Slouching toward Armageddon
Even before we found ourselves slouching into September, a chill gripped me one recent morning at my Sierra Nevada foothills home.
The air was crisp as I let Max, the curmudgeon cat, outside just after dawn. But it wasn’t air that chilled me so much as headlines and news on my computer minutes later. After a two-day trip to Dutch Flat, Calif., I needed a New York Times online fix.
Dutch Flat, nearly 90 minutes west of Reno, seems almost 90 years removed from our 21st century flapdoodle and fiascos. After 19th century mining played out there, the pace slackened. Except for future clunkers parked on narrow town streets these days, you get the feel of the 1920s.
Instead of Blackberry devices, blueberries were the focus in flapjacks for breakfast at the restored Dutch Flat Hotel. No charge; just drop a donation of your choice in a kitchen jar. A dip later in the town pool also was free, though donations were encouraged.
This newshound enjoyed the idyllic setting despite having read, just before the trip, that billionaire investor Warren Buffett trumpeted a warning about inflation.
I must confess to ruminating just a tad on that Buffett op-ed article, though just in passing, as I lollygagged in 1920s ambience. Inevitably, however, I quickened my mental pace as I drove back over the Sierra Nevada to home, got a sound night of sleep and then fired up the computer to face our time and the Times.
Late August NYT headlines:
“Dealers Get More Time for Clunkers Payments.” “Al Qaeda Claims Iraq Bombings.” “With 4 U.S. Deaths, Grim Milestone in Afghan War.” “Obama Seeks Stability at Fed by Keeping Bernanke.” “U.S. Raises Estimate for 10-Year Deficit to $9 Trillion.” “The Man Who Sells America’s I.O.U.’s.”
A guy named Van Zeck oversees selling the nation’s IOUs, and he was profiled in a piece that chilled me despite hot morning coffee.
“We are borrowing a ton of money,” Zeck told the Times. The article said that last year Zeck auctioned $5.5 trillion in treasury securities and that is estimated to exceed $8 trillion in 2009, which comes to $253,000 per second.
Zeck is good at his job, but such borrowing tells me the rest of us—yeah, it’s our debt—include a few clunkers, human as well as vehicular, in our ranks.
Speaking of clunkers, the cash for clunkers article told me the feds’ computer got swamped and more time was needed to finish the welfare program for vehicle consumers, dealers and makers.
Then I read the latest downer stories from Iraq and Afghanistan, reminders that wars on two fronts can decimate budgets.
Naturally, my mind next turned to the 10-year deficit heading toward $9 trillion, a change from an earlier estimate of $7.1 trillion.
But surely President Obama, reappointed Fed Chief Ben Bernanke and the Democratically-controlled Congress will solve problems, right? Well, hopefully.
That Buffett/NYT op-ed piece came to mind. He said federal officials are doing what is necessary to get past the emergency, but “unchecked greenback emissions will certainly cause the purchasing power of currency to melt.”
At $253,000 borrowing per second, is it any wonder? Feels like nowadays we’re in Dutch Flat Out, not Dutch Flat, with monetary and fiscal policies putting the debt-to-gross domestic product ratio under pressure.
Buffett said lawmakers eventually must repair national finances, or borrowing against tomorrow will decimate the dollar. “The dollar’s destiny lies with Congress,” he wrote.
All this is really chilling, from my perspective, because it means we could well be slouching toward real trouble.