Saturday, March 15, 2008
Stocks Plunge Again As U.S. Moves Closer To Economic Apocalypse
A recent Wall Street Journal survey of economists proclaimed that the U.S. is now in a recession. The good news is that they're wrong. The bad news is that the U.S. economy is facing a meltdown far more serious than any recession.
But don't take my word for it. Consider the apocalyptic tone of this excerpt from the normally dry, bland prose of the Associated Press on Friday: "On the verge of a collapse that could have shaken the very foundations of the U.S. financial system, investment bank Bear Stearns Cos. was bailed out Friday by a rival and the federal government."
I suspect we'll be seeing a lot more apocalyptic language from the MSM in the coming weeks, as the U.S. economy starts to melt down.
And make no mistake, a catastrophic economic collapse is on the way. Such is the inevitable fate of any Ponzi scheme economy that has been running on nothing more than smoke and mirrors (and oceans of foreign capital) now for many years.
Of course, those who are poor or working class know first-hand that the U.S. economy has been in increasingly serious trouble since around 1980. Wages have been steadily declining for everyone but the very rich. And working class people now toil more hours for less pay than their counterparts in any other First World nation. (They have to, as a 40-hour workweek no longer is enough to put groceries on the table).
But as long as America had a tiny elite of prosperous super wealthy, we could always point to them and try to convince ourselves that our economy couldn't be all bad. After all, we would note, there are some people out there making a fortune. All it takes is hard work and ambition, right?
Today, with the stock market in the toilet, and the Fed having to step in to bail out the financial sector, it should be clear to anyone that the U.S. economy is in crisis.
If the U.S. economy actually produced anything of value, this would be nothing more than just another typical downturn in the economic cycle.
The problem is, the U.S. economy no longer produces anything of value. Our economic activity basically consists of importing trillions of dollars from central banks in East Asia---which we then use to prop up our Ponzi scheme economy. The ocean of foreign capital that flows into our nation daily is used to pay for the shopping habits of U.S. consumers.
In fact, in recent years, the Great American Consumer has been hailed by U.S. economists as the "locomotive" of the world economy. There was only one problem: U.S. consumers had zero savings and were depending on foreign capital to finance their shopping binges.
Now, with the stock market crisis and the ongoing housing mortgage crisis, nobody is in much of a mood to do any spending these days. And with the dollar rapidly declining, it's only a matter of time before the East Asian central banks start to unload their depreciating greenbacks (which will accelerate the dollar's fall even further in a vicious cycle).
The frightening thing is that East Asian central banks haven't even begun seriously dumping their dollars and yet the dollar is already plunging.
The key numbers which measure the current U.S. economic crisis are so far off the chart that it is difficult to even fathom them. As economics writer Eamonn Fingleton has noted, the U.S. current account deficit (the widest and most meaningful measure of our trade position) now represents an astounding 6.5 percent of our gross domestic product.
As Fingleton notes, only one other major nation has ever exceeded this figure: Italy in 1924. That was just before Benito Mussolini seized dictatorial power.
Wednesday, January 23, 2008
For Millions Of Americans, Economic Crisis Is Old News
Things are looking grim for the U.S. economy these days, the politicians and the MSM pundits tell us.
I'm glad they finally noticed. The fact is, tens of millions of Americans have already been living through increasingly lean times over the past decade.
It took a stock market crisis for the Wall Street crowd to finally notice that the nation's economy is going down the tubes.
But that's hardly news for millions of average American workers, who've seen their incomes stagnate since 1980.
For years, the pundits and the politicians celebrated "strong" economic growth when the rest of us were wondering what they were talking about. The pundits also cheered America's low jobless rate. But the rest of us knew it was all a sham, in an era when millions of jobs pay such low wages that nobody could possibly live on them.
Hard economic times are nothing new for the tens of millions of Americans who already work two or three jobs, just to make ends meet. Or the nearly 50 million Americans who can't afford health insurance. Or the 2 million Americans who are about to lose their homes in the mortgage crisis.
I once had a friend from Europe who came to visit me in New York City. He told me that the American economy was widely celebrated then in Europe and that many Europeans marveled at America's entrepreneurial spirit and low unemployment rate.
I explained to my European friend that although America's economy was then in the midst of what the pundits called "prosperity" and was enjoying a stock market boom, the reality was that millions of Americans were left out in the cold and were still struggling.
At the time, my friend and I were in a bustling, prosperous part of Manhattan. Looking around, it appeared that the nation was indeed economically prosperous. I then took my friend on a short tour through surrounding areas, including Harlem, Brooklyn, and Newark. My friend was astonished at the stark difference between the prosperity he'd just seen in Manhattan and the horrible, Third World-like poverty that was only a short distance away.
This episode reminds me of what is going on today. The pundits and politicians are finally starting to wake up to something that's been obvious to millions of us for years. The American economy is in the toilet.
Sure, a tiny elite wealthy class has been enjoying strong stock market gains for years. Now, they're going to have to share some of the pain, like the rest of us.
In fact, in looking at the economic hard times ahead, I think there's actually a silver lining to all of this. That is: an economically distressed America will finally be forced to end its illegal and immoral occupation of Iraq.
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