The trillions of dollars in public funds U.S. officials are putting on the line to stabilize financial markets and protect the economy from a deep recession would, in normal times, inspire fear of soaring inflation and a tumbling dollar.
But these are not normal times.
“The patient’s on the floor right now. You want to get him up off the floor; then you worry about diet and exercise,” said James Horney of the Center on Budget and Policy Priorities.
Read it all. Well, the Reuters headline says it is not a worry now but it is to a lot of us, and it should be as demonstrated in this article in this past weekend’s Barrons by Jack Willoughby. Make sure to read that also–KSH.
So that huge inverted pyramid built on home values rising to infinity has been sold by the private banks to the central bank in exchange for a bunch of digital dollars. This passes for Nobel Prize-worthy stuff in our enlightened age. The Mongol marauders would guffaw and tell us we’ll take the gold and your land, thanks.
So sad it’s funny.
The cost is very serious. We are a nation fighting two wars, recovering from a major hurricane disaster and trying to bail out Wall Street and maybe General Motors in the near future. Our treasury is empty because the current president felt it was a good idea to cut taxes (disproportionately for the very wealthy) when he took office with a balanced budget and enough left over to pay down part of the national debt.
When we found ourselves in a major national emergence after 9-11 and with all that has happened subsequently the administration has resisted raising taxes with a near fanatical determination. Indeed this is the first administration in the history of the United States that has paid for war fighting exclusively by use of the national credit card. Never before have we had a president who actually called for (and got) tax cuts during wartime.
This is the most fiscally irresponsible administration in modern American history. I have navel lint that is more conservative than this president.
So how have we been paying for all of this? Chiefly by two means. First borrowing money, mostly from foreign banks and governments (read China). And secondly by printing money as fast as we can get the ink and paper loaded. The result has been predictable. Our currency has hit record lows in foreign exchange rates and our treasury is empty. Standard & Poors is threatening to cut our nation’s credit rating from AAA to AA. And the national credit card is pretty much maxxed out Or is it?
We have a new administration coming into office in the early stages of the worst financial crisis in 80 years that is pledged to provide every American with a job, health, happiness and everything they ever wanted while raising taxes only on the very wealthy. Riiiggghhht. If you believe that; I have a bridge I will sell you real cheap.
Not being able to raise taxes in what is shaping up to be a severe recession and inheriting an empty treasury, their options are pretty limited. They will most likely do what the Bush Administration has done. Print money in the hopes that the chickens from these eggs don’t come home to roost before they have to run for reelection in four years.
Those chickens will be an extremely nasty round of inflation. Everyone is worried about deflation right now. And that is understandable. But that is not what is on my long range radar. I see double digit inflation within two to at most three years.
Hang on to your wallets folks. Cuz the dollar in there now is gonna be worth a whole lot less by time President Obama finishes his first term in office.
Under the mercy,
[url=http://ad-orientem.blogspot.com/]John[/url]
An [url=http://www.youtube.com/watch?v=Gj4pUphDitA]Orthodox [/url] Christian