The Lawspeaker
01-09-2010, 02:01 PM
Obama-Bernanke "Economic Recovery" is Actually Dangerous Bubble (http://newrightamerica.blogspot.com/2010/01/obama-bernanke-economic-recovery-is.html)
by Dustin Stanley
http://tiny.cc/cDSOL (http://tiny.cc/cDSOL)
Most of us on the Right have been dismayed for a long time about the unremitting growth of the culture-destroying leviathan that the US federal government has become. It and the corporatocracy that funds the politicians' campaign coffers seemed to have an endless supply of bread and circuses to distract the populace from the damage that 50+ years and counting of leftist social engineering have done to the nation, and from the fact that no matter who is voted in, Republican or Democrat, the overall political program remains the same.
However, in September 2008, the political and corporate machine hit a huge log in the road that caught much of it completely by surprise -- the collapse of Lehman Brothers, which set off an economic shockwave many years in the making -- a shockwave so big that it still to this day has the potential to blow apart every last piece of the aforementioned leftist social engineering, no matter how many Congressmen, Senators, Presidents, Supreme Court Justices, or amnesty-granted illegal alien voters might still support it.
No matter how many times supporters of the much-touted recovery plan spearheaded by President Barack Obama and Federal Reserve Chairman Ben Bernanke claim that the crisis is ending, or has ended, the fact remains that most of the so-called "recovery" has not been created by genuine growth, but by bailouts, giant government stimulus packages, federal programs such as "Cash for Clunkers", and most of all -- the continuous deluge of nearly worthless dollars into the economy from Bernanke's Federal Reserve, which has been literally throwing these dollars at banks at the unprecedentedly low interest rates of 0%-0.25% for almost a year, and stated again just last month that they have no intention of stopping this policy anytime soon.
Bernanke and Obama, while ostensibly creating a "recovery", are in actuality blowing up a gigantic bubble, which will either burst when Bernanke's Federal Reserve finally raises interest rates, thus contracting the money supply, or will inflate indefinitely as the Fed simply refuses to raise rates, resulting in hyper-stagflation as the recession-hit economy eventually becomes unable to cope with the flood of Bernanke's 0%-0.25% interest dollars.
To illustrate this, in the months before the October 2008 crash, the price of one ounce of gold was hovering between $800-$900. Today, it's almost $1,100 an ounce, showing how much the dollar's value has deteriorated.
http://4.bp.blogspot.com/_d-ZcRsWzV48/S0EuAIuMDII/AAAAAAAAAAY/sTNqNFL70hA/s320/2-year+gold+chart.bmp (http://4.bp.blogspot.com/_d-ZcRsWzV48/S0EuAIuMDII/AAAAAAAAAAY/sTNqNFL70hA/s1600-h/2-year+gold+chart.bmp)
So either they cut off the easy 0%-0.25% interest dollars, thus sending the value of the dollar back up again, but the stock market crashing back down, or they let the stock market keep climbing, but continue to throw dollars at banks at basement rates of 0%-0.25%, eventually making the dollar almost worthless.
There is only one card the government can play to stave off these two outcomes, which is its usual trick of borrowing vast sums of money from creditors and then throwing that into the pot, and this it certainly has been doing, but it can continue this only temporarily. At the close of fiscal year 2009, the government's budget deficit was a record $1.4 trillion, and at the close of calendar year 2009, the national debt was a record $12.14 trillion. If borrowing continues at this rate, it will be only a matter of time before US national debt exceeds 100% of GDP, which hasn't happened at any other time in US history except during World War II. (The national debt was at about 81% of GDP at the end of the third quarter of FY 2009.)
http://1.bp.blogspot.com/_d-ZcRsWzV48/S0EvjczklLI/AAAAAAAAAAg/SPJ2wfT3814/s320/debt+as+a+percent+of+gdp.jpg (http://1.bp.blogspot.com/_d-ZcRsWzV48/S0EvjczklLI/AAAAAAAAAAg/SPJ2wfT3814/s1600-h/debt+as+a+percent+of+gdp.jpg)
When it reaches that point, creditors will begin to seriously question the United States' ability to repay its debts (since the US won't have the excuse of WWII this time around), and international credit rating agencies (e.g. Fitch's, Moody's, S&P), will threaten, and will eventually carry through with the threat, to downgrade the US's credit rating, just as they did with Greece when the same thing happened to it in 2009. This will probably be even worse for the US than for Greece, since the US relies so much on having a top sovereign rating. In any event, it will mark the beginning of the end of low-interest foreign loans flowing like water into the national treasury, undoubtedly a dire blow to a US economy that has become so dependent upon them. Should the government pig-headedly continue at this point to borrow no matter what the interest rate and ignoring whatever warnings and sovereign downgrades come their way, eventually the interest will pile up so high that the United States will be forced to default on its debt, and at that point it's game over.
