It seems that even the great John Maynard Keynes, whose theories are now the basis of economic thought world wide, has himself been taken out of context and his theories completely bastardized to suit the consecutive gangs of thieves that have taken over economic and political thought the world over. In a paper entitled, The Great Slump of 1930, the godfather of interventionist ideas, very shortly after the publication of his famous book, “THE GENERAL THEORY OF EMPLOYMENT, INTEREST AND MONEY” realized that there are limits to interventionist policies – that central banks cannot act alone and that only great creditor nations can be the source for sparking ‘wealth creation” through deficit spending. Nowhere in any of his speeches or writings did he even remotely suggest that Socialism should replace Free Markets as the best system for a country to be run on.
On numerous occasions between 1934 and 1937, Keynes warned FDR to discontinue his vilification of Capitalism and American businesses if he ever expected to get the economy back on track. Yet here we are with Bernanke, a self proclaimed expert on the 30’s Depression and Obama, vilifying every industry and company they can for what purpose? To gain political power? Or to look for an excuse for a government takeover? BP from the very beginning proclaimed to all who would listen, that they accepted full responsibility and would PAY all legitimate claims. Obama’s response was that “he will be keeping his boot on the neck of BP” and the lawyers and politicians are out in force readying all sorts of legal action. The USA has stopped being a Nation of Laws and instead has sunk to the depths of MOB RULE; just the same as what happened during the French Revolution.
“The Central Bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an enemy to all banks discounting bills or notes for anything but coin. If the American people allow private banks to control the issuance of their own currency, first by inflation, then by deflation, the banks and corporations that grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.” Thomas Jefferson
With most countries already in competition to devalue their currencies, investors are becoming more concerned with the risk of sovereign defaults. The U.S. could be dangerously close to the point where the more the FED does, the worse the situation becomes. Quite frankly, having already played their interest rate, bailout, and QE cards, everyone is looking for the returns that these policy choices were supposed to generate. Should the FED recharge its printing press prior to achieving their desired effects, you bet that the economy and investors will not be responding well..
Even the mainstream press is starting to take notice, long after the trend has been well established. Ambrose Evans Pritchard dedicated a piece to the collapse in M3 growth, something that hasn’t been seen in the US since the Great Depression. Monetarists the world over are frightened about this trend and with good reason. US interest rates are already essentially zero. The massive monetary and fiscal stimulus has been epic in its proportions. And all this has still not prevented the actual textbook deflationary trend we now find ourselves in.Given these undisputable facts, is it any wonder that there is doubt as to the possibility of a broad, well-grounded economic recovery? The bottom line is as M3 goes, so goes America.
The BIG Fiat Money Ponzi scheme was started back in 1913 with the creation of the FEDERAL RESERVE SYSTEM. However, as we all know (or should know), all PONZI schemes must eventually fail because regardless of their size, they all eventually run out of fresh money. The ultimate breakdown will show up in a US Treasury default. Watch out for it.
With the US still deep in Recession, it is possible and perhaps even likely that the US economy will be dealt a sledgehammer blow over the coming months as the full price for the European crisis might well be paid for in American jobs. Companies that employ European workers have virtually overnight gained a 20% labor cost advantage over US companies. This means they can lower their prices relative to companies employing American workers and grab big chunks of market share.
As the crisis in the Euro continues to develop, some are calling for parity between the Dollar and Euro by next spring. (Could happen a whole lot faster than that.) This would be about a 35% plunge in the value of the Euro compared to where it started from back in January and that includes China and any other country whose currency is pegged to the US Dollar. Say good bye to any chance of China revaluing its currency against the US Dollar, no matter what Geithner says. OUT SOURCING is likely to return with a vengeance especially when Obama’s economic and taxing policies are taken into consideration. All of this is taking place in the midst of a global financial and economic crisis. However, with the ever increasing power of the Unions, things could still get a lot worse.
The economy is reeling, employment has not been growing and unemployment claims are rising even before the Euro’s crash began. Yet, the so-called recovery remains a prediction of most economists and all government officials, none of whom had any premonition whatsoever two or three years ago that the current situation was even possible. They were all heralding the arrival of the New Paradigm.
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