That’s quite a headline, isn’t it? Yes, I believe the age of socialism and age of debt vending banks is about to come to an abrupt end. But, you might want to hold off celebrating just yet because the world will have to pay a horrible price for indulging in these terrible practices.
Another title for this post might have been: Recession, Depression, and Who is Best Equipped to Lead Us to Recovery. You will soon see why.
It is completely understandable that we, our leaders, and our would be leaders are focused on America’s economic woes and the coming elections. However, I find it very worrisome that none of our leaders seem to be paying attention to what is going on across the pond. Europe is on the verge of economic collapse and that collapse will be led by Greece. That Greece will default on its debt is inevitable. Germany, France, the European Central Bank, the IMF and the World Bank will do everything possible to prop up Greece one more time. They will only succeed in putting off the inevitable by a matter of months. With interest rates on Greek bonds reaching 40%, there is no amount of austerity and taxing that will allow Greece to survive. Just ask yourself, could the US survive if it had to service its debt at 40% interest?
So, why should we worry about what happens to a tiny country like Greece with such a tiny economy? There are two reasons.
First, banks and institutions through out Europe, America and the rest of the world are holding Greek debt directly or are invested in banks and institutions that are holding Greek debt. We are talking about many billions of dollars. When Greece finally defaults, the ripple effect will be almost immediate. The world will be plunged into another deep recession. There will be bank failures in Europe and probably in the US as well.
Second is the domino effect. There are several European countries that are nearly in as bad a shape as Greece. Portugal, Ireland, and more importantly, due to the much larger size of their economies, Italy and Spain are all in very dire straights. These countries will, sooner or latter, go the same way as Greece. When they do, we’ll no longer be looking at another recession. We will be thrown into another “Great Depression”.
How imminent is the Greek default? John Galt posted an excellent article at the Robbing America blog yesterday that attempts to answer this question.The title of his article is Who Will Defeat Obama In 2012? Greece. This is an article I hope you will take time to read. John Galt always writes in the second person. So it may be that there is more than one person who writes under the same nom de plume, which would explain the use of the personal pronoun “we” in this quote from this article:
We subscribe to the harsh reality that Greece’s prospects of defaulting is not a matter of If, but a matter of When, and that this “when” has a 92% probability of being before November of 2012. We don’t say this capriciously, or out of a hat, we are simply reading what one year credit-default swaps are trading at signaling a 92% prediction of a Greece default.
I commented on their post that I agreed that a default by Greece was imminent and because it was imminent, I hoped it would happen before the 2012 elections. My reasoning is that this should destroy any chances of Obama being reelected. A European financial crisis that drags us all into another deep recession should be the final proof that the socialist policies of Obama are the last thing we need.
The next question that has to be on our minds is: how soon after the greek default will the other dominoes fall? No one knows the answer to that question. It could e a matter of months or it could be a year or more. But make no mistake. The dominoes will fall and when they do the world will experience a horrible economic depression, in my opinion. Socialism will collapse and so will the banks that have thrived on promoting debt as a means of creating money that in variably flows to the bankers. My good friend Brian at the Frankenstein Government blog is quick to say that debt is always paid.; either by the debtor or by the lender. This time the it will be the lenders, the bankers, who pay the debts. But, there is also a horrible price that we as individuals will pay as well. There will be chaos like nothing we have ever seen. There will be violence.
I was about to write the words “it’s not my intention to scare you“; but that would be a lie. It is my intention to scare you. Fear can be a powerful ally. Frear can bring about clear and focused thinking. The problem comes when fear erodes into panic. Panic is our worst enemy.
This leads me to the thrust of todays post. I ask you to assume for the moment that this old man is reading the tea leafs correctly. On that basis, I want you to think along with me about the following: if you knew that the US would be plunged into another deep recession prior to the 2012 elections and that some time after the elections, we and the world will be engulfed the chaos of an economic depression, how would this knowledge affect your opinion of who our next president should be?
Think about this, please! I’m asking you a very serious question. In my opinion, this is the most important question the we should all be thinking about. Who among the current or potential candidates do you think is best equipped to lead this nation out of the scenario I have described? Please use the comment section below to tell us who you think would make the best President and why.
I do not want to influence any body’s thinking; so, I will post an update later this evening with my opinion.
Well, that’s what I’m thinking. What are your thoughts?
Well, it is 6:30 in the evening here in Venezuela and I said I would come back and share my view on which of current or potential candidates would be best suited to lead the country out of a depression back to a sustainable recovery.
First, I very much believe that the scenario I laid out will happen. Greece will default on its debts and plunge Europe and the US into another recession and it will very likely happen before the coming elections. If the US is in another recession before the elections, there is no way Barack Obama will be re-elected. So, whoever the Republicans nominate will be our next President. whoever that is will be far superior to whom we have now. But, is that good enough?
Remember that, in my scenario, sometime after the elections the other European dominoes will invariably fall and that will likely result in a world-wide economic depression. This depression will in part have been brought about by the total debasement of the Euro and the dollar. Things are going to be chaotic. International commerce will be difficult. There will like be food shortages in many parts of the world. There will be violence in the streets including the streets of America. We are going to need a very strong leader. Someone who can stay calm and think clearly. Someone who will seek out the best advise and then act decisively.
Admittedly, some of the candidates I know very little about; like Santorum, Huntsman and Johnson. So I have ruled them out for now. For me, Romney is a non-starter. Newt Gingrich, the same in my book. I was underwhelmed by Rick Perry in the debate last night. That leaves me with Bachmann, Paul and Cain among the current candidates and from the potential candidates I have to include my personal favorite, Palin.
Let’s look first a Ron Paul. Because of his comments on 9/11 and his views on the military and foreign affairs, he will never get the Republican nomination. However, of the four on my short list, he is by far the most qualified to deal with the monetary and fiscal mess we are going to find ourselves in very soon. So, I hope whoever we elect to be our next President that they will consider Ron Paul for their Secretary of the Treasury. If not Ron Paul then some other libertarian Austrian economics expert because that is what we are dearly going to need.
I’m now down to Bachmann, Cain and Palin. I like all three of these candidates but I like Cain and Palin best because I think they know how to work well under pressure and this is a quality, under my scenario, that the next President is going to need. I just don’t know how Bachmann would do in what I can only describe as a pressure cooker.
Now the moment of truth. My logical brain says I should go with Cain but my instincts tell me I should go with Palin. So, although I am still open-minded, I’m going to go with Sarah Palin at this time.
So come on and tell me why I’m wrong, or do you agree with me?