occurs. A total of 90 percent of the US debt has an interest rate resetting risk.

Plus short term debt (bills) under year and less do not pay interest. Instead, they are sold at a discount and redeemed at a higher price. The (interest) expense is deferred until maturity, and those that mature next year become part of next year’s budget due to US accounting. When short term debt levels increase, next year’s expense increases.

Housing is a smokescreen used by Geithner and Bernanke to keep funding costs low. There is about $7.5 trillion of US debt in public hands. (About another $5 trillion in US agencies). Every one percent interest rate increase in rates of the debt in public hands subject to near term rate resetting is about $67.5 billion, and about a 25 to 30 percent increase in US interest expense. Additionally, the one percent increase is about 2-3 percent of the US government budget, which further increases the deficit, by a significant amount, and the debt.

The public is right to be apprehensive about the amount of US debt because the current cost of interest payments is artificially and unsustainably low. Bernanke and Geithner are using teaser rates to keep the current budget expense low and to avoid tax increase or program budget cuts until the President’s second term or later.

If there were any truth in government borrowing, the government would use a realistic average expected interest rate to show what the true cost of the current debt is to the American public.

I don’t get it. Certainly a better and more thoughtful administration then the last but not really enough change for me.

I can only assume it’s the power of too much “money-is-free-speech”. Corporations and concentrated wealth own the rest of us.

(My wife packed a brown bag for me this morning, and since I didn’t pay for it, it’s free to me…)

“Market fundamentals are that failures should collapse and be replaced by creative new forces rather than being propped up as zombies. Financial institutions have been failing for centuries and the world has survived.”

If the Federal Reserve had allowed hedge fund Long Term Capital Management to fail 11 years ago, “Lehman, Bear Stearns, et al would still be here,” Rogers argues.

“Everyone would have lost so much capital and fired so many incompetents that the madness of serial bubbles (dotcoms, housing, consumption etc.) would never have occurred. … Would that governments stop interfering with fundamental principles and let the market clean out mistakes!

“Letting Lehman fail was perhaps the only thing governments have done right during this whole drama,”

Jim Rogers