Posted on 11/05/2009 11:42:26 PM PST by blam
The Feds Have No Faith In Economic Recovery
Economics / Economic Stimulus
Nov 05, 2009 - 05:18 AM
By: Michael_Pento
The stock market has enjoyed a significant rally since the end of the first quarter. The Bureau of Economic Analysis reported last week that the economy grew at a 3.5% annual rate in the third quarter--a figure they achieved by that claiming inflation was running at only a 0.8% annual rate, despite a sharp drop in the dollar, a spike in commodity prices and record highs for gold.
The cyclical bull market in stocks and positive print on GDP has caused some on Wall Street and in Washington to claim the recession has ended. Despite all the good economic news, an end to fiscal and monetary stimulus is nowhere in sight, precisely because policymakers know the happy news is artificially derived.
A closer look indicates that neither the administration nor the Federal Reserve believes its own recovery rhetoric. They understand that the economy will not prosper without continued life support.
I believe removing such artificial stimulus is needed so the country can immediately begin de-leveraging and to prevent the accumulation of yet more baneful debt. What is truly amazing is how many people on Wall Street are foolish enough to postulate that our problems have been solved. The stock market will not be so easily fooled for much longer.
The Great Depression Part II was narrowly averted last year by slashing interest rates to near zero. The Fed made money virtually free because the record level of indebtedness ($34 trillion) in the economy required such low rates so that borrowers could service their obligations. Otherwise a cataclysmic domino effect of defaults and bankruptcies would have occurred.
To avoid that scenario, the public sector assumed some of the private sector's debt and then subsequently took on a significant amount more. The debt of the nation continues to increase at a 4.9% annual rate.
All public debt is ultimately the responsibility of the private sector to pay off--either directly or through future taxes. As a result, the economy has never been more precarious than it is today.
[snip]
We have an administration that doesn’t support economic recovery.
“They understand that the economy will not prosper without continued life support.”
- Life support of course meaning new taxes on businesses and individuals alike.
Maybe another Stimulus will fix this mess. Er, yeah, that’ll work!
The Looting of America: Billionaire Bailout Society
Most of the large international corporation have moved their Hdq overseas as well. E.g. Haliburton moved to Dubai. GE is moving green operations to China. Looks like smart people with money want to be outside the boundaries of the U.S. To avoid social upheaval, rioting and martial law.
There is a crisis coming . . .
The silly run up and down of the silly daily trades of the market has more to do with stealing and gambling than it does with investing. A higher tax on short term gains and ending the special treatment of commodes gains will stop it.
The misallocation of resources into housing is an attempt to restart the prior bubble economy made up of 2-3 story foyers and granite countertops. I was talking with an otherwise reasonable guy about his house in GA that he must sell (he is now in VA). He said it is a high end house and must sell at a high end price. Until unrealistic expectations such as those are reset the economy will continue to suffer. Around me in VA there are empty high end houses but closer to the city (DC) they are still building more.
I'm still kicking myself for not buying a bunch of the 5 gallon flushers before they were outlawed.
Cap and tax will be the final straw. If I didn't realize that the politicians were so clueless, I would have to suspect that they want to completely destroy domestic industry.
LOL, neeed another cup of coffee.
They have been bought and bribed into a corrupt conspiracy to ruin America. That traitor George Soros is primarily responsible. His crazy schemes (including eugenics via Obamacare) are working. He has Zero and most of the Dems and moderate Repubs in his pocket. Please check my freeper page. Hit 'edit' and 'search' for Soros.
So that explains why Citibank is charging 30% APR on their credit cards - so borrowers can service their obligations.
Now it all makes sense.
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