Sunshine and Puppies
As they say on the street “It’s all good, YO!” and I say the same: “It’s all good!” What exactly is so perfect? The indices are rising and AAPL especially is up, so that’s all that matters. In fact, some estimates claim that 90% of the recent USSA equity rally was due to AAPL alone. What’s that; AAPL is carrying most of the entire world’s equity gains ???? Phheeeeew, No worries there son. Seriously though – this sort of scenario has ALWAYS worked out well…and I don’t mean on the “business end” on the spear.
In other news, there is no…I repeat…NO!!!...reason to worry about the debt of the USSA.
The debt of the USSA “comrade Vladashminska-whoever” is HUGE and growing as you will see below from our friends at ZH. But don’t worry folks, it’s all sunshine & puppies from here…this time *cough*…its *cough*…different.
Today, the US total debt rose by $32 billion touching on a new record high of $15.392 trillion. As a reminder this is just the beginning: as we noted yesterday, according to the president's own budget total US debt is now expected to surpasses the greatest and final debt ceiling of $16.4 trillion just around September, and likely sooner with the addition of the $160 billion in additional debt needed to fund the extension of the Bush temporary yet perpetual tax cut through the end of 2012. So while we know that total debt to GDP is already over 100% and unlikely to ever decline back to double digits, thus putting into question the marginal utility of debt to generate further economic growth, another just as important question is what is the incremental utility of tax revenue relative to debt issuance, i.e., is America now issuing more debt than it is collecting from tax revenues: a step which would further cement its status as a banana debt republic. The chart below should provide some comfort in that regard. In fiscal 2012, starting October 31 through today, the US has collected $677.6 billion in withholdings taxes, while issuing $601 billion in debt over the same period of time. In other words, for now at least tax revenues are running 12% above debt issuance. Alas, considering that according to the president's own budget there is another $1 trillion in debt issuance over the next seven and a half months, we have a very distinct feeling the red line will cross the blue line yet again, and quite soon at that. Naturally, a logical question arises: why not just do away with taxes entirely and have all US capital needs be debt funded? After all, all of that "saved or created" tax money would be used to buy bonds or better yet, iBonds, or something just as silly. And the USD would never, ever, lose its status as reserve currency...
Cumulative Fiscal 2012 YTD debt issuance vs tax withholdings.
http://hosting-source.bm23.com/17735...iscal_2012.jpg
I am so looking forward to revealing more scams of the congressional USSA and its so-called leader…the president of the heretoforeknown “United States of America.”
And why do I call it the USSA? Why else; we are now the United Socialist States of America. OK, we have been since the “Guns and Butter” days of the 50s but this has got to stop…now!
Trade well and follow the trend, not the so-called “experts.”
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters.