<blockquote>'The hard truth is that there are no magic solutions to solving this crisis. We will all have to keep our spending in check, pay off our debts and swiftly introduce healthy reforms. This is what will kickstart growth.'
- Dutch Prime Minister Mark Rutte</blockquote>
<blockquote>'Here is one for the surprising candor and honesty department:
Dutch Prime Minister Mark Rutte said "
The hard truth is that there are no magic solutions to solving this crisis. We will all have to keep our spending in check, pay off our debts and swiftly introduce healthy reforms. This is what will kickstart growth."
The one major thing missing is that bondholders, not taxpayers need to take a substantial hit. Only after equity holders and bondholders are 100% wiped out should any public funds come into play.
Addendum:
Reader Donn replies "public pensioners should take a haircut before taxpayers in general", an idea of considerable merit.'
- Mike "Mish" Shedlock,
'Flight to Safety: German 2-Year Bonds Yield Hits Zero..', May 23, 2012</blockquote>
'One of John Maynard Keynes’ principal crimes against sound economics was his demonization of savers. .. In reality, saving is the essential precondition for capital investment, and therefore for economic growth..'<blockquote>'One of John Maynard Keynes’ principal crimes against sound economics was his demonization of savers. Calling for the “euthanasia of the rentier,” he proposed the paradox of thrift, whereby savers in a recession are supposed to damage the ability for the economy to recover by depressing aggregate demand. Like Keynes’ equally spurious calls for increased government spending as a stimulus, this demonization of savers has been used by intellectually dishonest politicians of the left and squishy center to justify policies that have the effect of robbing savers, whether through inflation, excessive taxation or repudiation of government debt.
In reality, saving is the essential precondition for capital investment, and therefore for economic growth. Societies with inadequate savings cannot generally pull themselves out of poverty, however abundant their natural resources. You only have to look at the track record over the last half century of Asian societies, which mostly have a high cultural propensity to save, compared with Latin American societies that do not. Whereas countries like Argentina or Brazil were richer than Korea and Taiwan, little poorer than Singapore or Japan and far richer than China in 1960, today the comparison has reversed.'
- Martin Hutchinson,
The Looting of Savers, May 21, 2012</blockquote>
'..for me today not to see Facebook as emblematic of the incredible transfer of wealth associated with Credit Bubbles.'<blockquote>'Working at my desk today was somewhat surreal. Global risk markets were closing out a dreadful week. Newswires were full of disconcerting articles – J.P. Morgan, Greece, Spain, Italy, China, etc. Meanwhile, CNBC was in the midst of blanket coverage of Facebook's initial public offering. Mark Zuckerberg rang the bell to open Nasdaq trading, while helicopters provided live video of the employee gathering at Facebook’s Menlo Park headquarters. Insiders are now worth billions, the “average” employee millions. Even U2’s Bono pocketed $1.2bn (with a “B”). I noted above how I see J.P. Morgan’s current predicament as a microcosm of global financial woes. Well, it is difficult for me today not to see Facebook as emblematic of the incredible transfer of wealth associated with Credit Bubbles. It’s almost as if this historic Bubble has been waiting to end with just such an exclamation point.'
- Doug Noland,
The Jig is Up, May 18, 2012</blockquote>
Context<blockquote>
'What other central banks have been doing must be reversed..' - Angela Merkel
'It would be simpler to have smaller institutions so that they could fail if they need to fail.' - Bullard (
Source, May 17, 2012)
'..the Volcker rule..' - 'The operation of 100 percent reserve banking .. Amsterdam..''…to sustain a higher standard of living, the production structure—the capital structure—must be permanently “lengthened.” As more and more capital is added and maintained in civilized economies, more and more funds must be used just to maintain and replace the larger structure. This means higher gross savings, savings that must be sustained and invested in each higher stage of production..'
- Murray Rothbard (
‘…there must be prior savings and investment…’)</blockquote>