Kass: Sooner or Later, the Piper Must Be Paid

My view is also that there is no free lunch to remedying past indiscretions in leverage, borrowing and lending; in the fullness of time, a price must be paid.

As my friend, Kevin Ferry, recently wrote, the situation is delicate and the consequences have yet to arrive. The easy part has been achieved -- namely, a global injection of fiscal and monetary liquidity against the backdrop of a seized-up credit market and gun-shy lenders. What surprises Kevin, myself and other skeptics is that market participants, the Fed and the President's cabal have accepted the notion that China and the other central banks' investments in our fixed income are a given, not a variable. Refundings are not only shockingly large, and they now show up more frequently than "Seinfeld" and "Cheers" repeats.

Kevin ended a recent commentary by writing: "The floor might be warm and safe for now, but the hard part of getting up is ahead of us."

And I couldn't agree more.

Doug Kass writes daily for RealMoney Silver, a premium bundle service from TheStreet.com. For a free trial to RealMoney Silver and exclusive access to Mr. Kass's daily trading diary, please click here.

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