- There is no economy left to recover. The US manufacturing
economy was lost to offshoring and free trade ideology. It was replaced
by a mythical "New Economy."
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- The "New Economy" was based on services. Its
artificial life was fed by the Federal Reserve's artificially low interest
rates, which produced a real estate bubble, and by "free market"
financial deregulation, which unleashed financial gangsters to new heights
of debt leverage and fraudulent financial products.
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- The real economy was traded away for a make-believe economy.
When the make-believe economy collapsed, Americans' wealth in their real
estate, pensions, and savings collapsed dramatically while their jobs disappeared.
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- The debt economy caused Americans to leverage their assets.
They refinanced their homes and spent the equity. They maxed out numerous
credit cards. They worked as many jobs as they could find. Debt expansion
and multiple family incomes kept the economy going.
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- And now suddenly Americans can't borrow in order to spend.
They are over their heads in debt. Jobs are disappearing. America's consumer
economy, approximately 70% of GDP, is dead. Those Americans who still have
jobs are saving against the prospect of job loss. Millions are homeless.
Some have moved in with family and friends; others are living in tent cities.
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- Meanwhile the US government's budget deficit has jumped
from $455 billion in 2008 to $2,000 billion this year, with another $2,000
billion on the books for
- 2010. And President Obama has intensified America's expensive
war of aggression in Afghanistan and initiated a new war in Pakistan.
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- There is no way for these deficits to be financed except
by printing money or by further collapse in stock markets that would drive
people out of equity into bonds.
- The US government's budget is 50% in the red. That means
half of every dollar the federal government spends must be borrowed or
printed. Because of the worldwide debacle caused by Wall Street's financial
gangsterism, the world needs its own money and hasn't $2 trillion annually
to lend to Washington.
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- As dollars are printed, the growing supply adds to the
pressure on the dollar's role as reserve currency. Already America's largest
creditor, China, is admonishing Washington to protect China's investment
in US debt and lobbying for a new reserve currency to replace the dollar
before it collapses. According to various reports, China is spending down
its holdings of US dollars by acquiring gold and stocks of raw materials
and energy.
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- The price of one ounce gold coins is $1,000 despite efforts
of the US government to hold down the gold price. How high will this price
jump when the rest of the world decides that the bankruptcy of "the
world's only superpower" is at hand?
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- And what will happen to America's ability to import not
only oil, but also the manufactured goods on which it is import-dependent?
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- When the over-supplied US dollar loses the reserve currency
role, the US will no longer be able to pay for its massive imports of real
goods and services with pieces of paper. Overnight, shortages will appear
and Americans will be poorer.
-
- Nothing in Presidents Bush and Obama's economic policy
addresses the real issues. Instead, Goldman Sachs was bailed out, more
than once. As Eliot Spitzer said, the banks made a "bloody fortune"
with US aid.
-
- It was not the millions of now homeless homeowners who
were bailed out. It was not the scant remains of American manufacturingGeneral
Motors and Chryslerthat were bailed out. It was the Wall Street Banks.
-
- According to Bloomberg.com, Goldman Sachs' current record
earnings from their free or low cost capital supplied by broke American
taxpayers has led the firm to decide to boost compensation and benefits
by 33 percent. On an annual basis, this comes to compensation of $773,000
per employee.
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- This should tell even the most dimwitted patriot who
"their" government represents.
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- The worst of the economic crisis has not yet hit. I don't
mean the rest of the real estate crisis that is waiting in the wings. Home
prices will fall further when the foreclosed properties currently held
off the market are dumped. Store and office closings are adversely impacting
the ability of owners of shopping malls and office buildings to make their
mortgage payments. Commercial real estate loans were also securitized and
turned into derivatives.
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- The real crisis awaits us. It is the crisis of high unemployment,
of stagnant and declining real wages confronted with rising prices from
the printing of money to pay the government's bills and from the dollar's
loss of exchange value. Suddenly, Wal-Mart prices will look like Nieman
Marcus prices.
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- Retirees dependent on state pension systems, which cannot
print money, might not be paid, or might be paid with IOUs. They will not
even have depreciating money with which to try to pay their bills. Desperate
tax authorities will squeeze the remaining life out of the middle class.
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- Nothing in Obama's economic policy is directed at saving
the US dollar as reserve currency or the livelihoods of the American people.
Obama's policy, like Bush's before him, is keyed to the enrichment of Goldman
Sachs and the armament industries.
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- Matt Taibbi describes Goldman Sachs as "a great
vampire squid wrapped around the face of humanity, relentless jamming its
blood funnel into anything that smells like money."
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- Look at the Goldman Sachs representatives in the Clinton,
Bush and Obama administrations. This bankster firm controls the economic
policy of the United States.
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