One of these things is not like the others….
One of these things is not like the others….
This weekend, this happened:
Obama was deeply concerned, but he was a little busy…
… So he didn’t say too much.
First sunny day in a looooong time!
Brought to you By Sprecher: The King of sweet brewed Wisconsin soda
All Natural Old Fashion Root Beer
Small Batch Puma Kola
Honey Cream Soda
You gotta love iPhoto.
Reading on the balcony
NUb. It’s what’s after dinner.
Never ashed, always tasty.
From our window
Obama said that the economy and unemployment would be worse “if we were to do nothing,” and they prepared this chart to show how they were right. According to them, unemployment would peak sooner, shallower, and drop more rapidly by instituting their economic programs than if we were to do nothing at all and let the economy recover on its own. Well, well, now after 4 or 5 months of Obama’s plan in action, look at the numbers:
Unemployment is not only worse than predicted by Obama’s team with his programs in place, unemployment is worse than what Obama’s team projected it would be if we had done nothing!
Now, let’s put two and two together: Look at the Laffer chart of the spike in monetary supply:
“With the crisis, the ill-conceived government reactions, and the ensuing economic downturn, the unfunded liabilities of federal programs — such as Social Security, civil-service and military pensions, the Pension Benefit Guarantee Corporation, Medicare and Medicaid — are over the $100 trillion mark. With U.S. GDP and federal tax receipts at about $14 trillion and $2.4 trillion respectively, such a debt all but guarantees higher interest rates, massive tax increases, and partial default on government promises.
But as bad as the fiscal picture is, panic-driven monetary policies portend to have even more dire consequences. We can expect rapidly rising prices and much, much higher interest rates over the next four or five years, and a concomitant deleterious impact on output and employment not unlike the late 1970s.
About eight months ago, starting in early September 2008, the Bernanke Fed did an abrupt about-face and radically increased the monetary base — which is comprised of currency in circulation, member bank reserves held at the Fed, and vault cash — by a little less than $1 trillion. The Fed controls the monetary base 100% and does so by purchasing and selling assets in the open market. By such a radical move, the Fed signaled a 180-degree shift in its focus from an anti-inflation position to an anti-deflation position.
The percentage increase in the monetary base is the largest increase in the past 50 years by a factor of 10 (see chart nearby). It is so far outside the realm of our prior experiential base that historical comparisons are rendered difficult if not meaningless. The currency-in-circulation component of the monetary base — which prior to the expansion had comprised 95% of the monetary base — has risen by a little less than 10%, while bank reserves have increased almost 20-fold. Now the currency-in-circulation component of the monetary base is a smidgen less than 50% of the monetary base. Yikes!”
~ Arthur Laffer
Some people are predicting the US in 2010 or 2011 having the greatest depression ever seen, period. This “Greater Depression” will make the “Great Depression” look like a stroll in the park. Unemployment will skyrocket to 30-40%, Inflation will be well over double digits, and interest rates will be through the roof. Let’s all HOPE they’re wrong.
Americans’ net worth shrinks $1.33 trillion in 1Q
Jun 11 12:19 PM US/Eastern
By JEANNINE AVERSA
AP Economics Writer
WASHINGTON (AP) – American households lost $1.33 trillion of their wealth in the first three months of the year as the recession took a bite out of stock portfolios and dragged down home prices.
The Federal Reserve reported Thursday that household net worth fell to $50.38 trillion in the January-March quarter, the lowest level since the third quarter of 2004. The first-quarter figure marked a decline of 2.6 percent, or $1.33 trillion, from the final quarter of 2008.
Net worth represents total assets such as homes and checking accounts, minus liabilities like mortgages and credit card debt.
The damage to wealth in the first quarter came from the sinking stock market. The value of Americans’ stock holdings dropped 5.8 percent from the final quarter of last year.
Another hit came from falling house prices. The value of household real-estate holdings fell 2.4 percent. Collectively, homeowners had 41.4 percent equity in their homes in the first quarter. That was down from 42.9 percent in the fourth quarter.
The latest snapshot of Americans’ balance sheets was contained in the Fed’s quarterly report called the flow of funds.
Despite the drop, the speed at which net worth shrunk slowed to start the year. During the recession’s deepest point in the October-December period, Americans’ net worth fell 8.6 percent, according to revised figures.
With wealth declining and unemployment rising, there are questions about how consumers—the lifeblood of the economy—will behave in the coming months.
If they continue to spend, even at a subdued pace, the recession likely will end this year as predicted by Fed Chairman Ben Bernanke and other economists. However, if consumers hunker down and cut spending again, that could delay any recovery. In the final quarter of last year, Americans slashed spending at an annualized rate of 4.3 percent, the most in 28 years.
Still, there was some encouraging news on consumer spending Thursday.
Retail sales rose 0.5 percent in May, following two straight monthly declines, the Commerce Department reported. Meanwhile, the number of newly laid-off workers filing for unemployment benefits fell last week by 24,000 to 601,000, the lowest level since late January.
All this of course will simply be fixed by Nationalizing Health Care.