Many people sighed with relief the other day when it was announced that the EU would bailout the banks of Spain with $120 billion at 3% interest. Well, the markets and credit rating agencies were not impressed. In today’s news we learn that Moody’s down graded Spain three notches to near junk bond level and Spain’s ten-year bonds went to 7.1%. Very dangerous territory, my friends. On top of that, Italy’s three-year borrowing costs spiked to 5.30 percent
Think about the insanity of this bailout of the Spanish banks for just a minute. Spain is on the hook for this loan to the banks. Are they going to have to borrow money at something nearing 7% to repay the 3% loan? And further more, where does this bailout money come from? It comes from the nation members of the Euro Zone, which includes the other PIIGS (Portugal. Ireland, Italy, and Greece). Are they supposed to go out and borrow money at high interest rates to loan it to Spain at 3%? Take a look at this short video of Nigel Faarage. It’s a gas!
H/T to Frankenstein Government
Of course, the real burden falls on Germany and the Scandinavian countries. This humble observer continues to believe that the single currency Euro was a bad idea from the start and the only way the Euro Zone can survive is if it becomes the United States of Europe under one government. Since that is not likely to happen, the Euro Zone will come undone, in my opinion. Hang on to that thought and I will return to it in a moment.
The economic woes do not just lay with the Euro Zone. It is a world–wide phenomena. The fiat currency system of the world’s central banks is in jeaprody. For those that are interested in learning more, I have some suggested reading for you. On 9 June, Steven Hayward at Power Line wrote about the economic downturn in China. Then the next day he wrote a similar article about India’s slowdown. I’m pretty sure that Hayward could write about the same thing about Brazil. For a broader view, you really need to read this article at Zero Hedge. It starts with this little gem:
A Loss of Credibility
Once at a social gathering, Gladstone said to Disraeli:
“I predict, Sir; that you will die either by hanging or of some vile disease“.
“That all depends, sir, upon whether I embrace your principles or your mistress.”
I’m reminded of that photo of George Bush with the caption “Do you miss me yet?” I picture the photo being the United States asking China: “Do you miss US yet?”
So, what does this all mean for the United States of America?
Well, it could be very bad indeed. But, it doesn’t have to be as bad as most people think.
I recently asked a friend, at his blog , if he thought it would be better for the EU to crash on Obama’s watch or on Romney’s watch? (Yes, I think Obama is going to get creamed in November.) The reason for my question was that I used to think that when the EU dominoes began to fall it would be like going over a cliff. I didn’t want that to happen on Obama’s watch because I didn’t trust him and the Fed to do the right things. Now I see the EU sliding into the abyss on a long toboggan run. And now, I would prefer that the EU start their slide on Obama’s watch because maybe it will inspire Romney and the Republicans to come up with a more aggressive plan to right our economic ship. Allow me to share my dream of how America could demonstrate its Exceptionalism once more and lead the world back to economic sanity.
America is unique in many ways. Among them is our ability to produce all the food we need and much more, thanks to fracking technology we have the ability to be energy independent, and we have the ability and capacity to produce any products our citizens want or need at some price. I can’t emphasize enough how important it is for America to become energy independent no matter how low oil prices fall. And oil prices will continue to fall in spite of the desire of Hugo Chavez to see oil at $200 per barrel. If American starts down the road of energy independence and uses the royalties from production on federal lands to pay down our debt, if corporate taxes were reduced not to 25% but to 15% or less, if capital gains taxes and death taxes were reduced to zero, if all of our entitlement programs are reformed, and if the noose over regulation of our businesses was removed, the whole world would want to invest in America. America is in a unique position to lead the world to economic sanity. My dream includes putting an end to Federal Reserve notes and return to Treasury issued Silver Certificates; but that is probably more fantasy than dream. Will Romney and th Republicans make my dream come true? They could. They really could if they have the will to do it.
Well, that’s what I’m thinking. What are your thoughts?
