Submitted by Tyler Durden: Jim Grant spends exactly the correct
amount of time (zero) discussing the "urban myth' of the trillion dollar
coin in this brief interview on CNBC; instead deciding to try
and strike up some intelligent understanding of the dire situation we
face. By providing context for our massive 16 trillion dollar debt (360
million pounds of $100 bills), and explaining how exponential the idiocy
has become, Grant brings us full circle as he explains to the
money-honey that once upon a time our debt was backed by gold, and
"there was only so much gold and so many dollars," thus limiting our
exuberance, but "now we have neither the gold covering the
dollar nor do we have interest rates constraining us [thanks to Bernanke
et al.]; the only thing remaining to constrain us is some sort of civil
discussion, a numerate discussion about the debt," which it
appears the bespectacled and bow-tie-bound bond brain-box hopes is
possible. "The debt has increased twice as fast as federal receipts," he
warns, adding correctly that "the United States is truly submerging."Our fiscal problems are enormous and yet the Federal Reserve, that is "The Bureau of Money Materialization," can print money (materialize dollars on a screen), removing the fiscal constraint too; so what we have is a fiscal problem when the underlying problem is monetary.
With the decidely un-Hamiltonian Lew now in charge and a hyprocritical 'bewailing the debt' Obama now wanting no limits, our future is in the hands of foreigners he warns - and the debt markets will only react when they grasp exactly how big a trillion really is.
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