The recovery that is going to take place on the second half of 2009 is a fool’s fantasy. In today’s environment that is about as ridiculous as those who say “we are spending the future of our children and grandchildren.” None of this is going to happen as we are about to eradicate our debt by default while losing everything we own and head for a new fresh start. Even with a new fresh start, our government still faces the problem of an unfunded 50 trillion for Social Security, Medicare and military pensions.
I read, research and analyze the financial news available on the world’s economy. We cannot understand what will shape our economy without understanding what is taking place with economies that are linked to ours. Do not pay much attention to analyzes and wishful thinking but instead rely on common sense. When someone says that he hopes it does not mean that it will. A hope is nothing more than a hope. Barack Obama has announced that he hopes to reduce the deficit to 533 billion by 2013. That sounds really intelligent as in today’s economic environment no one can predict what is going to happen next week or next month. With high unemployment, bankruptcies, reduction of income for the wealthy and corporation’s earnings near zero or losses the Fed may see a major reduction of revenue for years to come. That being the case our deficit could grow into an unsustainable several trillion every year. Except for the immediate relief to the States, funds allocated for unemployment and food stamps most of the stimulus money will be on hold until the cash is available. As of today, we are only 440 billion short of reaching our national debt ceiling of 11.3 trillion. We can also anticipate that if we fall into hyperinflation or currency devaluation then a lot more would be needed to fulfill the stimulus package.
While we are being fed this recovery bologna there are others who share a different view. George Soros who helped finance the Democrats presidential victory paints a grim picture when he stated that our condition is more severe than the Great Depression. Honesty communicating our economic situation is not what we are going to get from our President or most of the politicians. They have become cheerleaders in the midst of a catastrophe. I don’t recall going to the polls and see any cheerleaders on the list of those applying to govern. Most of what we hear from them today is that they had no idea that we were in this bad of shape. We pay these people to have the knowledge and prevent what is happening to our country.
The world’s economies are collapsing, becoming insolvent and will default on their debt. The economy of England is in worse shape than ours is. Within the past year, the GBP has gone from $2 U.S. to $1.44. The Euro is losing strength as Italy, Spain, Ireland, Portugal and Greece are near insolvency. Japan is already considered by some to be in a depression. Asian countries such as South Korea, Taiwan and Hong Kong have had exports drop that are crippling their economies. China is not exempt, as their economy has also shrunk. Our economy is on life support and largely financed by over one trillion that we owe the Chinese. Much needed cash we are getting from the non-stopping Fed dollar printing press that will eventually make our currency worthless. The only reason our currency has not devalued yet is because the rest of the world is so invested in our currency that they cannot abandon it without suffering severe losses. When they finally give up on our currency, we will face a hyperinflation and a dollar devaluation that will devour our savings. We will see precious metal prices never seen before. Look at it this way. Imagine this chain in which each link represents every major world economy and from it is suspended this huge ball that represents the world’s debt. The weight is so heavy that many of the links are at the verge of rupturing but all that will take is a single link to collapse and send this huge ball in a free fall.
Our government is putting all of the chips on the recently passed stimulus bill. By the time it is finalized, Obama’s stimulus package of over one trillion cannot be financed without China’s commitment to buy such debt. So in order to resolve our insolvency our President has sent Hillary to China with Monica’s knee pads to beg the Chinese to finance his stimulus package. The government of China is skeptical that we can pay back what we already owe them and it would be foolish of them to lend us more. In all, honestly we should doubt that we could ever pay them back. We are basically telling them that in order for us to buy their products they must first give us the money to purchase it. Then if everything goes well, we sometime in the distant future, it is perhaps possible that we may be able to pay them if we change our ways and stop the spending frenzy that we have been carrying on for decades. That is really assuring.
Take for instance the new pledge of Barack Obama to give Gaza 900 million to rebuild from the destruction caused by Israel’s last offensive. We gave Israel the money for weapons to destroy Gaza and now we are giving Gaza the money to rebuild what the money we gave Israel destroyed. How stupid does this sound? Our citizens are being evicted from their homes and we are going to rebuild Gaza homes? What is our President thinking when our house is on fire and he turns the hose in the directions of our neighbor’s house?
While at the verge of an economic collapse that will most likely wipe out savings, pensions, assets and 401Ks our politicians are still hallucinating that our world has not changed. When are aristocrats and politicians going to realize that the rules of the game have change? It is now time to follow the each man for himself rule. That is the new game that we need to be playing even within our own borders. Our government is still trying to keep from drowning those that cannot swim and in the process, they will drown those that know how to. While things were good and we had the money we could get by with a bunch of self proclaimed humanitarian rulers that were giving our house away but unfortunately that game has come to and end and we now need survivalists that will save our house first. Our bankrupt government is in no position to save anyone or guarantee anything such as pensions, savings or bonds. If it just steps back and let the survivalist do what they can do best, they will be able to help others along the way. If our economic system is not allowed to do this, we all will be on life support for years to come.
Our government will nationalize the banks, as they become insolvent by not being able to absorb the massive amount of loan defaults. Government will own everything and the citizens will revolt and refuse to pay their personal debt after losing their assets, retirement and savings. Our citizens cannot lose everything they have and at the same time be told to pay for what they owe.
Our President just spoke and informed us that our economy will not recover unless we borrow more. Our financial problems arise from the the fact that our citizens cannot afford to pay their debt but yet Barack Obama tells us that we must borrow more to save the economy. This sounds like an economic solution that came straight out of the idiot’s economic handbook. He ended by addressing that there are a lot of ifs for success. Our citizens have become to realize that excessive credit and no savings got us in the mess that we are in and are not going to listen to the President’s advice to become more indebted. Needless to say, if the availability of more credit that we won’t be able to repay is our only hope then we are obviously already doomed and just buying time before a total economic collapse. The present status of our economy is not fixable, we will have a new and complete fresh start.
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