What's good for the [Dow] ISN'T good for the country

Jesse: It is possible that the Fed monetizes sufficiently to reinflate an equity bubble, essentially whoring out the Dollar and the real economy for the sake of the financial or FIRE sector.

This is what I have been thinking - that the stock indices are now fundamentally disconnected from the health of the economy.

Return of the spiv

Schiff's on a roll - read him. It's long, but worthwhile, epecially the predictive part at the end. An Eastern credit strike, a collapsing dollar, rapid inflation, price controls and the development of a black market.

Unless we bite the bullet and accept high interest rates and a further, bigger crash in house and share prices.

Charles Hugh Smith agrees.

The elephant in the room?

In 'Great Expectations', Charles Dickens wrote: "Annual income 20 pounds, annual expenses twenty pounds and sixpence, result misery" (or words to that effect).

In the 1960's, the US undertook an orgy of spending on the Great Society and the Cold War (including the Vietnam War and Space Race). At the same time, the typical middle-class American lived an extravagant lifestyle, relatively speaking. This was all fueled by cheap American oil, gas and coal.

By 1973, we had used so much that OPEC had us over a barrel, and by 1975 we had our first large trade deficits, which have grown every year.

Since about 1980, not much has come out of our industry that the rest of the world seems to want to buy.

Did we go broke 30 years ago, and are just now noticing it?

I was right, but I didn't know why

Karl Denninger crunches the numbers: in the last 8 years, US GDP has increased by $14 trillion, but debts by $23 trillion, so effectively accounting for all the GDP growth in that time and still leaving a deficit of $9 trillion...

... we haven't had an expansion in GDP over the last eight years. Congress and its organs of reporting economic "facts" have lied. We have in fact actually seen about a 10% contraction in real GDP from 2000 levels; all of the so-called "expansion" of the Bush Administration has been a lie intended to prevent recognition and working through of the recession that should have happened in 2000.

Now, I sensed this during the last 8 years and felt it coming before then, and have recently said so several times. I'm only grateful that technical whizzes like Karl have managed to spell it out. If only we had taken our lumps after the technology bust of 2000.

More money piles into US Treasuries

Published today: US Treasury information shows that in July, another $10 billion poured into their securities from the UK's direction. I had no idea that (a) we were so keen and (b) could afford it.

The same or more each was committed by Japan, China and the Caribbean. All hands to the pumps?

USA - Economy (latest in RED)

Dumping of US treasuries imminent, starting with Korea, says Burnick

"Matt" on US M3, the money supply, inflation

California realtors report house prices collapsing (htp: Drudge Report, LA Times)

Skills shortgage hampering US job repatriation, says AT&T chief (htp: Drudge Report)

2008 US durable goods report: semiconductors down sharply since New Year (htp: Karl Denninger)

Brad Setser presentation (Sept 2006): "Chinese Financing of the United States"

"Naked Capitalism"blog: "China now buys a lot of US debt through London..."

In 2007, UK increased holding of US public debt by 224% to $300 bn, Japan reduced by $50 bn

Major sectors of US economy already in foreign hands