The World And Wiley E. Coyote

wile Coyote

Wile E. Coyote Looked Down

Perhaps some are ancient enough to recall Wiley E. Coyote from the old Roadrunner cartoons. Wiley always ended running off a cliff chasing the smarter bird, running safely after his flying quarry until he chanced to glance down, noticing the yawning empty space beneath him. Then, he dropped like a rock. The camera always closed in on his face as he realized what was in store., too late.

That comes to mind as we note the U.S. government’s bond sales, i.e. borrowings. Specifically, too many of those buying said bonds – lending money – are themselves central banks and/or governments that have no money but are themselves running on borrowings. Or banks in similar condition. We are living in an economy that, world wide, has attempted to lift itself by its own bootstraps on credit.

And that says that the world economy is following Wiley E. Coyote; it is off the cliff but has not looked down. There is though, no going back.

China, once a  primary lender to the U.S. Treasury, no longer has money to lend as its customers can’t afford to buy as they did. Several U.S. states are already in recession. Europe is slowing and Argentina is toast. Brazil’s capacity to produce the upcoming Olympics is in question, compounded by the Zika virus. Canada’s new Lefty Prime Minister is charging into deficits for lack of real money. Russia’s economy is shrinking, pushing President Putin toward further aggression to distract his folk.

The bonds that the Treasury is selling are producing money to pay off older bonds, and their interest due since taxpayers cannot produce enough money to do so. All this adds up to a bunch of bankrupts passing a small amount of real cash from hand to hand as fast as they can in the hope that none will notice that the flying cash is far insufficient to repay the borrowings if anyone ever stops to count it.

The financial empire then, has no clothes for its emperor’s new suit. It awaits only the little boy to point that out. In Europe, Italy is presently being assigned that chore, Greece having been papered over. There is insufficient paper to manage Italy too.

In Asia, China and Japan are in decline, Argentina and Brazil and Venezuela in South america, the U.S. and now Canada in North America. None are health in Africa. No, India isn’t great either. It’s in essence, unanimous. So is the refusal of governments to admit the reality. But it is reality, reality still sucks and we’re about to see that.

Feel free to explain why we are too negative; we will be grateful if we are proven wrong …

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About Jack Curtis

Suspicious of government, doubtful of economics, fond of figure skating (but the off-ice part, not so much)
This entry was posted in Economics, Goverrnment, Politics, Uncategorized and tagged , , , . Bookmark the permalink.

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