Today’s Telegraph informs us that the yields on Greek, Spanish, Irish, and Portuguese debt climbed to record levels today, and that Irish bank debt has been cut to junk status. In the meantime, Finland’s political tilt rightwards in yesterday’s elections portend a possible veto of any plans by the European Central Bank to bail out these economies on terms unfavorable to the EC member countries paying the bills.
Greece is now paying 19.7% on 2 year bonds and there is a real fear of government default. This will put even more pressure on the other PIIGS, who are either on or already over the edge. The question then becomes which economies are triaged. Greece, Iceland, and Ireland are all moribund. Portugal is in the middle of a political crisis, and Spain is teetering on the edge. We are seeing the slow motion destruction of the economic and social programs that helped these economies enter the 21st century. It is hard to believe where these countries ranked economically and demographically even 25 years ago.
The Standard & Poor’s downgrade of U.S. debt is, in my opinion, similar to their downgrade of subprime debt in 2007. Too late and out of touch.
Meanwhile, our government reported that inflation remained stable last month. Core inflation, rose only 0.1% to 1.2%, we are told. The gross inflation rate was 2.7% year over year. And yet anyone who has been to the market in the past 4 months has seen the steady rise of prices. While food and oil are not calculated in the core inflation rate because of their volatility, what then explains the rise in air fares, used car prices, imports, industrial goods, etc, etc, etc.? As Churchill once said “lies; damned lies, and statistics”. Our government is not being on the up and up with us.
China’s currency has risen 25% in the past 4 years and wages are skyrocketing. Commodities prices across the board have been rising for the past 3 years and many are at or near all time highs.
All of these numbers and trends have been well documented. It just doesn’t seem as if too many of the people in charge are paying close attention. Or perhaps they are and are simply waiting for the tidal wave to hit. The discussion in Washington dithers and is hijacked by petty political agendas. And yet the warnings cannot be more clear. When S&P warns you and the ICB warns you and the IMF warns you and the Chinese are getting together with the Russians and Brazilians and Venezuelans and Iranians to create alternative global financial structures, it doesn’t get clearer.
The crisis is by no means limited to the United States, but what happens here will have a massive impact worldwide. After all, we live in a truly global economy. Almost every country in the world will face serious repercussions from any of the potential negative financial scenarios outlined above. There is no such thing as a free lunch; a fact which has been forgotten by the economists and politicians. The options are not especially palatable, but just like with castor oil we must swallow our medicine now or face a dire future.
Filed under: Bureaucracy, Financial, Ireland, Monetary Crisis, Politics, Tea Party, Uncategorized Tagged: | American, automotive, Bankruptcy, Barney Frank, California, Chris Dodd, Congress, Corporate, corruption, economics, Ethics, greed, manufacturing, Obama, philosophy, policy, politics, socialism, TARP
Invest in metals!
Brass, Lead, and sharpened steel.
God help us all.
Oh wait.
There is no God.
They said so in college.
The coming world wide economic collapse is the perfect justice for the godless baby boomers who put their faith in their dollars and governments instead of the Creator.
Now which one’s will no longer exist?
Reap what you have sown.
Your punishment is the work of your own hands.
Some people think that China might avert any problems because they think China’s domestic market is big enough to withstand world economic problems. I don’t think so.
An example of inflation and currency… a double cheeseburger at McDonald’s was about .56 cents when I first got here 7 years ago. Now it’s about $1.68….
[...] For a different perspective on the same European economic woes, there is more here. [...]
It was Twain who coined the phrase “lies; damned lies, and statistics” wasn’t it?
My sis had a beloved dog that was falling apart, kept ending up in the middle of the street. I mentioned (in nicer terms than here) that she could kindly put the dog down on her terms or have the dog put down – tragically – on outside terms. She wised up, I don’t have the same expectations of our culture.
Our politicians are…clueless. Neither the left nor the right will admit that they are a major part of the problem, not the solution.
That being said, we will, within 2 years, be forced to accept austerity budgets because at no level of government, can we afford to offer the level of services that are currently in use.
