Recently by Bill Bonner: Sticking With the Golden Formula As Empires Crumble
Who can honestly say that he is not enjoying the show?
Clowns to the left of us, jokers to the right…it’s fun, isn’t it?
Yesterday, the Dow fell and gold rose above $1,600 to a new record high. The euro fell, but against the dollar it is still more than 50% higher than it was when it was introduced 10 years ago.
In Europe, the world’s leading bankers and financial policymakers try to figure out how to avoid doing what comes naturally – going broke.
And in America, politicians scramble to raise the debt ceiling level before it is too late.
The big question is: who will default first? The Europeans? Or the Americans?
Larry Summers, former US Treasury Secretary, warned on TV that failing to raise the debt limit would be worse than after the Lehman bankruptcy in 2008. Ben Bernanke told Congress the same thing.
In Europe, the IMF and the rest of the financial elite have the same message. Don’t let Greece default, or there is a serious risk of “contagion,” and financial catastrophe. Larry Summers even crossed the ocean to give bad advice to the Europeans:
“No big financial institution in any country [should] be allowed to fail.”
On both sides of the Atlantic, the situation is about the same. The geniuses and scam-artists who run the big banks want to keep the honey pots open as long as possible. But there are pressures – mostly from the middle classes, who feel they have been ripped off – to put on the lid.
In Europe, the Germans resist giving more money to the spendthrift Greeks and Portuguese. In America, Tea Party activists want to bring an end to Big Government by cutting off its source of funds. They want to hold the line on the debt limit. Many would be happy to see the nation default.
And here at The Daily Reckoning, we stand with the Tea Party and the Germans. We’d like to see the US government default. Why?
- Because the feds have already done enough damage with their borrowing; it’s time they lived within their means…
- Because we already have enough zombies, supported by borrowed funds…
- Because it will be less painful to stop the debt build up now than later…
- And because we just want to see what happens when the zombies run out of fresh meat.
Bill Bonner is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century and The New Empire of Debt: The Rise Of An Epic Financial Crisis and the co-author with Lila Rajiva of Mobs, Messiahs and Markets (Wiley, 2007). His latest book is Dice Have No Memory. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning.