Has Capitalism Failed Us?

“Americans think we are stupid,” said a European diplomat at a dinner party in Washington. ”But we’re not stupid. We’re just working out the problems involved in forming what you might call ‘a more perfect union.’”

“Well, you can unify all you want…it won’t make your debts go away,” we replied. We always try to be a cheery presence at dinner parties…especially in Washington.

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The Arithmetic of a Revolution

Hey… That rascal, Alan Greenspan, is back in the newspapers. And this time he has something sensible to say:

“The emerging fight over the future of the welfare state, a paradigm without serious political challenge in eight decades, is accentuating the center’s declining. The welfare state has run up against a brick wall of economic reality and fiscal book-keeping. Congress, having enacted increases in entitlements without visible means of funding them, is on the brink of a stalemate…”

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A Brief Retrospective of the Year Gone By

Before we say goodbye to 2011, let us pause to remember it…briefly. We spent 365 days with it — 365 days in a row. We can’t just move on to 2012 without at least a backward glance. What kind of a year was it? In what direction did it take the world, dear reader? Should we cheer that it is gone…or merely dry our eyes and hope for the best in 2013?

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Devil Deals

Occasionally, when we’ve had too much to drink, we lull ourselves to sleep with the notion that someone like Ron Paul might succeed. Maybe America won’t become a police state after all. Maybe it will abandon its empire and its imperial death-wish before it’s too late. Maybe it will cut its budget and save the dollar.

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The Corruption of America

The numbers tell us America is in decline… if not outright collapse.

I say “the numbers tell us” because I’ve become very sensitive to the impact this kind of statement has on people. When I warned about the impending bankruptcy of General Motors in 2006 and 2007, readers actually blamed me for the company’s problems — as if my warnings to the public were the real problem, rather than GM’s $400 billion in debt.

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Comparing the US and Eurozone Debts

Right out of the starter blocks this morning, the euro (EUR) has broken through that trading range it held last week (1.3350-1.3450), to the downside, as the ratings agency Moody’s warned the Eurozone that it would begin to review each member. I told you on Friday that I didn’t believe that the Eurozone leaders had done enough to satisfy the ratings agencies… And this is the first step of downgrades all across the board in the Eurozone… And most likely a double-notch downgrade for France.

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Fulfilling Empty Promises by Turning on the Printing Press

We were too busy yesterday to pay much attention to the markets. Besides, markets in the US were closed. Overseas, investors held their breath and their money. Merkel, Sarkozy and Monti were meeting to try to decide what dumb thing to do next.

They’ve already hemmed and hawed. They’ve delayed and procrastinated. They’ve kicked the can down the road several times.

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Lamenting the Consequences of Government Action

The feds are in a funk. Their fixes are coming unfixed. That’s the good news.

In the United States, as in Europe, markets are working diligently, trying to clear away decades of decadence, years of unbridled excess and profligacy. The feds are busy trying to stop them. It’s a fool’s errand, of course, which is precisely why the feds are on the case. We can think of no cadre better suited for the job.

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When Counterfeiting is Legal

If I told you that I had $1.6 trillion on deposit at a local bank, you’d think I was not merely a member of the “1%,” but a member of the “1%” of the “1%.” (Can’t you just imagine the bitter jealousy the other 99% of the 1% would feel?)

But if I then mentioned that — oh by the way — I also owed $1.6 trillion to a bunch of people, you’d realize that I probably belonged to the lowest cohorts of the 99%, rather than the very highest echelon of the 1%. In other words, you’d realize that I wasn’t über-rich; but über-poor.

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