Quaker

Nusbaum on Ritholtz: A Review of 'Bailout Nation'

Having read The Black Swan more times than I want to admit to myself, I find narratives on "how we got there" a bit annoying. (Though Kudos's to Roger for a good recommendation. I'll definately take his advice and buy the book.)

Most people missed this collapse for the same reason they're going to miss the next one. To truely understand why we got where we were, you have to combine the histories of guys like Fernand Braudel, Niall Ferguson and, not to sound too ridiculous, Pat Buchanan.

Free trade doesn't work. Free trade has never worked anywhere it's been tried. Free trade combined with fractional banking is a disaster. It was a disaster in Venice, in Lisbon, in Amsterdam, in London and now in New York.

Free trade for the consuming country is nothing other than monetizing your manufacturing equity and arbitraging your labor force either overseas (as in China) or internally. (In terms of illegals) for the purpose of churning money that banks can take a small cut of.

For the record, the Fed didn't create a single nickle of reserves in the decades from 1987 to 2007. Adjusted for inflation, Fed reserves plunged. All this money was created by Saudi and Chinese central banks converting their nations excess capacity to dollars. When inflation drove prices up, the dollar trade became absurd.

Banks arebeing blamed for doing what they're designed to do. Create financial products. It's up to government to decide when a nations currency is out of control and to correct for it.

This entire escapade can be pointed directly at Bill Clinton and his side kick George Bush, who never took the time to think that maybe lobbies interests aren't the countries interests.

The next collapse is going to be in short term government securites. It's going to make the last collapse look like a walk in the park. I can assure the readers, everybodies going to miss this one also. I know this because they're already missing it.

Treasury issues $140bn in government debt of which less than 20% is bonds, half of which are simply monetized by the fed and it sends the bondmarket into a tail spin and CNBC calls it a successful auction. When we getour asses kicked this time,don't blame me.

Consumer Confidence Index Encourages an Economic Rebound

Consumer confodenceis irrelevant.