So who watches C-Span on a Friday night? Well I do, I guess because I have such a boring mundane life but in reality I wonder how many people act as though it were business as usual meanwhile the Titanic is sinking!
Folks assume that just because Republicans gained back many seats in the House, although not in the Senate, that this country will get back on track. Do you REALLY think so? Don't you think that is a little naive'? Is our political structure of democrates and republicans and some independents really running policy? Or could it be the AL COPONES and BUGS MORANS of the FED RESERVE? With QE2, the dollar that is already decimated will be obliterated. So your stash of cash will be WORTHLESS!!! And your loaf of bread will be $100 bucks!!! May as well stash chocolate candy bars.....twix, 1000 grand....my favorite!
Britian has got serious financial problems as does France. Do we really think that positive thinking will prevent the ship from sinking? That is like believing that your good works will earn you brownie points with a Holy God and you will be given a secured place in Heaven because of your "goodness".........which by the way is filthy rags juxtaposed to God's Holiness (Isaiah 64:6,7 ;Romans 3:10-12). God's way is to submit to the righteousness of Christ through the gospel, not man's way through his works (Romans 3:20,21). But man will continue doing things his way until.........."For they being ignorant of God's righteousness, and going about to establish their own righteousness, have not submitted themselves unto the righteousness of God. For Christ is the end of the law for righteousness to every one that believeth.........Romans 10:3,4.
The Ship Sinks!
All the Republicans can do is filibuster. So will things go anywhere with the national debt? Will things go anywhere with our trade deficit? Will the underworld gangsters at the Fed ever be audited? Probably not, so what makes people think things will change? Ignorance I suppose. Or perhaps it is positive thinking? Well the Hour of Power Church in California which specializes in positive thinking is no longer the Hour of Power but rather the Hour of NO power due to its $44 million dollar debt it listed in bankruptcy. Folks can not positively think their way out of a soon to be $16 trillion dollar debt.............more than our GDP! It is mathematically impossible to sustain such nonsense. Hey look, you do not have to be a Harvard graduate or even a college graduate to understand basic math. It is like the law of physics........what goes up, must come down.
Why are these problems ignored by the masses? My heart goes out to people who blindly go along with the masses because one day they will wake up and wonder what the heck happened or some will just go along with the political and financial changes considering it to be simply much to do about nothing. You wonder if these people have any convictions!
News Flashes!
Dollar at Risk of Crashing, Triggering Inflation: Strategist
http://www.cnbc.com/
Federal Reserve policies have put the US dollar the risk of crashing, which will hammer consumers through higher prices, strategist Axel Merk told CNBC.
Investors should brace for a much weaker dollar by diversifying out of the greenback and into currencies of other countries, said Merk, chairman and chief investment officer of Merk Investments, of Portland, Maine.
Merk spoke the day after the Fed said it will be embarking on a program to buy $600 billion in Treasurys in an effort to pump up the economy by increasing liquidity. Critics say the program, also known as quantitative easing, will further devalue the dollar and ultimately create inflation.
"It's with the best of intentions but I think it's a very, very wrong policy," Merk said in an interview.
Consumers should prepare for another turn of events like the spring of 2008, when oil prices soared to $147 a barrel and gas at the pump was more than $4 a gallon, he said.
"One of the key things here is a weaker dollar has traditionally not been inflationary because Asian exporters like to absorb the higher cost of doing business," Merk said. "There comes a breaking point when Asian exporters can no longer absorb that higher cost of doing business. They'll raise prices and guess what? They will stick.
"So we will have a cost-push inflation. We're going to get inflation but not where Bernanke wants to have it. We're not going to get wages to go up. We'll get the price at the gas pump to go up instead."
The current climate of low inflation has spurred comparisons to Japan's "lost decade" where deflation prevailed.
But Merk said the difference in monetary policy between the two countries will guarantee different outcomes.
"We won't be like Japan because we finance our deficits externally. So our fate will be different," he said. "We'll have a dollar that may crash in that process. The issue here is that (Fed Chairman Ben) Bernanke wants to have a weaker dollar. This is the first Fed chairman who is seeking to have a dialogue about the dollar."
Merk said forex investors still can navigate a difficult environment but need to be diversified and should focus on countries that will be looking to clamp down on inflation by boosting rates and backing their currencies.
