| feb 04 2007 | | Benanke blunder? | At a recent Senate Budget Committee, concerned with the stresses that the wave of retiring baby boomers would put on social security, Medicare, etc. Helicopter Ben had this to say. "If early and meaningful action is not taken, the U.S. economy could be seriously weakened. The longer we wait, the more severe, the more draconian, the more difficult, the objectives are going to be. I think the right time to start was about ten years ago."
This probably sounds like a reasoned response from a public official, right?
However, this needs a deeper understanding of what is being stated.
When this public official speaks, you had better understand that every word has been weighed, it’s possible interpretation computed, it’s every nuance considered, in the finest detail. This is a man that can dramatically move world financial markets with an ill-timed or misplaced word.
Let’s consider the word from the above quotation, “draconian”. This is not a word you would associate with one of the most prestigious world officials. It is a word you would associate with a left-wing fire brand discussing government infringements, or maybe, an American politician referring to South American or Eastern European dictators.
So what does the dictionary give us for a definition? Draconian comes from the Athenian politician Draco who lived in Athens circ.621 and brought in laws which were unpopular for their severity. There’s another word Ben uses, “severe”. Now you begin to see how every word is measured so as not to conflict but rather support the idea being put forward. What else can we learn? Other dictionary definitions refer to “rigorous, unusually severe or cruel”. Also, “exceedingly harsh; very severe” when referring to draconian legal code; draconian budget cuts.
So in what appears to be a fairly normal comment to a Congressional Committee, we can see that Ben is worried. Not personally, as like most American politicians’ and policy makers he doesn’t live in the real world. Inflation doesn’t affects the likes of Ben, neither is he concerned about his standard of living when he retires. No. what he is telling us quiet clearly if you can read, is that there are rough times ahead, that it is already too late too fix the system and anyone who thinks they will reach retirement and live to collect an inflation linked pension and receive Medicare or any other government supplied services had better reconsider their options.
Once again we need to look no further than New Orleans after Hurricane Katrina to see what the response would be to any civil disruption due to the withdrawal of benefits. The “Authorities” are quite willing to put troops on the streets to “quell” civilians who are looking to survive, or block bridges with armed police ready and willing to fire on people wishing to move from one area to another.
I still say by 2015 the world have descended into one unholy mess that is predictable today based on what we already know. I do not believe we will be able or willing to change that result. I do know that gold will continue to gain in value. Buy gold.
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