Denninger on Bernanke Confirmation

Consider also that the $3.8 Trillion Dollar Budget will only get about a Trillion or so in Tax receipts. The US Dollar is going to be hit by this spending. Sooner or later we will have to face the music and stop out of control spending by Washington.


http://market-ticker.org/archives/1918-Bernanke-Now-The-Administration-Owns-The-Mess.html

Sunday, January 31. 2010
Posted by Karl Denninger in Politics at 14:54
Bernanke: Now The Administration Owns The Mess

"Perhaps this is his (and President Obama's) intent. After all, our dear President intends to send a nearly $4 trillion Federal Budget to Congress in the coming days, while we are running a deficit of nearly half that. With China increasingly unwilling (or unable) to continue to recycle hundreds of billions annually back to US Debt (a losing strategy for them in the longer term as they'll never be paid off) and both Japan and England drowning under their own debt issuance one has to wonder exactly where Obama and Bernanke think they can source the over $1.5 trillion in net issuance they need to continue the charade.

Perhaps the answer is nothing more complex than intentionally cranking the stock market one more time, then crashing it again, scaring everyone into Treasuries. Recent changes in money-market fund rules to permit them to throw up gates without prior approval of the SEC may be part of this, as may the rumblings about "annuitizing" people's retirement accounts. Anyone care to take a bet on there being some sort of "conversion to something safe" option being thrown about if and when the stock market dives once more?

In any event the key items here are that we now have a "hit list" of Senators that must go from their seats come November, and a reminder that President Obama can no longer blame what I believe is an upcoming collapse of the stock market - a multi-year affair that will be much worse than what we suffered in 2008 and early 2009 - on President Bush. He had the opportunity to name either Volcker or John Taylor (to name two) to the position that Bernanke has, and decided instead to go with the guy who has been a chief architect of the "Brigand-and-Loot-Em" society - for better or worse, it's all his now."