George Soros "U.S. Could Absorb More Debt," Former China Central Bank Official Calls U.S. Treasuries a "Ponzi Scheme," and Robert Wenzel on Where Inflation is Coming From

In another attempt to rationalize the idea of accumulating more debt for a system run on the accumulation of debt, George Soros makes the call on Bloomberg TV for the U.S. to absorb more debt:

I can't help but think this is just Soros calling on the U.S. to bail out the rest of the world, especially Europe.  This will happen indirectly through World Bank and IMF loans, but Soros clearly sees nothing wrong with more debt.

At least someone is getting it right though, from MarketWatch:

A former adviser to China's central bank said on Monday that China should have retreated from the U.S. government-bond market and instead allowed the yuan to appreciate more freely, warning that U.S. sovereign debt was akin to a giant Ponzi scheme, according to a newswire report that cited an editorial on Caixin Media Group's website.

There is no term more apt then ponzi scheme.  There is still one sane governor in the country though. Gov. Gary Herbert of Utah has the right idea, though it is redundant.  From WSJ:

Populist fears about the Federal Reserve's loose money policy spurred Gov. Gary Herbert last week to sign a law that is already on the books. Utah now explicitly recognizes that gold and silver coins designated legal tender by the federal government are also legal tender in the state.

Mark Perry of the University of Michigan is predicting that with stagnating wages and house prices, inflation won't happen.  Robert Wenzel, in typical fashion, proves him wrong:

Here is what Perry is missing. The money flowing into the economy is not going to wage earners, but it is still flowing. It is going to a large degree to Wall Street and secondly to others holding stocks. These capital gains do not show up as wage gains, but this money is out there slowly working its way through the economy and will push up prices. Secondly, the housing market is completely distorted by government intervention since the middle of the crisis. Supply that should have been cleared out many months ago is only now finding its way on to the market. It is this supply that is keeping housing prices low, not a weakening in dollar demand.
Thirdly, during the financial crisis, the United States experienced a huge flight to cash. The demand to hold cash soared, which had a deflationary tendency on prices. That demand to hold cash is now reversing, thus, even if we don't have money printing or an increase in wages, prices can still climb because of the lessening demand to hold cash balances.

Hence the rise in the stock market.  Wenzel does a fantastic job by channeling his inner-Henry Hazlitt and showing just how inflation enters the market through different channels and doesn't affect all prices at once.  Here is just another sign of coming inflation from Reuters:

The average price for a gallon of gasoline in the United States has moved closer to $4, jumping more than 19 cents since mid-March to a level less than 10 percent below its all-time high, a widely followed survey said on Sunday. The Lundberg Survey said the national average price of self-serve, regular unleaded gas was $3.765 on Friday, up from $3.573 on March 18, and up 91.3 cents from $2.852 a year ago.

Since I was on the topic of an excess supply of houses, Mish has a post today highlighting the Australian.  His graph explains it all:

Stimulus and absorbing more debt was great for Australia's housing market, right Soros?

I will end with a few depressing tidbits.  First we have the Fukushima disaster reaching level 7 status:

As an assessment based on international standards of the accident, the worst "level seven" decided to raise. "Level 7" is the same as the evaluation occurred in the Soviet Chernobyl disaster.

At least the U.S. wasn't involved in the latest intervention scheme in the MENA region:

Ivory Coast’s former president, Laurent Gbagbo, has been captured by French special forces and handed over to opposition leaders, Reuters reported, citing an unidentified adviser to Gbagbo.

And here are your tax dollars still hard at work at GM (Government Motors):

Imagine turning your car’s steering wheel, or giving it a gentle tug, and having it break away from the steering column. Now you’re speeding along holding the suddenly useless wheel.
It sounds like a vision from a cartoon, or every driver’s nightmare. And it happened to at least one driver of a 2011 Chevrolet Cruze compact car last month, and General Motors Corp. is recalling 2,100 of the cars as a result.

Brimming nuclear disaster, military intervention in the MENA region, the ousting of a dictator by wealthy country, and crony capitalism....just another day.

Update- Ron Paul calls out Paul Ryan's budget proposal what it really is:

Potential 2012 GOP presidential candidate Ron Paul (Texas) on Monday panned Rep. Paul Ryan’s (R-Wis.) budget proposal, telling a crowd in Iowa that the Ryan plan will not end big government, which he said is becoming like a monarchy.

He said the budgets proposed by Rep. Ryan and President Obama wouldn't put Washington on a path to limited government.
“Neither of those budgets will solve our problems, or even come close," Paul said.