Merkel Tells Obama To Stuff It
Courtesy of Karl Denninger at The Market Ticker
This ought to get interesting….
Referring to the G20 summit in Canada next weekend, Merkel said in a videotaped message that "we are going to discuss when to quit the phase of short-term measures and go on to lasting budget consolidation."
Such a move was "urgently necessary, in the view of the Europeans and particularly of Germany," she said.
Obama urged the world’s leading economies Friday to avoid scaling back government spending too quickly or risk derailing the global recovery.
Heh heh heh….
Oh Mr. President? Yes, you Mr. Obama.
Chancellor Merkel appears to have figured out the meaning of this graph:
That is, more than two years of attempting to force credit creation to expand, thereby once-again restarting the Ponzi Scheme, has failed.
All further exercises in this vein will do is make the damage worse, exactly as I said it would in 2007 initially.
"Our highest priority in Toronto must be to safeguard and strengthen the recovery," Obama said in the letter dated June 16, but released Friday amid concerns about the pace of the global recovery.
There is no recovery Mr. President. There has not been and will not be until the speculators and banksters that have taken on excessive debt, either as creditors or debtors, are forced to disgorge same.
The below chart lays forth the wasteland you are creating:
You (and you predecessor, George Bush) have replaced 11% of final demand (in the form of GDP) with deficit spending. You have no credible plan to stop doing it as final private demand has failed to rebound, just as it did not in the 2003-2007 years and thus George Bush was unable to withdraw his bogus "stimulus" measures.
You are now trapped in an exponentially-deteriorating credit picture Mr. President. The only question remaining is whether you and your idiot "advisors" will recognize this and act in time to prevent the destruction of the political system of The United States.
There is no means by which you can avoid the pain and adjustment that has to be taken. It is not possible, mathematically, to continue to increase the total systemic indebtedness, irrespective of the manipulations and games you attempt to pull on the body politic.
Angela Merkel and the rest of the EU have come to recognize that the path you, your predecessor, and they had embarked on in the 2000 decade was unsustainable and in fact bogus from the start.
But you have refused to pull your head out of your ass, just as has Larry Summers and Tim Geithner.
Your remaining choices are either to do so or to have the market force your hand after further damage to the economy has been done.
The damage thus far accumulated cannot be avoided – no matter what you do, and that’s a fact.
The path you are on not only has failed but it is mathematically impossible for it to succeed.
Good luck Mr. President.
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Picture credit: Jr. Deputy Accountant
