Don’t Blame the Fed – Blame Stupid People, Liberalism, Democracy

Bitcoin keeps going up, now $110 higher than my post about it last week and over $220 higher than my purchase price:

Anyway, someone posts:

We all know the state of the financial world is far from good, just a few points:

  • Government debt at unprecedented levels.

  • Still at emergency easing levels 8 years later and we are still worried coming off that will crash the economy.

  • Equity and bond markets pretty much rigged… it is seen as political taboo for them ever to drop.

  • The whole world reliant on the state to always come to the rescue.

  • Eurozone “experiment” seeming to be cracking.

  • Rise of socialism.. Sanders in U.S Jeremy Corbyn in Uk

  • Printed a sh*t ton of money and still virtually zero inflation.

Thats just for starters, you can’t talk to anyone in the markets that doesnt just shake their head and say “what a mess”. BUT, humans love a scare story, we are always looking for a disaster. People have been calling for another 08 style crash since.. well 08. I think central bankers are morons for the most part. But you have to give them some respect they are highly educated people, its not in their interest to mess things up. My question is what is their theory behind all this? Is there anyway we can move forward and have a “normal” market and their plan work. Im not asking you to believe in it yourself. But im genuinely curious from an intellectual point of view what is their plan?

I don’t deny there are problems with the country; otherwise, I wouldn’t have a blog devoted to trying to find solutions. But where Zerohedge and the rest of doom and gloomers get it wrong is in shifting the blame to from individuals to big, ‘scary’ entities (Illuminati, fed, bankers, congress, Wall St…etc), ignoring the role of IQ as it pertains to crime, socioeconomic outcomes, why some people are always falling behind. After a certain point, if you keep blaming the fed, you lose credibility. The doom and gloomers are misdiagnosing the problem – the entitlement spending problem is due to liberalism and democracy that enabled it, and that’s why the alt-right ‘gets it’ when everyone else doesn’t – they understand the root of the problem. The fed didn’t cause the achievement gap between blacks and whites, for example. The fed didn’t put a gun to these leftist idiots telling them to major in worthless subjects….or tell the loser homeowners in 2005 to buy more home than they could ever possibly afford…or force Michael Brown to steal from that store…The point is we have biological limitations (IQ, for example) and some free will within those limitations (to buy stocks, to buy real estate, to read the fine print, to try to major in a good subject, to not steal…etc). And people with good genes who make good decisions tend to rise above those with bad genes who make bad decisions.

A person who has the capacity to make decisions and the makes the wrong ones and then complains about the outcomes of their decisions as if they are a victim – is a loser. Same for choosing to live in an alternate reality instead of confronting the existing one, which is the problem with much of the alternative media. They want to believe in doom and gloom and the victim mentality because it’s easier to just wait for the deck to be shuffled and re-dealt in the hope they will get a better hand than to play the cards they have. The future of America and the global economy is like today, but more so. People who understand these trends can succeed, and those who dig in their heels will be left behind.

But back to the original post, if the debt were truly a big deal, it would be reflected real-time in the bond market in higher yields, but yields right now are still at near historic lows and this is long after the fed ended QE, so you can’t blame the fed anymore. My money is on the bond market being right over a broken clock like Peter Schiff.

As I explain here, part of the debt hysteria has to do with a misunderstanding of who actually owns the debt. China owns only 8%. The fed pays it’s interest back to the treasury. Government institutions and trust funds (social security, for example) control a lot of the debt.

Only about 60% of the debt is non-government related.

Europe has been in decline since 2011…not really a big deal anymore, and mostly their own doing due to socialism. None of the major S&P 500 companies have reported significant Eurozone issues. Hillary should win the nomination against Sanders, although I’m voting for Trump. QE, btw, is not money printing, and the reason why there is little CPI inflation is due to the low velocity of money:

What Zerohedge does not understand is that government debt and spending in and of its self is not the problem – liberalism and democracy, which determines how it’s spent, is.


Is the National Debt a Big Deal? Maybe not
Foreigners Keep Buying US Debt – And it Makes the Left Mad