There ain’t no such thing as a free lunch, but our politicians think there is…the bill is coming due, much sooner than expected and will hurt all the more for that reason.
It’s well past time to cut the budget drastically. If I run my household like the government does, I’d be homeless or in prison for fraud. Why is government allowed to get away with this?
Even the simplest Americans are beginning to realize that Obama is not doing this out of ignorance or stupidity. It’s a difficult thing to get your mind around the realization that the President does NOT want the best for the Country, but rather wishes to punish and destroy the Nation as retribution for some perceived injury done to some sort of minority group or “emerging nations” or something or other. Destruction is Obama’s goal and he is being successful. Of course, a massive world war just may be the result of his quest for “social justice”.
The concern I have is that the government has decided that measuring and reporting the inflation rate has become a political tool subject to modification to accomplish political purposes rather than an economic tool intended to accurately measure an economic fact and inform economic policy and decision making. (It’s almost as if someone were trying to measure global temperatures but started to make “adjustments” to accomplish a certain goal rather than make a scientifically accurate measurement…)
You’re right about the govt using tools to manipulate the political winds. You’re wrong about who to blame:
the left-wing biased media- journalists (using that term lightly) who present biased reports that tell SOME of the truth but not all of it. Corporate news centers who perpetuate a myth of reporting the truth, when in practice, they lie by omission of the truth. THESE are the enemies. The players (politicians) haven’t changed. The ethics of the reporters HAS.
“It is hard to believe where these countries ranked economically and demographically even 25 years ago.”
It is hard to believe where this country ranked economically and demographically even 25 years ago.
My thesis is that all $14 trillion+ of our national debt is traceable to the extra-Constitutional Democratic Party entitlement programs (War on Poverty, $6 trillion, and Housing Bubble, $5 trillion+ and counting) and Clueless Clinton’s Dot.com Bubble ($3 trillion) that rose and popped wholly within the Clinton Administration as the NASDAQ lost $2.5 trillion BEFORE Clinton left office. I am quite prepared to defend my thesis on Constitutional and economic grounds.
As bad as things look right now we are still the largest economic and military power in the world, lacking only effective leadership, or any leadership at all. The American people are awakening, and starting to exercise the leadership that is so dreadfully lacking in Washington.
[...] Economic Storm Warning [...]
Think NBC will start pelting us with STORMWATCH
commercials?
For a different look at inflation check out the MIT billion prices project. Providing much faster data on inflation activity and it’s moving up faster then gov data. 1st qtr shows 8% annualized inflation I believe. This data seems much more valuable the some month late ‘adjusted’ numbers from the gov.
“Our government is not being on the up and up with us.”
Along with the inflation numbers, how ’bout the unemployment rate? There may be some temporary “quelling the natives” benefit to lying about these numbers but what about the longer term decay of faith in a government that lies to us?
Illegal immigration is winked at by our government while most American citizens are outraged by it. The illegals themselves are learning that obeying America’s laws is optional. And American citizens are learning that playing by the rules makes them nothing but fools and doormats to be walked on.
No, no, no. The USA and our allies know EXACTLY what they’re doing. Our leaders have chosen a path to the global market that includes developing other countries to produce certain products.
This is an orchestrated ‘shift’ in who controls what. We are turning these different countries and cultures into mass producers of specific things.
Sure, some of the heads of states are going to rattle sabers with the neighbors and maybe commit sins to humanity, but who cares? As long as it’s not happening in your town, why worry?
We armed them all in the cold war and previous, but that’s old technology and poses no real threat to, say, a US Carrier Group Strike Force.
Meanwhile, corporations don’t pay taxes, their machines will always churn out products, and you can always aspire to become an upper management employee and make a lot of money.
Just keep quiet, will ya?
[...] Economic Storm Warning Today’s Telegraph informs us that the yields on Greek, Spanish, Irish, and Portuguese debt climbed to record levels [...] [...]
[...] Economic Storm Warning « Matt's Meditations [...]
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