28 thoughts on “The World Is In A World Of Hurt”
Oh my…that Disraeli quote is priceless!! Love that. I also love all of your “if’s!” IF only the behemoth known as the U.S. government would listen to you, Jim. I’m beginning to think people who seek power via elected office are charactistically flawed somehow to begin with…so trying to fix that is a futile effort. It’s so hard to believe that common sense and moral compass is so far lacking that we can’t do better than this. All nuts, except for a few.
That is a lot of “ifs” I must admit. But, it is not rocket science, is it, Cheryl? To me it is perfectly clear what needs to be done.
“It’s so hard to believe that common sense and moral compass is so far lacking that we can’t do better than this.”
We humans can be a sorry lot at times and these are some of those times.
I love how Farage starts out by throwing everyone under the bus. It’s great theater but if you look at the people listening- nobody seems to care much. In fact, that level of apathy is evident everywhere there and here.
For Cheryl’s sake, I have an FBI profiler piece wherein the profiler states that murderers and politicians share many of the same personality traits. Including narcissism. Good stuff if you want the link…
If we had a few people like Farage in our Congress, C-Span’s ratings would go way up.
By all means, give us the link to the FBI profiler piece. It sounds like it would be an interesting read.
Thanks, FG….but my disillusionment quota has hit its limit this week. LOL I don’t doubt what you say. Just lamenting that truth. Cheers!
I heard Steve Forbes on Bill Bennett this morning, and he doesn’t think that a Euro collapse spells doom for us. It wouldn’t be good, but it would not collapse us as well.
What upsets me (and I hear the smart guys saying it in places Like Forbe and Bloomberg) is that we are propping up a rotten banking system that got us into this mess. We had an opportunity to knock the damned thing down, or at least let it collapse of its own weight, so that something real could supplant it, but we blew it.
We are feeding a hydra-headed monster now, and it will eventually devour us.
If we had not done TARP and not done “stimulus” Obama style, our economy would be roaring by now. And now, our central bank and all the others want to do the same thing for the banks of Europe. Unbelievable!
These latest twists in the European debt crisis are disturbing to say the least. Clearly, the 100 billion euro bailout of Spain has not helped one iota. If anything, its continuing downhill.
Things in Europe are gonna get a lot worse before they get better. The EU is already in recession. That does not bode well for the United States and the rest of the world.
Oh… don’t forget France… they are the #2 contributor behind Germany in all EU bailouts.
“Oh… don’t forget France… they are the #2 contributor behind Germany in all EU bailouts.”
And Hollande has announced that the retirement age will be reducer to sixty. It’s the only socialy just thing to so, don’t you know?
Love the Disraeli quote.
“thanks to fracking technology we have the ability to be energy independent”
I know that you know, but when it comes to the production of electric power in the USA, we are energy independent. Only about one percent of the electric generators are fired with oil.
The only problem is that pesky oil stuff. Oil runs our transportation sector, and makes asphalt roads possible.
On the positive side, we can fuel a good bit of our transportation industry (trucks and buses) on natural gas, right now. In 1996 the Metro Atlanta Rapid Transit System converted all their buses over to run on natural gas. This was supposed to be an energy showcase during the Atlanta Olympics. Natural gas is a natural.
Once we start using other than oil for our transportation, the supply/demand equation for oil will change drastically. This is conceptually not hard to do, especially if Obama gets his head our of his ass.
Most critically, we need to throw out the environmental butt kissing liberals so that we can make this country great, once again. It will not be that hard to do. You just have to do it without Democrats.
Changing out transportation over to natural gas would be a major boon for our economy. I did a post about a month or so ago. Opening up federal land for the development of oil and gas would do severa things for us:
1.) Once the oil and gas is flowing, experts estimate the royalties to the government would be about $1.2 trillion per year. That money could be applied to our debt without raising taxes.
2.) Converting transportation and coal-fired power plants to natural gas would us the lowest cost energy possible.
3.) The US woukd become a net exporter of oil and coal. Think what that would do to our trade imbalance.
