XML FeedsDon’t be fooled, open your eyes and see the non-recovery recovery
By P Alfonso on Nov 4, 2009 | In 1. The Nation | Send feedback »
Tunnel vision recovery probably would be a better term to describe the so much spoken recovery. Macro selective view of financial indicators is a very deceiving way to prescribe the condition and direction of our economy. There are many who agree that none of the basic problems dealing with our economy and banks have been resolved but just injected them with adrenalin. Those who are preaching recovery know the truth and are only portraying an illusion in order to maintain some public trust for their own personal gain. I recently found this quote and would like to share it with you, "From what I can tell looking at history, all peoples of every empire at its peak, just before its imminent collapse, belligerently maintain their lifestyles at all cost to their own wealth and their own chance of survival. For a number of reasons, you cannot talk them into saving themselves." I can witness to this, can you?
In the news today, we have reports that the employment decline continues to slow although still it nears a quarter of a million per month. At the same time, large companies such as Johnson & Johnson just announced a work reduction of 8,000 employees. There are others that look at a brighter picture going into the New Year but this Holiday Season could become the breaker of that illusion. People are either hurting financially or tightening their wallets. Even a small drop in spending compared to last year could put thousands of retailers out of business and accelerate the steep decline on employment, commercial Real Estate and the economy in general. During the month of October, there was a 28% increase in bankruptcies. If you happen to live in one of the U.S. cities with the highest unemployment, you are not in a recession but a depression.
What has kept our nation’s economy hanging at the edge of the cliff is the cheap money poured into it by the Federal Reserve. There is no way to resolve our budget deficit without massive spending cuts which in turn will mean the loss of many more jobs. The States have avoided massive layoff because of the money that the Federal Government has poured to avoid such. That is why the present administration only claim of success is that the stimulus money spent so far has saved hundreds of thousands of jobs. On the downside, because the States have relied on that money they have failed to make the needed cuts and instead of a cure, they have developed an addiction. They are now counting into receiving continued bailouts from our bankrupted Federal Government that is continuously bailed out by selling bonds sometimes even to itself. We must face reality that even in the short term the nearly two trillion dollar yearly deficit is unsustainable.
We can look in recent history and see the series of events that took place in Argentina when their economy and currency collapsed and perhaps learn something from it. It would be even more educational to take a look at the events that took place in the Soviet Union after its collapse.
In our country the majority still cannot see what is happening, the rest of the world are preparing for the demise of the dollar. One good indicator of the health of the dollar is the recent spike and continuing rise in the price of Gold. The low price in 2009 was $810 an ounce and today it reached $1097 or an increase of 26% and rising. Even more amazing is the $525 an ounce in 2006 which has now more than double or better said the dollar is worth less than half as much as it was then. Gold has achieved this without a panic which is a major driver of gold price spikes, so one can only imagine what it could go to if and when panic settles in.
Perhaps from reading this article, you cannot tell of my optimism and the belief that we can repair our country and government. I have been asked by friends, "Do you have any good news?” The only good news that I can find is that people are waking up and are stepping into the path of the destructive direction in which a Progressive Government has taken our nation for decades. The people will rise and demand that our Constitution, Bill or Rights and traditional values which are indispensable for our national unity and survival be restored and only then, we will begin to experience a real recovery.
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