Wednesday, June 1, 2011

Not THAT Unexpected

The headlines from the White House and other news people is that the current economic situation is -unexpected-... They never say -who- didn't expect it. But they sure are saying it often. Headlines from the past two weeks show the use of the phrase again and again. -WHY-?

I don't geddit.
These are supposedly smart, adult type humans. They have told us again and again how smart and capable they are. I doubt they would even be elected as a high school class president or members of the student council with this silliness. This is even below sophomoric. It's just bull garbage-! By being "surprised" they are hoping that that we will not notice that they were hired to -not be surprised-.

Even if they lack the personal experience of the grade school playground, marketplace dynamics, competition...they should know better. Seemingly, they are admitting their ignorance. So, -why should we re-elect them?-

Today's WSJ has a front page about the housing mess. That was a surprise to somebody. I'm not sure why they didn't see these numbers coming. As they say in Washington, "It's politics..." Which means "How can we spin this so it won't blow back on us-? Quick find someone to blame."

The WSJ, today, has a column by John Huntsman concerning our predicament.

"Unless we make hard decisions now, in less than a decade every dollar of federal revenue will go to covering the costs of Medicare, Social Security and interest payments on our debt. We'll sink even deeper in debt to pay for everything else, from national security to disaster relief. American families will fall behind the economic security enjoyed by previous generations. Our country will fall behind the productivity of other countries. Our currency will be debased. Our influence in the world will wane. Our security will be more precarious. "

"Those who disagree with his approach incur a moral responsibility to propose reforms that would ensure Medicare's ability to meet its responsibilities to retirees without imposing an unaffordable tax burden on future generations of Americans. "

The online journal has a video conversation about what these economic reports mean for President Obama's re-election prospects with John Fund for those who like video. Me-? I like written words... spoken words and video are ok, but not my preference for the computer. OK- I'm old fashioned.

They have a column by George Melloan regarding the -mess- our Federal Reserve Bank has created and how difficult it will be to change things.

Melloan cites this article in Forbes by William F. Ford and Walker F. Todd

"The Federal Reserve has responsibilities and powers that no other American bank has. It can create money, for one thing, without being limited in its monetary expansion by the reserve requirements that bind ordinary banks. Also, the Fed's Board of Governors interprets the relevant statutes expansively as including a mandate to be the "lender of last resort" to the American banking system. "

"Finally, a major portion of the Fed's huge reported profits resulted from its heavy use of leverage since 2007, as the Fed roughly has tripled the size of its balance sheet in response to the financial crisis. By doing this, the central bank ignores the leverage ratios that both U.S. and international capital rules mandate for private commercial banks. At year-end 2007, the Fed had capital equal to about 4% of its total assets, or 25:1 leverage. By year-end 2010, the Fed had only 2.2% capital (now 1.95%), which implies leverage of 45:1 (now over 51:1). The Federal Reserve Bank of New York also now has an astounding 98:1 leverage ratio.

Even if you have never read an economics book, discussed finances with your banker, or done much more than balance your check book and buy your house, you owe it to yourself to understand the dynamics of the times we face. These articles will be a good place to start. A subscription to -both- The wall street Journal and Forbes magazine would be great. At first, it may be confusing. Keep reading. In a short time all this goobledy-gook will make sense. And you will get upset at our leaders and hired "wise-people". They are fools and do not live in the same world we inhabit.

They have bitten deeply of the poisoned apple and drunk deeply into the well of Marxism-Socialism-Progressive-ism... They truly believe that -they know best- and that we, Americans, will be best served by re-distribution of the wealth of the rich. It is a scam. There are not that many rich people. Soon, their massive government will need to tax anyone foolish enough to still be working to pay for 1) govt employees and their golden retirements 2) all the "poor and needy" that will come in sliced and carved up groups. No more -AMERICANS- just groups all coming together under some mystical leader to achieve something wonderful...

The most wonderful thing we can do is to vote em out of office and demand a smaller government. Americans do not need to be herded, ranched, branded, and coddled so that we can produce more, more, ever more for an ever larger government. Let's stop this next year.

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