“[N]o matter what you might hear in the mainstream media or from the White House,” say our friends at Political Calculations, “this isn't a situation that developed overnight because of the aftermath of Hurricane Sandy or the so-called ‘fiscal cliff’. Recessionary forces have been at work in the U.S. economy for many months now.”
All of us should be afraid. Sore or otherwise.
“Even though a painful correction is necessary,” writes Peter Schiff, “nobody in power wants it to happen while they're in the driver's seat. So, Bernanke will stick with his well-rehearsed lines: the money will flow until there is ‘substantial improvement’ in unemployment.”
Don’t hold your breath on the ‘substantial improvement’ in unemployment. .
In true political fashion, Obama and the squishy, moderate, Blame-the-Tea-Party portion of the GOP are ready to shift the responsibility for these failed policies produced on both sides of the aisle, by using the fiscal cliff as a ready-made excuse for 30 years of fiscal makeshifts and evasions; evasions and makeshifts that they created.
As our contributor Mike Shedlock pointed out yesterday, Japan’s economy is now contracting at a 3.5 percent annualized rate. Japan it might be remembered came up with the whole “free money- for everyone- 4-EVER!” concept. They have been trying to jumpstart their economy for a decade that way.
In that time China- still a communist country- has vaulted over Japan as the Asian economic power that matters most. And there is only one explanation for a communist, semi-medieval country like China to overtake a supposedly free and prosperous Japan: There are more Ivy League-educated, modern, Keynesian economists in charge of Japan, than in China.
Still China will catch up to Japan and the US soon. China has the same problems that Japan and the US have. They are just earlier in the cycle than us.
In China “free money- for everyone- 4-EVER!” rules the roost even more firmly than it does in the United States, because they have a ton of money.
Where do you think we are getting our money from?
And then there is Europe.
Name one constructive thing that Europe has done in the last hundred years.
Where do you think John Maynard Keynes of Keynesian economic fame came from?
You got it: Europe.
These Keynesians are in control of everything all over the world. They are unconcerned with producing wealth and only concerned with producing money. Wealth and money, you see, are not the same things. We are not producing wealth as fast as we are producing money.
When you produce money without wealth the thin veneer holding the economy together eventually bursts like a balloon does when over inflated.
That’s what’s in store for 2013; or maybe- if we are lucky- we can put it off until 2014 or 2015.
Not quite fiscal doom.
But, then again, maybe.