Treasuries 'Sham' No Small Potatoes

VANCOUVER (Silver Gold Bull) -- It seems another mainstream media foot soldier has decided to take pot-shots at my theory as to how the U.S. government has been able to delay the implosion of its fraudulent Treasuries market.

Once again I was forced to observe my name being spelled incorrectly throughout another insulting rant. This writer used the same incorrect spelling as Business Insider's Joe Weisenthal when he launched his own attack on my work.

This strongly suggests that my new attacker, John Carney, a senior editor at CNBC.com, never even read my original piece (where my name is spelled correctly) but chose to attempt his own rebuttal after merely reading Weisenthal's attack. This, in turn, is suggestive of a sloppy and arrogant mind. Let's see if these traits are exhibited in Carney's attempt at analysis.

Fortunately, he summarizes his two arguments at the end of his attack. Otherwise, it would have been very difficult to decipher precisely what Carney was trying to say in his own effort at explaining how the Treasuries market Ponzi scheme can continue to be funded. It's all about "the contraction of other safe sources" and/or "the expansion of demand created by deficit spending," he says.

I'll deal with the second argument first since this is a variation of the same nonsense Weisenthal was attempting to peddle. This is straight out of the Keynesian version of Economics 101. While there are numerous objections to John Maynard Keynes' simplistic economic analysis, only one flaw will be necessary to highlight the defects in Carney's reasoning.

According to Keynes/Carney, "deficits are good" because with all this extra money sloshing around in the economy, everyone is rich, with lots of money to buy things, including infinite amounts of U.S. Treasuries.

For the near-century in which we have been forced to listen to the drivel of Keynes and his latter-day disciples, we have yet to hear one of these charlatans acknowledge a basic truth: that we must pay interest on all these deficits.

Here is how this minor detail affects Carney's attempt at explaining the Treasuries market Ponzi scheme. Every year that these Deadbeat Debtors rack up more deficits (and add to total debt), the percentage of every revenue dollar consumed in paying interest increases, and the percentage left over to buy things (like U.S. Treasuries) decreases.

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