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Larry Summers lets the cat out of the bag

Larry Summers on the horrific prospect of haircuts for the EU bond market:

[SUMMERS] The European Central Bank is right in its concern that punishing creditors[1] for the sake of teaching lessons[2] or building political support[3] is reckless[4] in a system[5] that depends on confidence[6].

Let's parse this:

[1] "punishing creditors." Failing to bail out banksters for bad private business decisions with public money.

[2] "teaching lessons." Bringing the endless cycle of bubble inflation, which enriches the looting classes through rents, and bubble bursting, which enriches the looting classes through Shock Doctrine tactics, to a halt. Also, banksters in orange jumpsuits doing the perp walk on national teebee, pour encourager les autres.

[3] "building political support." Winning votes in a democratic political system.

[4] "reckless." Nice little economy you've got here, shame if something happened to it.

[5] "system." Not, obviously, a democratic system, or even a Constitutional one.

[6] "confidence." Continued compliance with all bankster demands. See [4].

I say "lets the cat out of the bag," since I'm sure that this statement from Summers -- who despite or perhaps because of his utterly orthodox views has a reputation for brilliance -- regarded as utterly unexceptional by our elite; a throw-away line. You'll notice that Whalen questions the ortho but not the doxy:

But can we build or maintain public confidence in markets or governments upon castles made of sand?

Well, to answer the rhetorical question, no, you can't. But notice how Whalen gives his own game away with "public." His "public" is, in fact, the same looting class to whom Summers addressed his remarks.

So what's the real castle? The rentier state. And what's the sand? Well, that seems be to in the process of being determined, but I really don't the eroding foundations have a llot to do with "confidence," or "animal spirits," or the joie de vivre of rentiers. Or golfers on the Vineyard.

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