Another must read hmmm report, this week on the US “situation”, Greece, Spain, and much more.
“Well, it’s true: “inevitable” is not the same thing as “imminent.” When people see that something is inevitable — and I’m guilty of this mistake myself — they tend to believe those things are also imminent, even when that’s not so. But the inevitable is inevitable, and that means it must happen. We usually can’t predict exactly when — and such things often take far longer to arrive than we imagine they possibly can — but once things start to unravel, they tend to accelerate quickly.” – Doug Casey
Having taken too long to decide on the previous raising of the debt ceiling amidst a bungled process which led to a botched agreement, Congress will once again find itself having to find a way to make meaning- ful compromises and adjustments in the financ- es of the United States or face a similar situation to last August, when the S&P500 dived 16% as belief that both sides of the House simply had to get something done in time, turned to disbelief that they really were foolish enough not to.
The agreement reached to raise the ceiling – ini- tially by a stop-gap $400 billion to $14.694 bil- lion, but then by a further $500 billion to $15.194 trillion – and to cut Federal spend- ing by $2.4 trillion, came one day before the United States was set to default but, to be honest, I really can’t bring myself to go into the machina- tions of that agreement again – the dull ache I had in my head at the time that had come from banging it repeatedly against my desk is still too fresh in my mind.
However, the upshot of what was agreed was, even in the current environment, a masterclass in can-kicking as Republicans and Democrats agreed to raise the ceiling on the understanding that they would solve everything later on and the problem kinda sorta went away – for a whole five months.
Full Hmmm Jul 22 2012 report.
Courtesy Grant Williams.