June 23, 2009
– Comments (1)
Obama's Regulatory Plan Ignores the Culprit: The Fed!
Absolutely brilliant description of the forces and causes of our current situation. Here's the missing link. It is all intentional. Since we are now in a Global Economy and our ability to work and invest and save is now part of a GLOBAL equilibrium, America is up the creek without a paddle. Our asset prices are simply too high to compete globally in mass production markets, which have always been America's specialty. So, as an instrument of Policy, in order to create a more level playing field Globally, we do in fact have to destroy our economy and dillute our Dollar in order to create a currency which is competitive with China and India, easily the poorest countries of the so called Industrial Producers. Japan, Canada, Europe, Australia and New Zealand, as well as Saudi Arabia aren't really the problem, but they will have to do the same, as they already have with their own stimulus programs. It is a race to the bottom and once it starts it is probably impossible to stop.
There is also this process of natural selection which occurs as well. Those smart enough, or modest enough, to avoid the pitfalls will prove themselves better managers for future enterprise. It is a natural culling of the priviledged. Those who inherited wealth or have earned wealth will be those who are challenged. The rest simply don't matter since they don't contribute anyway.
It would be better to have a Global Currency in order to mitigate problems with currency translation fairness issues. If the entire world was operating under one currency, none of this would be necessary. The plain fact is that the current generation has been put at an enormous disadvantage economically for the entire length of their existence. There has been an overdiscounting of value taking place in Business Markets for a very long time, while at the same time overhead costs, the cost of a home, of property taxes, of Governmental burden have all increased. In some cases that increase has been of such a great proportion as to include all of the increase already built into the system over a 250 year period. The house I bought in 1987 for $250,000 which was taxed at $2,500/year is now taxed at $25,000 per year. If it took 230 years for the taxes to rise to $2,500, what caused them to increase to $25,000? The answer is Government itself as it increased in size to make up for those jobs lost Globally. It was the false hope of a majority of the current generation that they would be able to mooch off of the system without producing anything, in any marketplace, and to rely on Government for their Retirement Check.
Capitalism is patient and waits until the last possible dollar is spent before it implodes and starts the markup phase anew. For younger generations this is very good news. For the current and former generations it has all proved a waste of time.