MF-ing Global, The Super Con-mittee and Euro-boneheads = Deflationary Death Spiral

The Super-Committee has its deadline this week and a good resolution seems unlikely (see headlines), which is what most expect. Obama helped to set this impasse up by extending the Bush tax cuts at the beginning of 2011, which are now a major sticking point.

I have an open mind to the theory that this is a bit of chess, with Defense Department cuts being set up by default if no resolution is reached, although they will only start in 2013.

Most politicians would hate to put military spending cuts on the table and take responsibility for them. A failure by the Super-Comm makes the cuts 'automatic.'

We also have headline risk due to European sovereign debt issues that no one seems to be able to get together and fix. The Germans who have provided the lion share of the bailouts are opposed to all the plans previously presented. now they are opposed to Eurobonds. They just wish right now that they never got involved, its been a bad relationship for them. They wanna take their ball and go home.

Futures are down big across the board this morning and Silver iis the most hard hit. Take a look at the charts below they are self explanatory. I explained over six weeks ago how this would play out, that the masters in europe could not and would not get it together and it would drag the US down. Plan accordingly.

 

Hyun Song Shin: wanna know how important Europe is to us. MUST READ

Paul Krugman "The paper covers much more ground than that, of course. This is the latest in a series of papers arguing that the U.S. shadow banking system consists in large part of … European banks. This suggests that the creation of the euro had large implications even in US capital markets; and of course it suggests that the financial fallout of the euromess could be very large here as well.

In short, the ECB could be in the process of destroying not just the euro, but the world".