Unsustainable Consumption Habits And Hot Potatoes

This is sourced from a comment on a post from "The Burning Platform" website. I believe that this guy nailed it:

"The government has issued trillions of dollars in new debt in the attempt to sustain the previous misallocation of capital – trying to prevent bad loans from failing; to keep elevated home prices from adjusting to normal levels relative to income; to maintain unsustainable consumption habits; and to subsidize purchases of autos, homes and other big-ticket items that have weak intrinsic demand because people already have too much debt. Huge chunks of national savings that should have been available for productive economic activity have been diverted in an effort to maintain an inefficient status quo. We now have corporations sitting on a mountain of what seems to be “cash.” But in fact, they are not holding cash. They are holding a pile of government debt that was issued during this crisis, which somebody has to hold until the debt is retired. Corporations just happen to be “it” in this game of hot potato. Bernanke and Geithner have done nothing but incur public losses in order to defend private interests. This is not skilled leadership – it is misappropriation. Moreover, we’ve failed to address the underlying problems – the need to ultimately restructure debt obligations so that they are in line with the cash flows available to pay them; But we have had such an EXCESSIVE misallocation of capital the last 2 decades that just lowering some homedebtors principal is NOT the solution. Why? Cuz we have no industrial growth and everything is being outsourced. We as a nation should put aggressive policies in place to deter excessive spending and promote savings......make interest expense a less tax favored line item. And stop the fraudulent propping up of the housng market and excessive tax subsidies to housing. Misallocation to Housing has squandered our country's assets. Spending and massive debt acumulation does not build prosperity."
The Hammer

Technology Giveth, Technology Taketh Away

"Every day technology takes us further and further into uncharted depths, pushing the boundaries of what’s possible. Little, it seems, is beyond our reach. With all that we’ve accomplished, however, there’s a feeling we’ve built a civilization—a way of life—that is unsustainable."
Cris Sheridan, June 25, 2010

The entire article:
http://www.financialsense.com/editorials/sheridan/2010/0625.html

Sinclair's Latest View of The World

''Let us not forget the reality that the US has plunged into levels of debt that we could not have previously imagined; nationalized healthcare has been met with fierce resistance nationwide; States are now litigating the demand for its citizens to sign up and/or be fined and imprisoned. TARP bailouts and stimulus spending have shown little positive effect on the national economy; unemployment is unacceptably high and looks to remain that way for most of a decade; legacy entitlement programs have ballooned to unsustainable levels, and there is a seething anger in the populace. The reality is that the financial crisis in the US now construct in the form of state failure exceeds any problems in Europe. Perspective is now in the marketplace, but reality will carry the day in terms of trend. Gold will trade at $1650 and better. The US dollar is no safe haven from anything.''
Jim Sinclair, Gold Market Analyst (www.JSMineSet.com March 25th)