It’s increasingly clear, isn’t it, that our supposed leaders in DC are incompetent, craven, and compromised. The debt deal, which they did with as much drama and little intelligence as possible, is just more evasion and kicking the can down the road. But no one is buying their pretend and extend game any more. In a time when we need real and actual leaders, instead we have pathetic poodles. We need a change. Now.
Italy is imploding too, with apparent runs on their banks. This after Berlusconi was able to tear himself away from teenage hookers long enough to tell the nation everything was fine, just fine. No one believes or trusts him either. (That last link is from Zero Hedge, which has melted down under the onslaught of today’s trading. So, the link may be dead for a bit. Their RSS feed works though)
I’m no economist, but what were you expecting? The debt is too high, there is no money to pay it off, the bond markets insist you reduce the debt. How do you do that without slashing expenditure and or raising taxes? Do you the public want spending to be slashed and what social services there are to decimated and or tax increases on already squeezed pay packets? Or were you expecting the rich millionnaires in power just to raise the taxes of the very rich? What is the answer, raise the debt ceiling and hope it will be different next time round? The system doesn’t work and is creaking to a complete collapse. It never has worked, it has always been a system where the rich get richer and the poor get poorer, only now as the crisis becomes more critical the gloves are off and it is good old fashioned raw capitalism with fewer and fewer holding all the wealth.
Expect the free-wheeling Chinese economy to nosedive in the near future. Their exploited workforce is also a source of instability. People in China are sick of corruption and lack of say in the government. Tienamen Square Massacre only pushed the independence movement underground. The pressure is building and when it blows, it’s gonna blow.
If this is a reaction to government debt problems, how is it all the investors have rushed to put their cash in … government debt. By the logic of the purported bond vigilantes, record low yields (even in absence of Fed purchasing) cannot possibly indicate displeasure with government’s fiscal situation.
The big money boys are happy with the governments who introduce “austerity” measures. This translates as cut all social spending, make private companies the only providers, at a profit of course, and if you can’t afford it then try a charity. Also all public owned assets will be sold off to the corporate world at a nice price of course. We will live in a corporate world where there are no public spaces, no public assets and no entry to society unless you can afford the price. This is a wonderful opportunity for the corporate world to own everything that they can make a profit from, if they can’t make a profit from it, it will remain in public hands. Welcome to corporate fascism.