This morning Mort Zuckerman summed up the economy very well in the Wall Street Journal. Americans are paying down (or defaulting on) debt and attempting to increase their savings in light of the recent recession. A significant, but often overlooked cause of the bubble, cash outs of home equity, have fallen by 90% since bubble times. Even in light of all the money being printed by the Federal Reserve, Americans can’t get or don’t want credit.
However, all that money pumped into the tank of the American economy is causing inflation. Have you bought gasoline lately? Prices of most commodities are well above what they were last year at this time. Interest rates are going to have to go up, and then watch the consumer get clobbered.
Business owners who are aware of the situation will slash payrolls; those who aren’t might lose their businesses. As jobs are lost and businesses close, many those out of work will face housing foreclosures The Federal Reserve will be forced to fire up the presses (oops, I mean begin digital transfers of money) again, even though inflation is accelerating.
Meanwhile, the dollar is cratering and will continue to do so as the Fed artificially produces an oversupply of the fiat currency. I am on my way to Switzerland to open a bank account, and, let me tell you, you would not believe the prices for Swiss goods in dollar terms. Let me be clear, the dollar is in free fall.
The Fed is expropriating American citizens. Wealth is literally being stolen from savers and shifted to the government and the big banks. That’s how inflation through printing money works. Imagine dollars are shares of a company. You’ve saved a lot of them, so you own a big part of the company. Then the company decides to offer new shares to only certain shareholders, and you’re not one of them. The company still owns the same assets, but now your share is diluted and some of your claim on the assets has been arbitrarily given to others. That’s how the Fed is operating today. It is giving the government and the big banks your share.
The government is supposed to protect your share, yet Congressman John Boehner and his GOP cohorts are acting as though nothing is happening. The GOP allowed the passage of a continuing resolution two days ago that will fund the creation of the unconstitutional Obamacare program. That’s not what Americans were voting for in November. Mr. Boehner and the House Republican leadership need to be replaced with those who have the guts to stop business as usual.
At the same time, the gentleman in the White House doesn’t know whether he is on foot or horseback. The rotten leadership from the White House creates more questions and turmoil for America than it is solving. What is the direction of U.S. efforts in Afghanistan, Libya, Japan, the economy, the Federal Reserve, the Supreme Court, immigration? There isn’t any guidance coming from the president. But ask him what his picks are for the NCAA championship bracket, and he’ll show up on ESPN to tell you.
America is a rudderless ship, captained by an individual who knows not how to swim. Can anyone explain to me why Mr. Obama deserves to be president? What a nightmare. And things are unraveling at light-warp speed. This is going to have an end worse than even I have previously projected. It is time for The Founders Party. America needs a wholesale revamping, and the makeover is not going to be pretty, because we have given the politicians in Washington decades to screw things up. Now it is payday.
If you’re willing to fight for Main Street America, click here to sign up for my free weekly email.
