BuckeyeBlog

“. . . will continue to buy US Treasury bonds even though it knows the dollar will depreciate because such investments remain its “only option” in a perilous world . . .”

What entities do you know that sneer at their constituents (in the old days they were customers) and prosper? “Where ya gonna go, punk? Pay up.” The investor in this story is China, but it doesn’t matter who it is. Our creditors are slowly facing up to the fact that they’re buying nonsense; the only reason they haven’t stopped already is that this is a very difficult truth to face, and no human wants to do it. Why admit a loss and a failure today when something might happen tomorrow? Often that’s a great strategy. It kept Bill Clinton in office (great for him, lousy for the world). It sometimes wins battles. It often wins in business too. We cheer the guy who fights the odds and wins-but we expect his cause to be a valid one.

And even valid causes lose more often than they win. Another great strategy, indeed a better one, is to take a decision and act. When governments such as the US collapse, goodness, that’s not a pain you want to think about or be present for. Folks, the United States is bankrupt. That’s not hyperbole. It’s a fact. Go dig up IOUSA, David Walker’s film, 30-minute version here. The behavior being engaged in now is that pre-crash panic, shifting anything anywhere to stave off disaster. A successful entity recognizes this, sucks it up and starts over. An unsuccessful one craters into a smoking hole in the ground, and the survivors start over.

This entry was posted on Thursday, February 12th, 2009 at 8:46 am and is filed under Observations. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.