The problem with this country is we spent all of our time and resources creating money out of thin air using leverage and smoke and mirrors or serving each other lattes. America needs to produce actual stuff in order to get back on our feet. The government can spend money wisely to steer us down that path...or it can continue to piss away the tax revenue of future generations on short term Band-Aids that don't solve our problems. _MotleyFoolThe US is poised on the brink of a disastrous monetary and budgetary policy that will destroy the surviving financial infrastructure of the country, along with any reasonable prospects for an early recovery. We are being given a gargantuan "recovery bill" that is all about political retrenchment for democratic party supporters. Not a recovery bill at all, but rather a wealth transfer bill from producers to political hacks, financial vultures, and non-producers.
If you have worked hard, followed the rules, paid your bills and taxes -- too bad. Unless you are politically well-placed to benefit under the Obama / Pelosi reich, you are only the main course. By the time this financial wrecking ball has done its demolition, your hard-earned assets will be worth a fraction of their current value, unless you make timely preparations.
It is thus almost a dead certainty that the combination of wasteful Keynesian spending (if you will ignore the tautology) and supply-side effects would produce a sharp spike in inflation that is designed to buttress the ability of borrowers to repay their obligations while rendering the value of their payments almost moot for lenders.Inflation makes it easier for debtors to repay their debts. Since the US government is the big daddy of debtors, it makes sense for Obama and Pelosi to flush the dollar's value down the toilet. They can run the printing presses all night long. When will they start printing a $1 Billion bank note? Give them time.
Asians [ed: and others] have saved a lot since the end of the Asian financial crisis, but will find an acceleration of wealth diminution upon them in months to come. Their only defense against this course of action that the G-7 countries have embarked on would be to boycott all debt issuances from the US and Europe over the near-term until yields rise fast and far enough to compensate for inflationary risks. Unless this can be pushed through, the only safe assets would be those that can hold a degree of their purchasing power,namely physical commodities and, of course, precious metals such as gold. _AsiaTimes
During the stock panic, central banks around the world panicked. They fear deflation too, so they started cranking up the printing presses at phenomenal rates. The epic deluge of money they unleashed is going to filter into the real economy and drive up general price levels.Economists and bankers have leveraged themselves up into the stratosphere. Without hyper-leverage buoying them up, they get a strong sinking feeling in their stomachs. The world economy lost a lot of leverage when the commodities boom busted,and home price drops triggering the sub-prime bubble burst. A lot of big-money shops had to close their doors or get bought out. Nowhere to run, hide, shelter, or hedge. The ivy league whizzards [sic-pun] on Wall Street ran out of government sanctioned magic wands.
You can see this above in MZM growth. The US economy is shrinking thanks to the panic, there are less goods and services on which to spend money. Yet simultaneously the Fed is recklessly ramping broad money at double-digit rates. Sooner or later relatively more money will be bidding for relatively less goods and services, which will drive up prices. You simply can’t have 10%+ MZM growth without seeing big inflation eventually. _SeekingAlpha
The direct result was the election of Obama-Messiah, Saviour to the world. Everything the Obama / Pelosi reich is doing now is for short term advantage. Empower the get out the vote for 2010 by giving billions to ACORN. Firm up the DP alliance with the public employees unions, trial lawyers, news media, and low income voters. First assure the retention of power. Then if anything is left over, perhaps you should try to help the economy.
Unfortunately, by the time the reich gets around to constructive purposes, the foundations will have been undermined -- perhaps beyond repair. Take care of your own future, the O / P reich only looks out for its own.
Cross posted at Al Fin