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The iron fist in the velvet glove is back
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by Mr. Chuckles, Unknown News
Sept. 21, 2007
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| | PREFACE: I debated sending this. And yet it is what
I believe, my hyperbole aside.
This is vitally important
stuff for low-middle and poor people to learn
about because during the next decade the Economic Misery
Index is going to rise dramatically, regardless of who
is elected President in November, 2008.
The Democrats
would be well advised not to nominate Hillary Clinton,
because in the catastrophes to come she would become as
unpopular as George W. Bush is today. There are
more than 50 million people who do not vote -- now -- who would become highly motivated to vote just to ensure that Hillary does not get re-elected in 2012. I do not know anyone who likes her now, and that will not change. Hearing her voice is like salt in an open wound. The people of the South and Mid-West, in particular, will grow to loathe her and the Democratic Party, just as people in the anti-war movement already do. She will be unable to govern, in my opinion, much less rule. |
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I found this at WRH: Bernanke panics by 'launching a nuclear missile into the financial system'. I'm not familiar with Marc Parent or his weblog, but the author, Mike
Swanson, is familiar to me, and the article quotes two other
articles I have read recently. So it is good to look
into...
Here is the controversy, in a nutshell. With the US dollar
index below 80, oil above $80 a barrel, gold above $700,
stocks very close to their all time highs (not inflation
adjusted), plus unemployment at 4.6%, factory utilization
at 81%, year over year CPI above 4% (core CPI of 2%), it is
very hard to justify *cutting* interest rates on purely
economic grounds. All other things being equal, an increase
in rates might even sound rational.
BUT respected individuals, such as some bloke named
Schiller (with an index named after him), are predicting a
20% decrease in home prices -- which have only fallen about
3% so far nationally. In fact, since home prices doubled
(approx.) in the last 5 or 6 years and real (inflation
adjusted wages) stayed the same (approx.) during that time,
it makes sense that home prices must fall -- or else who
can afford to buy them? (And how many homes does a richie
need?)
A 20% decrease in home prices would be a real disaster for
a lot of people and corporations. If we are seeing global
chaos after a mere 3% decrease in US home prices, then
imagine the effects on millions of people and thousands of
corporations upon learning that their investments ARE
WITHOUT VALUE -- or even negative!
[AND YET...ironically, a 20% decrease in real estate prices
would benefit people who don't own homes already, so once
again we see the work of the Iron Fist in the Velvet Glove
pounding the faces of the poor people they claim to serve
as "public servants" -- just as they have driven
skyrocketing healthcare and college tuition prices with
their "helping hands".]
In effect, as Mike Shedlock points out, Fed Chairman
Bernanke is declaring war on savers and the U.S. dollar
itself. Wealth is now being redistributed from widows and
orphans (and China) to homeowners and corporations. This is
Robin Hood in reverse -- whatever it is, it is not "free
market capitalism". That is a dead letter just like the
Bill of Rights.
It is not unreasonable to believe that the U.S. dollar
index will fall by 50% from here (now at 78 something)
during the next two to three years. That will be
extremely damaging to the poor of America assuming that
they eat food, shelter indoors at night, and do things like
wear clothes, use energy to stay warm in the winter, and
buy stuff for their children.
But Bernanke is not the real
villain here. He is another willing dupe, another ass clown
appointed by Bush to clean up one more unimaginable mess
and ultimately take the blame. (Congress, Greenspan, Bush
and Bernanke will all end up with shared blame for what is
to come -- though I expect Bush to just put on his smirking
"I am just a happy-go-lucky retard doing God's Work" face
and blame everyone else.)
At this moment Bush and Congress are promoting mortgage
bail-out plans to "help" people (read, "help Wall Street".)
So together with these bail-outs, Bernanke's rate cuts, and
a fall in the value of the U.S. dollar, it seems likely
that a compromise or "middle ground" will be reached.
In
effect, what will happen will be that the path of least
resistance will be followed, just as water and shit flow
downhill. Maybe house prices fall by only 10%, and the
dollar falls by only 25%, and inflation only rises to 6%,
and only two million people are foreclosed on, yada yada.
(And your new landlord will speak Farsi or Mandarin, and
your supervisor at McDonalds will speak Mexican...)
The only wild card in this middle ground hypothesis is
World War III, and because the Bush Regime has to date
blindly followed every compulsion to act without regard for
side-effects or contradictions, we cannot ignore the real
likelihood that the U.S. will be "at war" for many years to
come -- and that is, in the long run, impoverishing to the
participants.
Stay tuned. This promises to be *interesting*, though in a
bad sort of way... and may take a few years to play out, so
stockpile plenty of popcorn, chips and dips!
© by the author.
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It is not unreasonable to believe that the U.S. dollar
index will fall by 50% during the next two to three years.
That will be
extremely damaging to the poor of America assuming that
they eat food, shelter indoors at night, and do things like
wear clothes, use energy to stay warm in the winter, and
buy stuff for their children.
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