What is the Real Effect of Borrowing and Printing Money - But Not Letting People Get to It?
Seems like there is a river of money flowing and headed for the falls. Hundreds of billions for corporate welfare. Short term interest rates at record lows. Mortgage rates are still better than any time over the past 30 years.
But foreclosures keep rising and folks just keep going broke. Why should this be happening? Is it not true that cash is being pumped into the economy?
The money rain has been torrential but the banks built a dam and the level is rising dangerously. To be sure, there are some leaks here and there but the watchkeepers are sleeping through the alarms. When it finally breaks the overflow is going to be inflation that rivals developing nations. And it is going to go over a Niagara Falls into an abyss of future obligation.
Look closely at the consequences of near 10 per cent unemployment (double that if you use the statistical methods prior to the Clinton administration) and you will see that they are breathtaking. Assets and cash flow are seriously deflated because the capitalist engine is nearly out of gas. Unemployment is nearly 10% and underemployment of skilled workers just trying to survive is higher than ever. President Carter's economy and the Great Depression are the closest comparisons.
Every state government and most large cities are struggling to stay afloat. Temporary shutdowns, IOU's, and tax hikes - which as you know is counter productive in a recession are rampant. Even the security of working for the government at any level except the federal, is no longer the cushy job it once was.
It seems that it does not matter where you put your money. Though the free fall of real estate appears to have braked, homebuyers are still having a tough time getting mortgage money. And the equities market is still a roller coaster ride that is just too thrilling for many investors.
A delicious irony is apparent when you consider that the economies of Germany and France my be recovering faster than America. By any measure they have long been tipping to left with socialism being way more acceptible, for now at least, than the USA. And those cynical professional bond traders are saying that the Fed is ensuring low interest rates by cranking out more money to meet our mind boggling present and future political obligations.
So what do the bankers do? Well, it seems they have decided to keep the tax dollars given to crank up the economy and instead use them to buy other banks. Opportunity like that just does not come along very often for sure and when people don't have jobs and assets are depreciating why not?
The tragic consequence of all of this gross mismanagement is what third world countries usually experience - very, very high inflation. The government has borrowed to oblivion and the money is being printed with abandon. The banks must eventually let that money go. When is does we will be paying dearly. - 23222
But foreclosures keep rising and folks just keep going broke. Why should this be happening? Is it not true that cash is being pumped into the economy?
The money rain has been torrential but the banks built a dam and the level is rising dangerously. To be sure, there are some leaks here and there but the watchkeepers are sleeping through the alarms. When it finally breaks the overflow is going to be inflation that rivals developing nations. And it is going to go over a Niagara Falls into an abyss of future obligation.
Look closely at the consequences of near 10 per cent unemployment (double that if you use the statistical methods prior to the Clinton administration) and you will see that they are breathtaking. Assets and cash flow are seriously deflated because the capitalist engine is nearly out of gas. Unemployment is nearly 10% and underemployment of skilled workers just trying to survive is higher than ever. President Carter's economy and the Great Depression are the closest comparisons.
Every state government and most large cities are struggling to stay afloat. Temporary shutdowns, IOU's, and tax hikes - which as you know is counter productive in a recession are rampant. Even the security of working for the government at any level except the federal, is no longer the cushy job it once was.
It seems that it does not matter where you put your money. Though the free fall of real estate appears to have braked, homebuyers are still having a tough time getting mortgage money. And the equities market is still a roller coaster ride that is just too thrilling for many investors.
A delicious irony is apparent when you consider that the economies of Germany and France my be recovering faster than America. By any measure they have long been tipping to left with socialism being way more acceptible, for now at least, than the USA. And those cynical professional bond traders are saying that the Fed is ensuring low interest rates by cranking out more money to meet our mind boggling present and future political obligations.
So what do the bankers do? Well, it seems they have decided to keep the tax dollars given to crank up the economy and instead use them to buy other banks. Opportunity like that just does not come along very often for sure and when people don't have jobs and assets are depreciating why not?
The tragic consequence of all of this gross mismanagement is what third world countries usually experience - very, very high inflation. The government has borrowed to oblivion and the money is being printed with abandon. The banks must eventually let that money go. When is does we will be paying dearly. - 23222
About the Author:
My Market Friend is Paul Kluskowskis's blog. It is chock-a-block with current financial, economic, and market news. He is a financial manager at T/R Financial Management Group. He has been in the business for over 10 years and writes extensively with many articles and three ebooks to his credit. Paul also manages the PINGP Work Control Center Mgr at Xcel Energy. You can gethis financial servicesand newletter at My Market Friend
posted by X - Men @ 3:55 AM
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