Monday, July 21, 2014

Monetary Fungibility Part Deaux: Auto Loan Crisis Dead Ahead

As I noted in my last post on Janet Yellen’s asshat remarks, money is fungible.   That means all assets impacted by Federal Reserve policy are impacted equally.   There is no bubble in small caps or junk bonds or other discrete examples.  The bubble is everything.  The bubble is everywhere.  It’s our entire perceptions of reality are a bubble.  The bubble of Washington power is as large as the housing bubble.  The bubble in stocks is as large as the bubble in health care.  The bubble in auto loans is as big as the bubble in consumer debt.  The bubble in industrial farming is as big as the bubble in the military-industrial complex.  The bubble in tyranny and subjugation against the American people is as big as the oil price bubble.  And on and on and on. 

What one really must take away from this New York Times post is not that car loans are the new housing market bubble.  What one must understand is that there is no place left to create new credit.  So, the only way to keep this Ponzi scheme going is to extend credit wherever banking crooks can create demand.   If they can find a sucker to take a car loan for six years at $500 a month, they must do it or watch the system freeze up due to a collapse in the money supply.  

All we are doing is rounding out the size and scope of all bubbles touched by Washington politicians, corporations, Wall Street and the Federal Reserve.   Anything they touch, they will ultimately destroy by squirting money in every orifice impacted by their policy.   That is fungibility.   Hence the reality is all bubbles are equally comparable bubbles.  That includes liar loans on cars, houses, home improvement loans, company loans, margin debt, government debt, credit cards debt, student loan debt, equity margin debt, debt market margin debt, mergers & acquisitions debt, private equity debt, military spending debt and on and on and on.    They are all liar loans because that is the only way they can keep this system from collapsing. 

The ignorance and arrogance of central planners is truly obscene.   I must say that I have never, ever seen anything like this in my life.  We say that over and over again throughout generations but this time it truly is different.  Through no qualified ability or corrective feedback loop, Washington, Wall Street, the Federal Reserve, massive corporations and countless other centralize bureaucracies around the world develop this belief system of their omniscience.  But their perceptions of omniscience are only achieved through policies of violence.  That includes ripping people off anyway they can.  Car loans?  War loans?  Housing loans?  Student loans?  What is the difference?  

We are literally witnessing what is must have been like to like under the Soviet Union or under King George or King Louis XVI.   The buffoonery is so surreal it’s almost hard to believe I’m not watching this in a Mel Brooks’ comedy.

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posted by TimingLogic at 12:14 AM