Friday, July 29, 2011: On Your Mark, Get Set… Boehner Starts a Run on the Banks?

John Boehner, after fumbling with the starting pistol, and apparently shooting himself in the foot, seems to have managed to fire a shot heard around the world; even if it was more like a fart in the wind than the blast of a canon.  Another day of delay on a bill that was nothing more than empty political posturing, with default looming only days away, may just prove to be enough to push nervous markets over the tipping point.  To waste a day on nothing, instead of getting a bill that was going to accomplish nothing at least out of the way, has turned this day into just another one of so many other days wasted by this government that we’ll never get back.  But, this time, rather than just blowing time arguing wedge issues and triggering populous angst and knee-jerk reactions, there’s a keystone congress ready to collapse a global economy that they can’t even fathom, and launch a fire-sale that will further concentrate global wealth into even fewer hands.

On top of all the nonsense they’ve put the country and the world through, one of the things they are arguing about is whether or not they are going to do this all over again in only a few more months.  The 112th Congress has only passed 12 bills as it is.  They are about to enter into the next round of the endless election cycle, this one with the media-loving title match at stake, and they’re already setting themselves up for more gridlock to add to the chaos.  Americans are loosing their homes and these idiots are fighting over tax breaks for corporate jet owners, tax loopholes for millionaires and billionaires, and forcing a completely unnecessary constitutional amendment that requires a 60% majority just so that they will agree to pay the bills they have already accrued.  Raising the debt ceiling does not allow for more expenditure, regardless of the disingenuous talking points that liken it to a blank check for future spending.  Raising the debt ceiling simply allows the government to pay for the spending that congress has already done.  Congress approved the spending before, now they’re just not approving that they pay for that spending.  Fiscal responsibility?

The TEA Party caucus doesn’t know the difference between home economics, small business finance, corporate fiscal policy, and global macro economics.   By equating their decisions regarding the debt ceiling, and the national and global economy, to a household budget, they show their ignorance.  If there is to be any comparison, it would only be relevant if someone thought that the best way to deal with their personal debt was to not pay their existing credit card bills, or the car payment, or the mortgage, or the insurance premiums, then make sure that their credit score gets chopped in half, and then auction everything else off at a yard sale for good measure.  It makes no sense regardless of what economic model you use.  Home economics and the global economy have little more in common than hitching a horse to a wagon has with being the engineer on a nuclear submarine.  Stupidity and arrogance is a dangerous combination.

Unless something drastic happens, and there is no sign of anything drastic happening that can resolve this impasse in a satisfactory manner, the run on the markets will start in Japan.  The bomb that Boehner dropped after the American markets closed on Thursday was beginning to send shock waves around the globe by the time the Nikkei opened.  At the time of this writing,  Asian markets are volatile and trading is choppy because of America’s looming default.  There is red across the boards.  The US Dollar has already dropped to a four month low against the Yen only half way through the trading day.

The decline may be slow at first.  The ‘runners’ will be taking tentative steps, sizing each other up.  They know that the run has all but started, but everyone is shy to be the first to break into a sprint.  No one knows where the finish line lies.  If they break too quickly they could exhaust themselves and be overtaken by the pack.  If they wait too long, they could find themselves with too much ground to make up.  They need to pace themselves.  This isn’t just a flat out race, this is a chess game as well.   For the small investor it may simply be a matter of getting out while the getting is good, but, for the big players, it’s the art of how to make as much money as possible from crashing markets and be one of the few that not only survives, but profits.

As Friday progresses, the absence of any deal on the debt ceiling, and not just any deal, but a responsible deal that reassures the global markets, will cause increasing stress until at some point, when resolution seems unlikely before the end of trading, the trickle that starts in Japan, and grows throughout the European trading day, could very likely become a waterfall.  A weak agreement may ebb the flow, slightly, but even a moderate agreement, at this point, will not be able to reverse the market trends developing in the land of the rising sun.  If you’re a small fish, it may be time to leave the pond until the sharks finish their frenzy, otherwise you just may become another statistic like all those that lost everything in 2007.  On the other hand, if you’re one of those that hates the exploitation and unsustainability of the current financial system, rather than fret as it fails, it may be a good time to thank Speaker Boehner, and the TEA Party, and consider going on the offensive.


10 Responses to Friday, July 29, 2011: On Your Mark, Get Set… Boehner Starts a Run on the Banks?

  1. angellight July 29, 2011 at 10:28 am

    When the GOP propose cut and cap, one must realize what that really means — the cuts of jobs and services all across America! How will that help the economy? And isn’t this a form of home-grown terrorism?

    What has run “amock” in America, is the GOP “Club of Greed & Uncompromise” who sees nothing wrong with giving hand-out to millionaires and billionares while denying everything and anything that would help the working poor and needy. They want to cut education, police forces and fire forces — all the things that make a town and city work to the benefit of the people, while increasing tax cuts to the wealthy and subsidies to the oil companies, who certainly don’t need them Republican cuts will only increase joblessness, unemployment benefits and make it less. safe in your city or town due to cuts in police and fire workers’ jobs. These cuts will further destroy the “fabric” of what is left of America. It is meant to destroy. One can raise the “debt ceiling” without cuts!

    Anyone with common sense knows that we should return to the tax code implemented under President Clinton, when we enjoyed a Surplus and before the implementation of the Bush tax cuts which brought us to the brink where we are at now.

  2. s. mitchem July 29, 2011 at 1:06 pm

    Thanks to all the fools that voted the tea party into congress. BIG MISTAKE!
    The 112th. congress has had 10 work bills and not a one has reached the floor
    Why! It makes Obama look bad on jobs.
    Obama has a plan for the deficit 7mos ago. by “gang of 6” which this president worked on with 3 republicans 3 democrats! So republicans lied!
    It had tax hikes, restructure of the tax bill, balanced budget, cutting and living within our means. Why did republicans not use it and put in their ideas!
    “our most important goal we want to achieve is to make Obama a one term president” and McConnell and republicans will hurt this economy, this country, job creation. and the economy to achieve their goal.
    I have voted for both parties. but, only after I “listen” question, and do my own fact checking, and i love political history, not what you read in the history books
    or making our past presidents into saints. There NOT! they made mistakes that put us in this mess. NOW THE 112 CONGRESS IS HELL BENT ON JUST

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