We need to shut-down the EPA (firing everybody) and start over with an Environmental Solutions Agency like Newt Gingrich suggested.
Bring back the gold standard for starters. But even though the U.S. has tons of natural resources we have neither the will nor the energy (no pun intended) to get to it. The high priests of the Caste of the Green Religion will have us all using candles before long.
“the Caste of the Green Religion ” Theu may be the worst terrorist threat we face.
My hunch is that the Clinton’s would love to see Romney win and take the fall. Lucky us, she returns in 2016.
Hillary may have some competition in 2016. There was an article in the Chicago Sun Times a while back that said that Rah, Enmanuel is pkanning to make a run for the presidency in 2016. Oh Boy!
Oh good. The Queen of Global Socialism and the King of Chicago Mob Rule. (Not to mention the Emanuel brother who kills babies and old people with the “Complete Lives System.”) Maybe they will run together and we will all be thrown under the bus. What a dynamic duo that would be. When do we get to get rid of the Clintons? PLEASE!!
The Clintons are a curse, aren’t they?
Jim, I subscribe to your economic platform for President. You will be surprise to see soon in how many ways it matches the one from Romney – reducing corporate taxes, capital gains taxes and death taxes, plus increasing the domestic oil production and reducing regulation. Plus one more that you forgot, keeping dividend taxes at 15% and reducing marginal individual rates. Plus abolishing Obamacare.
As far as Europe is concerned I agree with you that it can all explode, but I would like to remind you of the immense ability of European nations to procrastinate, muddle through and kick the can down the road. It is not Spain who will decide it, but Greece this coming Sunday. Not immediately but in the weeks of negotiations that will follow an election that will decide not to decide (nobody will get a clear win). Stay tune!
At any rate, they won’t get out of the rot before November by which they will graciously handle the election to your soul mate in economic policy – Mitt Romney. (I knew you were faking it with all that Ron Paul cheering)
My soul mate? That may being going a tad far, John. 🙂 The jury is still out on Mr. Romney. I once lived in Missouri.
Yes – “soul mate” – I got carried away. After reading your presidential economic platform I thought that maybe you were a secret advisor to Romney.
For now let it suffice to know that you are going to vote for Romney. We will bring you into full membership during his first presidential year.
Well, if Romney and the Republicans make my dream come true, I’ll sign on with no qualms, John.
Look a Farage video to brighten my day.
If Romney were to get rid of the Fed, he’d be dead by the next day. That’s the reality we’re living in. We like to put all the onus of our angst on individuals, because behind the scenes, there are scores of unaccountable groups and committees no one has ever heard of running all these “policies”.
Yeah, Romney ain’t going to be getting rid of Obamacare -dream on. The banksters have been working for decades to socialize the medicine in this country -since LBJ. Controlling the means of production in regard to health care means it has to be government administered. They took a Fabian approach, using liberals, oh and Mitt used to be one. Just reminding everyone so you don’t get totally disappointed when he doesn’t do a shred of what you want.
Interesting you put it that way, RM. I’ve read that is what happened to JFK…trying to get rid of the Fed and ….BAM…that was the end of that.
We could use a few congressmen and Senators like Farage, couldn’t we?
RM, I was not aware that it was “banksters” that have been forcing socialized medicine.
Secondly, Andrew Jackson showed us the need for a central when he destroyed in in the early 1800’s. I don’t necessarily like what we have, now, but what are the reasonable alternatives?
As far as the Romney thing goes, he is what he is and I don’tI know of anyone who is fooled into thinking he is the conservative’s conservative. He is what we have, and I will go with that. I was disappointed in GW Bush, too, because he never vetoed any of the outrageous spending bills. But, we are in a lot more trouble with the Demo’s driving the boat.
America is the best positioned to recover from economic woes like this because not only are you more free than the rest of the world, culturally Americans are less dependent on government than the rest of us. More Americans despise government than like it and that’s a good thing because governments can’t fix this mess.