"There's no such thing anymore as a safe asset. Cash is no longer safe," he said. "Do what central banks do, they diversify to baskets of currencies. That's what we try to do. It's a pity for any savers out there, but we'll survive. We'll get through this."
The age of the dollar is drawing to a close
http://www.telegraph.co.uk/
Right from the start of the financial crisis, it was apparent that one of its biggest long-term casualties would be the mighty dollar, and with it, very possibly, American economic hegemony. The process would take time – possibly a decade or more – but the starting gun had been fired.
At next week's meeting in Seoul of the G20's leaders, there will be no last rites – this hopelessly unwieldy exercise in global government wouldn't recognise a corpse if stood before it in a coffin – but it seems clear that this tragedy is already approaching its denouement.
To understand why, you have to go back to the origins of the credit crunch, which lay in the giant trade and capital imbalances that have long ruled the world economy. Over the past 20 years, the globe has become divided in highly dangerous ways into surplus and deficit nations: those that produced a surplus of goods and savings, and those that borrowed the savings to buy the goods.
It's a strange, Alice in Wonderland world that sees one of the planet's richest economies borrowing from one of the poorest to pay for goods way beyond the reach of the people actually producing them. But that process, in effect, came to define the relationship between America and China. The resulting credit-fuelled glut in productive capacity was almost bound to end in a corrective global recession, even without the unsustainable real-estate bubble that the excess of savings also produced. And sure enough, that's exactly what happened.
When politicians see a problem, especially one on this scale, they feel obliged to regulate it. But so far, they've been unable to make headway. This is mainly because the surplus nations are jealous defenders of their essentially mercantilist economic models. Exporting to the deficit nations has served them well, and they are reluctant to change.
Ironically, one effect of the policies adopted to fight the downturn has been to reinforce the imbalances. Fiscal and monetary stimulus in the US is sucking in imports at near-record levels. The fresh dose of quantitative easing announced this week by the Federal Reserve will only turn up the heat further.
What can be done? China won't accept the currency appreciation that might, in time, reduce the imbalances, for that would undermine the competitiveness of its export industries. In any case, it probably wouldn't do the trick: surplus nations have a habit of maintaining competitiveness even in the face of an appreciating currency.
Unable to tackle the problem through currency reform, the US has turned instead to the idea of measures to limit the imbalances directly, through monitoring nations' current accounts. This has already gained some traction with the G20, which has agreed to assess the proposal ahead of the meeting in Seoul. As a way of defusing hot-headed calls in the US for the imposition of import tariffs, the idea is very much to be welcomed, as a trade war would be a disaster for all concerned. China, for one, has embraced the concept with evident relief.
Unfortunately, the limits as proposed would be highly unlikely to solve the underlying problem. Similar rules have failed hopelessly to maintain fiscal discipline in the eurozone. What chance for a global equivalent on trade? With or without sanctions, the limits would be manipulated to death. And even if they weren't, the proposed 4 per cent cap on surpluses and deficits would only marginally affect the worst offenders: for a big economy, a trade gap of 4 per cent of GDP is still a massive number, easily capable of creating unsafe flows of surplus savings.
No, globally imposed regulation, even if it could rise above lowest-common-denominator impotence, is unlikely to solve the problem, although it might possibly stop it getting significantly worse. But what would certainly fix things would be the dollar's demise as the global reserve currency of choice.
As we now know, dollar hegemony was itself a major cause of both the imbalances and the crisis, for it allowed more or less unbounded borrowing by the US from the rest of the world, at very favourable rates. As long as the US remained far and away the world's dominant economy, a global system based on the dollar still made some sense. But America has squandered this advantage on credit-fuelled spending; with the developing world expected to represent more than half of the global economy within five years, dollar hegemony no longer makes any sense.
The rest of the world is now openly questioning the merits of a global currency whose value is governed by America's perceived domestic needs, while the growth that once underpinned confidence in its ability to repay its debts has never looked more fragile.
Already, there are calls for alternatives. Unwilling to wait for one, the world's central banks are beginning to diversify their currency reserves. This, in turn, will eventually exert its own form of market discipline on the US, whose ability to soak the rest of the world by issuing ever more greenbacks will be correspondingly harmed.
These are seismic changes, of a type not seen for a generation or more. I hate to end with a cliché, but we do indeed live in interesting times.