It’s a genuine “all oars in the water” event for the US. But half of both political teams stowed their oars and folded their arms, while the hole in the boat glugged up water, faster.

Cash is shrinking. That’s the clock that’s ticking on the US House of Representatives. Contraction of credit markets result in disappearance of the nation’s cash. This prompts banks and citizens to want more cash. And when they get their hands on it, they put it in the mattress, which takes more cash out of circulation.

Short term municipal paper rates are one of the many canaries to this, as they approach 6% (1.5% is their norm). State & local governments are paying 4x as much to borrow money that funds daily operations. Like $4 gas for police, fire & rescue vehicles, it’s not in their budgets.

The Treasury is printing money madly to keep up flow but the net result is rapid shrinkage. At a point, good assets see their values fall off the edge because there is not enough cash left to put the pressure of “demand” on their price.

It doesn’t get all better when the sun comes up the next day. So much cash gets destroyed (and value along with it), that not enough remains spread among the many hands needed to restart things. Commerce and valuations don’t resemble what they were (before the cash all disappeared).

Low tide has revealed a striking poverty of understanding for financial matters in Congressional rep and citizen. Many simply do not know two of our wheels have no ground under them and have no means to know, even when shown. It illuminates another necessary ingredient for how things got where they are.

It really is the wolf this time. The big bad wolf. And he’s here at precisely the time that story said; when so many don’t believe.