For the last week or so the economic news from around the world has been all bad. A large part of Europe is in recession and here at home our GDP can’t even make 2%. The slow down in Europe and in the US is affecting negatively the growth rates in China, India and, Brazil. predictably, the result was that stock markets around the world all took a bath. So, WTH happened yesterday? Stock markets everywhere went up big time. Here the Dow-Jones was up nearly 287 points. Did you hear any good news in the last two days to explain this sudden surge in stock prices? Nope. There wasn’t a peep that could explain what happened. AZ Leader at Inform the Pundits claims that is precisely why the markets surged. There wasn’t any more bad news and that was taken as good news. AZ discounts what other pundits are saying that it is rumors that the central banks of Europe and the US are planning more monetary easing (a euphemism for turning on the printing presses). Me, I’m inclined to go along with the other pundits.. Let’s take a quick look at what is going on in the worlds two biggest economies.
For two years now it seems as the news is dominated by the latest crisis to threaten the unity if the European Union. There always seems to be one or more PIIGS (Portugal, Ireland, Italy, Greece and, Spain) in trouble. Spain, with their troubled banks, is the one in the spotlight right now. Trying to follow what is going on in the EU can be confusing with all their alphabet soup os institutions and funds. All the different schemes being tossed around by TPTB in the EU amount simply to this: socialize (redistribute) the debt from the insolvent to the solvent and socialize (redistribute) the wealth from the rich member countries to the not-so-rich member countries. Why would the prudent rich countries of Europe agree to such nonsense? It’s insane! Why would disciplined Germans agree to work until age 67 just so Greeks can retire at 50? It’s insane! But, my guess is that some form of the proposed insanity will prevail. The insanity will continue until reality decides to give them the final smack down. When will that happen? Nobody knows. Reality is sometimes slow to make its stand.
The recession in Europe is undoubtedly having a negative effect on our economy , in as much as 25% of our exports are destined for Europe. But, the turmoil in Europe also has a positive impact on the US economy. Because Europe is in worse shape than we are, our dollar, in spite of previous Quantitative Easing by the Federal Reserve, is staying strong relatively speaking. And, more importantly, our bonds remain the only safe haven and that means our government can borrow more money at very low interest rates. But that is the only good news on our economic scene. The much manipulated unemployment rate is now up to 8.2%. Our GDP is below 2%. Our workforce participation rate keeps falling. The housing market keeps sinking. (BTW, has anybody heard what is happening with our commercial real estate bubble? I haven’t heard a thing. There has to be a lot of banks sitting on piles of troubled assets.)
So, what have our boys and girls in the two houses of Congress been doing? A whole lot of nothing mostly. That’s a good thing. Because when they do something, it usually cost us either our money or our freedoms. But, the Executive Branch, under the tutelage of our world-class Community Organizer, Barack Obama, never rests. We know that the Obamites are doing everything possible to drive up our cost for electricity by forcing utilities to use more and more so-called renewable energy. We know that the Obamites are causing the shut down of coal-fired power plants and coal mines themselves. They are even molesting a small company like Gibson Guitars. The Obamites at the Labor Department are getting ready to issue an edict compelling government contractors to adapt a 7 percent hiring quota for disabled job applicants. We know that the Obamites are planning to spend $1.4 billion to buy private land and conserve it for “future” generations. Here is one you will like. Animal rights activist have gotten a bill introduced in the Senate which would require them to phase out conventional cages for egg-laying hens and transition to a system called “enriched colony cages” by 2029, at a cost to U.S. egg producers ranging between $4 billion to $10 billion . You don’t mind paying twice as much for eggs, do you? (You also might be interested in seeing what the animal rights folks are up to in that most insane state of California.)
Okay. Here’s my point. An increasingly bad economy is working against Obama’s reelection chances. And yet, he continues to do things that can only hurt the economy more. This is pure unadulterated insanity. INSANITY RULES! I don’t know when reality will step up to the plate in Europe; but. I am sure hoping reality shows up here in the US this coming November.
Well, that’s what I’m thinking. What are your thoughts?