Tuesday, May 3, 2011

Recovery-? What Recovery-?

I notice the usual wise people are saying we are having a recovery.

Where is it-? I look around and do not see any signs of a recovery.

The numbers of -NEW- filings each week is down. BUT, the numbers of unemployed is fudged. They only count those receiving unemployment checks. Those out of work for lengthy period beyond the compensation period are not counted. Student graduates, but high school and college, are not counted. IOW we're being fudged, fiddled, diddled.

Low because we don't count food prices or transportation, heating, electricity prices in our calculations. When it costs more to feed the family, drive the car, heat/cool the house...then it's inflation.

Stock Market is back up-?
Lessee, first we get the Chinese to raise the value of their currency. This means more people/countries shift away from US dollars to buy Chinese goods. Things priced in US dollars
cost more dollars but the dollar alone, buys less. US buyers of Chinese good must pay more.

Gold, Silver, Oil, Grains, Coffee all heading for record prices. Nobody wants US dollars when other currencies are worth more. BUT it also means that the US dollar is cheap compared to others. This makes not only our products less expensive but also our stocks, land, buildings and even companies. Is the stock market up because US investors are buying value -or- because overseas investors are finding safe haven and good bargains-?

US Dollar Stable-?
The Federal Reserve has kept interest rates low meaning no savings, except for security of institutions. Low interest is supposed to stimulate borrowing. Yet, the new regulations and heightened oversight of lending institutions mean that even the most creditworthy are struggling to find loans. The Fed has pumped $600 thousand-millions into the Treasury to flood the market with cash. This was supposed to make it easier for people to buy homes, cars etc. But again, new regulations and new enforcement interpretations mean that lenders do so at their own risk.

Housing prices -may- have bottomed out. Those who can afford em are staying, even if under water (i.e. owe more than underlying present market value). Foreclosures and sales are slow. They estimate we have a 20-month supply. IOW, if we sell at this rate the inventory will be sold in 20 months. Does this mean that no new homes will be built-? Probably only a few. This forecast also -assumes- that NOBODY will list a home for sale for the next 20 months. Really-?

New cars-? OK, the lack of sales is spurring pent-up demand. However, UAW contracts expire soon... will there be a strike-? Or do we go in a circle again-?

Gas prices are up. Yes, and some wise pundits are forecasting $6/gal by end of summer. That is going to curtail a lot of driving and driving vacations. The President says "BUY a new car." What he hasn't said is "Whose money-?" Big SUVs are safer than liddle cars. They burn more gas, but hauling the kids is not a compromise issue for most Americans.

OTOH The President has shut down drilling in the Gulf. Permits are hard to get and all the goo-newer rigs have moved offshore. One went to help Israel discover it's new oil field. another is going o do the deep ocean drilling that Brazil needs done. Cuba has signed leases with China and other countries to explore their deep Gulf oil fields between Cuba and the US. so, instead of the US having American jobs, rigs and companies we can regulate and penalize should there be a spill, we now face sovereign nations who can easily thumb their nose at our claims. I seriously doubt that Cuba, China and others will willingly dump $20 thousand millions into a fund to pay damages.

The EPA won't allow a pipeline to be built to carry the high sulfur oil from Canada to the Gulf refineries that presently process the Venezuelan high sulfur crude. Venezuela sends us 10% of our oil imports.

We are restricting, delaying and regulating the newly discovered oil and natural gas fields. we are doing everything we can, via regulation and litigation, to stop-slow the use of carbon based products. BUT the price spike is blamed solely, exclusively on "speculators". The US has -never- found any speculators behind the rise in pump prices before... Maybe this time...

The EPA is trying to regulate "Carbon" in the atmosphere. Congress has never given them this power. They and the enviro lawyers are trying to get carbon emissions adjudicated before a court rather than having to actually -prove- it is harmful before Congress, the American people or even other regulators. They have done this before in funding studies via grants to NGO's who in-turn sued the EPA and thus increased their mandate. Regulatory power accretes. It never retreats willingly and only in the face of massive political force.

Businesses are being slow to hire. They cut back and saved jobs by voluntariy hourly restrictions by their employees. Only a non-union company can save jobs and avoid harming a community. The unions have shown, almost completely, their unwillingness to adopt flex hours or even reduced hours in order to save jobs. Businesses will increase their hours worked to reward their loyal workforce before they hire strangers.

Businesses are also hesitant due to the uncertain regulatory environment we're facing. The EPA rules may drive up the cost of transportation of all goods. If the public balks at buying new stuff, the trucking companies will be stuck with employees and no work; new trucks with no feight and new loans they cannot service. Yes, I know that the present demand for trucks and drivers is up...but...is it temporary-? are thet putting old equipment back to work or-?

When prices rise, the public hunkers down. The employees are -ALWAYS- the last to see any increase in wages. suppliers must pay more for raw material. Manufacturers must pay more and -hope- their good will not be refused because of the new price. Only when the new prices are firmly entrenched will employees get raises. It is impossible to give a raise then take it back and keep a good employee. we live in an age where "Stuff is cheap and labor expensive" but unfortunately many of us are still making decisions based on "Expensive stuff and cheap labor"... Higher prices for the same goods will face resistance from buyers.

It's not complicated..
.but it gets that way when we are lied to about; numbers and facts regarding our situation, when we are given spin and not answers, when new regulations are hiden inside bills an proposed regulations to avoid upsetting the public, when nobody knows what to do but keeps talking/spinning the yarn without explaining anything.

Does anyone know what needs to be done and is willing to make the adult decisions-?

Where are the adults-?

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