The Euro-Soap

I do not know about you, but I’m tired of the soap opera from across the pond, which is very much like the soap opera here in Washington.  Fiscal discipline is politically unpalatable.  Lack of fiscal discipline, with skyrocketing and unsustainable debts, and government spending unconstrained by reality, is unconscionable not just unpalatable.  It’s a soap opera on the Potomac, it’s a soap opera in Brussels, Paris and Londonium.

For us, here in the US, just remember three numbers:  5.1 trillion is what we spend in a year, 3.6 trillion is what we take in,  so the gap 1.5 trillion is what we add to the debt pile.  A HUGE debt pile.  To be exact, $15.092 Trillion.  Makes you want to Occupy Congress.  And at the very least change the occupant at 1500 Pennsylvania Avenue.

The estimated population of the United States is 311,780,796 so each citizen’s share of this debt is $48,406.96The National Debt has continued to increase an average of $3.99 billion per day since September 28, 2007!

So where do we get the $1.5 trillion? It comes out of thin air, we print the money which, in the not-so-long run, is inflationary.

Now,  European banks have tons of bad sovereign debt on their books.  The huge debt piles of the Greeks, the sonnets of the Portuguese, the paper of the Medici.

Value it at what it is really worth and the banks tier 1 capital (their net worth, so to speak,) disappears and the financial system collapses.

So one school (German) wants the European nations to exercise fiscal restraint, some day collect enough to pay their bills (what a concept).  Ain’t gonna happen, because the power rests with the socialists, (Everybody else in Europe) who want the ECB to print money, buy the bad debt and transfer the debt load via inflating prices with more paper chasing the same supply of goods and services, and debasing the Euro.

If that happens, our trading partners across the ocean will not have the money to buy US goods and services as before, so things get worse HERE. Contagion.

So be happy d0n’t worry. The U.S. unemployment rate fell to 8.6% in November, the lowest since March 2009. Non-farm jobs rose by 120,000, the Labor Department said. Private companies added 140,000 jobs, but the public sector dropped 20,000.  If the Euro-crisis were to catch on here, unemployment will rise again.  So we’re all hoping Europe prints the money.

 

My friend Lou Barnes writes this week, “The Treasury borrows and spends about $120 billion each month, and for that stimulus we get 120,000 jobs. Instead, why not just pay each of these people a million bucks and let them stay home? Europe is struggling with austerity, not us. Yet.

120 billion.  120 thousand jobs.  Ugh.  Happy Holidays!

 

About Timothy E Thomas

Senior business development officer, CENNTENNIAL LENDING, metro Denver. Responsible for SBA 504 production and conventional small balance commercial lending. Centennial is a credit union service organization owned by 13 credit unions in Colorado and Wyoming. Former SBA-USDA desk manager and Registered Representative for Isaak Bond Investments, Inc., a municipal broker dealer and market maker in SBA and USDA guaranteed loans and pools; taxable and tax exempt municipal bonds and agency securities serving institutional investors for over 33 years, member SIPC, FINRA.
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