All of these outcomes sound like "gloom and doom", and indeed they are for Marxist social engineers, corporations that peddle meaningless junk and then go begging for bailouts and "corporate welfare", and other such ilk that were and are the main beneficiaries of the current American system in its dying, decaying phases. For the rest of us, however, it should not be seen as "gloom and doom", but rather as an opportunity to rebuild our society, rejecting the pathological values of childishness, low impulse control, herd mentality, and other such rot that have long been pushed on Americans through the media, Hollywood, the government, and the schools under the previous system. This is what we truly must do if there is to be a new American era after the collapse of the old
by Dustin Stanley
http://tiny.cc/cDSOL (http://tiny.cc/cDSOL)
Most of us on the Right have been dismayed for a long time about the unremitting growth of the culture-destroying leviathan that the US federal government has become. It and the corporatocracy that funds the politicians' campaign coffers seemed to have an endless supply of bread and circuses to distract the populace from the damage that 50+ years and counting of leftist social engineering have done to the nation, and from the fact that no matter who is voted in, Republican or Democrat, the overall political program remains the same.
However, in September 2008, the political and corporate machine hit a huge log in the road that caught much of it completely by surprise -- the collapse of Lehman Brothers, which set off an economic shockwave many years in the making -- a shockwave so big that it still to this day has the potential to blow apart every last piece of the aforementioned leftist social engineering, no matter how many Congressmen, Senators, Presidents, Supreme Court Justices, or amnesty-granted illegal alien voters might still support it.
No matter how many times supporters of the much-touted recovery plan spearheaded by President Barack Obama and Federal Reserve Chairman Ben Bernanke claim that the crisis is ending, or has ended, the fact remains that most of the so-called "recovery" has not been created by genuine growth, but by bailouts, giant government stimulus packages, federal programs such as "Cash for Clunkers", and most of all -- the continuous deluge of nearly worthless dollars into the economy from Bernanke's Federal Reserve, which has been literally throwing these dollars at banks at the unprecedentedly low interest rates of 0%-0.25% for almost a year, and stated again just last month that they have no intention of stopping this policy anytime soon.
Bernanke and Obama, while ostensibly creating a "recovery", are in actuality blowing up a gigantic bubble, which will either burst when Bernanke's Federal Reserve finally raises interest rates, thus contracting the money supply, or will inflate indefinitely as the Fed simply refuses to raise rates, resulting in hyper-stagflation as the recession-hit economy eventually becomes unable to cope with the flood of Bernanke's 0%-0.25% interest dollars.
To illustrate this, in the months before the October 2008 crash, the price of one ounce of gold was hovering between $800-$900. Today, it's almost $1,100 an ounce, showing how much the dollar's value has deteriorated.
http://4.bp.blogspot.com/_d-ZcRsWzV48/S0EuAIuMDII/AAAAAAAAAAY/sTNqNFL70hA/s320/2-year+gold+chart.bmp (http://4.bp.blogspot.com/_d-ZcRsWzV48/S0EuAIuMDII/AAAAAAAAAAY/sTNqNFL70hA/s1600-h/2-year+gold+chart.bmp)
So either they cut off the easy 0%-0.25% interest dollars, thus sending the value of the dollar back up again, but the stock market crashing back down, or they let the stock market keep climbing, but continue to throw dollars at banks at basement rates of 0%-0.25%, eventually making the dollar almost worthless.
There is only one card the government can play to stave off these two outcomes, which is its usual trick of borrowing vast sums of money from creditors and then throwing that into the pot, and this it certainly has been doing, but it can continue this only temporarily. At the close of fiscal year 2009, the government's budget deficit was a record $1.4 trillion, and at the close of calendar year 2009, the national debt was a record $12.14 trillion. If borrowing continues at this rate, it will be only a matter of time before US national debt exceeds 100% of GDP, which hasn't happened at any other time in US history except during World War II. (The national debt was at about 81% of GDP at the end of the third quarter of FY 2009.)
http://1.bp.blogspot.com/_d-ZcRsWzV48/S0EvjczklLI/AAAAAAAAAAg/SPJ2wfT3814/s320/debt+as+a+percent+of+gdp.jpg (http://1.bp.blogspot.com/_d-ZcRsWzV48/S0EvjczklLI/AAAAAAAAAAg/SPJ2wfT3814/s1600-h/debt+as+a+percent+of+gdp.jpg)
When it reaches that point, creditors will begin to seriously question the United States' ability to repay its debts (since the US won't have the excuse of WWII this time around), and international credit rating agencies (e.g. Fitch's, Moody's, S&P), will threaten, and will eventually carry through with the threat, to downgrade the US's credit rating, just as they did with Greece when the same thing happened to it in 2009. This will probably be even worse for the US than for Greece, since the US relies so much on having a top sovereign rating. In any event, it will mark the beginning of the end of low-interest foreign loans flowing like water into the national treasury, undoubtedly a dire blow to a US economy that has become so dependent upon them. Should the government pig-headedly continue at this point to borrow no matter what the interest rate and ignoring whatever warnings and sovereign downgrades come their way, eventually the interest will pile up so high that the United States will be forced to default on its debt, and at that point it's game over.
All of these outcomes sound like "gloom and doom", and indeed they are for Marxist social engineers, corporations that peddle meaningless junk and then go begging for bailouts and "corporate welfare", and other such ilk that were and are the main beneficiaries of the current American system in its dying, decaying phases. For the rest of us, however, it should not be seen as "gloom and doom", but rather as an opportunity to rebuild our society, rejecting the pathological values of childishness, low impulse control, herd mentality, and other such rot that have long been pushed on Americans through the media, Hollywood, the government, and the schools under the previous system. This is what we truly must do if there is to be a new American era after the collapse of the old