Economy

The US Treasury just announced that they will be “buying back” outstanding treasury notes during the next quarter for the first time in more than 20 years.

The Treasury Department has undertaken only two previous series of buybacks in the past century. The first took place during the 1920s. More recently, Treasury bought back $67.5 billion of outstanding debt via 45 operations held between March 2000 and April 2002

What followed the first buyback was the Great Depression.

They are claiming that the intent is to make the bond market more liquid. No, what the effect is, is to print our way out of debt. They are going to conjure up $2.5 billion out of thin air, and buy back treasuries with it, in the hopes that people will say “Oh, they aren’t in as much debt now, so I guess I will lend them some more money.”

The first operation is intended for May 29. Through July, the Treasury plans weekly buybacks of up to US$2 billion of nominal coupon securities, and up to US$500 million for Treasury inflation-protected securities (Tips).

This will place more money in circulation and will result in more inflation. There are currently $27.4 trillion in outstanding treasury notes, plus an additional $7 trillion owed to the SS trust fund. A couple of billion isn’t going to do shit, especially when they continue to borrow about $100 billion per day.

This nation and its economy are screwed.

On June 1, the Republicans caved by giving President Biden a blank check to borrow whatever and how ever much money he wants to spend. On that day, the US debt stood at $31.46 Trillion. Within a month, the US had borrowed another Trillion dollars. Here we are, just six and a half weeks after they handed him the credit cards, with $32.54 Trillion in debt.

Proving that the Democrats never deal on ANYTHING with good faith, they are already calling for the abrogation of the handshake agreement that the parties reached to rein in the spending. They are borrowing money at a rate of over $100 Billion every business day. To put that in perspective, I wrote in 2009 that Obama had broken a record by borrowing a Trillion dollars in only six months.

It took this nation over 200 years to borrow a trillion dollars. Trump did it in seven months, Obama did it in only 6 months. It took Biden 9 months to borrow his first Trillion dollars, but he soon got better at it. His second trillion took three months, borrowing $2 trillion in his first year. In fact, he has increased the national debt by 118% in just two and a half years.

President Trump increased the National Debt by 134% in four years.

Obama increased the debt by 194% in eight years.

President George W Bush borrowed his first trillion dollars in two and a half years. He borrowed his second trillion a year and a half later. Another two years, another $1 trillion. All told, President Bush borrowed $5 trillion in 8 years, increasing the national debt by 187%.

It took President Clinton 3 and a half years to borrow his first trillion dollars. All told, he borrowed $1.2 trillion in his first term, and $600 billion in his second. He increased the national debt by 140% in eight years.

George HW Bush borrowed his first trillion in 3 years, and he increased the National debt by 170% in four years.

Reagan borrowed his first trillion in 6 years, and doubled the National debt during his eight years in the White House.

Carter increased the National debt by 150%, but “only” borrowed $300 billion in 4 years. I guess that was when $1 Billion was real money.

Ford increased the debt by 147% in 3 years., Nixon by 135% in 5 years, Johnson by 116% in 6 years, Kennedy by 106% in 2 years, Eisenhower by 108% in eight years.

Democrats, and Republicans, both in a contest to see who can spend the most in our society of “how much can you give me if I vote for you.”

Remember when the Biden spokeswoman told us that borrowing trillions didn’t cost anything because it was already accounted for? So that’s where we are- under Biden, the US has borrowed $4.75 trillion in just two and a half years. This can’t continue.

By definition, anything that can’t continue, won’t. There is no amount of voting that will fix this.

So the Biden administration has just guaranteed all depositors of the SVB bank. Now that he has taken this step, this has effectively nationalized all of the deposits of all banks in the country. Now banks are free to take all of the risks that they want, because they aren’t risking their own, or even their depositors’ money. It’s more free money from Uncle Sugar’s printing press.

The thing is, those who owned stock in the bank are getting screwed out of their money. The bank has declared bankruptcy, and anyone who owned stock in the bank can’t even sell it. In fact, those who were selling the bank short have also lost all of their money. The billionaire depositors are being bailed out, but the bank’s stockholders are not.

The government has removed risk from the banking sector, now it doesn’t matter if you are a good bank manager or not, you are gonna get paid by the taxpayers. There are those calling this a failure of capitalism, but they are wrong. In a free market system, well run businesses are rewarded, poorly run businesses fail. That is how the market stays healthy- the poorly run businesses are eliminated.

Not so in our system. In this system, poorly run businesses that are favored by government are continually bailed out, thus avoiding all consequences of their poor decision making. This is the government picking winners and losers. So let’s look ahead and see the consequences:

Stocks in small banks just became a whole lot riskier, while keeping huge balances in them are now without risk. Banks will have gigantic pools of money that they are now able to use to make risky loans and investments. If the risks don’t pan out, the depositors will be made whole, and the stockholders left holding the bag. A larger bank will then buy out those risky investments for pennies on the dollar. It’s a system begging for abuse and fraud. The ultimate consequence is the destruction of small banks, concentrating all banking in the realm of banks that the government has deemed “too big to fail.”

I wonder who paid one of the Biden clan to make this happen, and how much did it cost?

Substitute teachers in Highland county make $119 a day. It’s a part time job, where they only work when there is a classroom needing a teacher for the day. They are only needed on days that there are students in the school in need of supervision, so at most they can work 180 days per year. That maxes out their earning potential at less than $25,000 a year.

One of those substitutes, Lashawn Kinsey, bought a house in Highlands County, Florida on January 13, 2021. She did it by getting a mortgage for $127,645, meaning that she made a down payment of $2,355. At the time of the mortgage, she had three kids, which placed her below the Federal poverty level of $26,500 for a family of four. I can’t confirm this, but she is almost certainly on public assistance. On top of that, she is a college student, meaning that we are likely paying for her education with Pell grants, because she is a black single mother.

It’s no surprise then that she was soon unable to make the payments, and had to seek assistance from the Florida homeowner assistance fund to avoid foreclosure. The state has been picking up the tab for her mortgage and utility payments, or at least they were until an administrative screw up caused payments to stop back in October.

I don’t feel sorry for anyone in this story, except the US taxpayer. As all of you know, I am shopping for a new home. In order to do so, I had to allow the bank to do a net worth audit, income verification, and credit check. How could a bank loan money to someone with a part time job and no assets? This sounds like the stuff that was going on in the early part of the 2000s that caused the mortgage collapse.

The fact that I had to work a full time and a part time job while going to school, so I could afford to pay tuition, then had to save money and build credit in order to be able to buy a house, while some black woman gets a free one at taxpayer expense must be all of that white privilege I keep hearing about.