M
manny15
Guest
A WORD ABOUT THE AMERICAN ECONOMY
remember that the incoming President inherited a fragile geopolitical landscape, record budget deficit and massive Treasury debt, more than half of which is held by foreigners. While efforts at job creation will result in more cash in people?s pockets in the short run, this cash will be worth less and less as the government borrows more and more. In contrast, sustainable and realistic solutions require an overall reduction of government influence as the US takes the ?medicine? of time and needed adjustments to reach a genuine economic healing.
The underlying problem in the US is that the nation has no sufficient savings to support sound lending. Our addiction to credit, driven, as it were, by greed, selfishness and fear, has generated an unmanageable fiscal crisis. Debt has become a major player in our economic character, so much so that it is now tipping the scales and jeopardizing the fragile balance of our entire fiscal-based economy. While ?experts? try to manage this critical imbalance by tweaking interest rates, taxes and entitlement programs, they remain ignorant of the fact that savings and debt, like gravity or seasonal climate changes, are unchangeable and inescapable universal laws that cannot be ignored without consequences.
Desperately attempting to fix the fiscal troubles and ease public concerns not only in the US but across the world (where the US dollar is still the main currency of reserve), the Federal Reserve is actually creating more imbalances, only prolonging the inevitable. At the end of the day, their only option is to print more currency, therefore inflating and weakening the dollar.
MEDICINE IS RARELY SWEET
A healthy economy, whether national or personal, needs a savings pool proportionate to its debt pool. Our national leadership should encourage people to save money while rewarding productivity in the private sector. This includes raising interest rates to reward savings, reducing government spending, and cutting taxes in order to rebuild the American economic system from the inside out. This may be a bitter pill to swallow in the short run, as most medicine is, yet it is the only sustainable way forward.
If liberal economic policies, however, will continue injecting loose money into the economy, inducing more debt rather than allowing savings and obligations to align, the US will need to brace for a potential system shock and even a monetary collapse. In other words, if the government continues to infuse ?fiscal drugs? into the sick markets in order to mask the real symptoms of unchecked greed, massive debt, and widespread corruption, rather than addressing the disease, the likelihood of a major system collapse increases.
Should this play out (and we are not certain that it must), international markets and currencies will follow the US in this great shaking. As a result, the global balance of powers could fragment into four primary regions: North America, Europe, Asia and the Middle East, generating increasing social unrest, economic hardships, and geopolitical conflict, creating a greater occasion for a One World Government which many already espouse to.
In fact, as we write these words, high level discussions are being held regarding the formation of ?global governance? (including international taxation and a global TV channel) by the World Economic Forum (WEF) that is meeting in Switzerland these very days. The WEF is not an official government group but does include more than 100 government, corporate and labor leaders in this group of ?strategic global partners? who meet annually.
This is not the scenario we wish for. Yet, an honest look at the snowballing imbalances that continue to plague our economy shows that they have to be resolved one way or another. The US will either experience a fundamental correction in the very spirit and values of its socio-economic behavior, or will experience a system collapse. Herein lie the critical issues we all face as our troubled, leaderless world, gropes through this increasing darkness.
remember that the incoming President inherited a fragile geopolitical landscape, record budget deficit and massive Treasury debt, more than half of which is held by foreigners. While efforts at job creation will result in more cash in people?s pockets in the short run, this cash will be worth less and less as the government borrows more and more. In contrast, sustainable and realistic solutions require an overall reduction of government influence as the US takes the ?medicine? of time and needed adjustments to reach a genuine economic healing.
The underlying problem in the US is that the nation has no sufficient savings to support sound lending. Our addiction to credit, driven, as it were, by greed, selfishness and fear, has generated an unmanageable fiscal crisis. Debt has become a major player in our economic character, so much so that it is now tipping the scales and jeopardizing the fragile balance of our entire fiscal-based economy. While ?experts? try to manage this critical imbalance by tweaking interest rates, taxes and entitlement programs, they remain ignorant of the fact that savings and debt, like gravity or seasonal climate changes, are unchangeable and inescapable universal laws that cannot be ignored without consequences.
Desperately attempting to fix the fiscal troubles and ease public concerns not only in the US but across the world (where the US dollar is still the main currency of reserve), the Federal Reserve is actually creating more imbalances, only prolonging the inevitable. At the end of the day, their only option is to print more currency, therefore inflating and weakening the dollar.
MEDICINE IS RARELY SWEET
A healthy economy, whether national or personal, needs a savings pool proportionate to its debt pool. Our national leadership should encourage people to save money while rewarding productivity in the private sector. This includes raising interest rates to reward savings, reducing government spending, and cutting taxes in order to rebuild the American economic system from the inside out. This may be a bitter pill to swallow in the short run, as most medicine is, yet it is the only sustainable way forward.
If liberal economic policies, however, will continue injecting loose money into the economy, inducing more debt rather than allowing savings and obligations to align, the US will need to brace for a potential system shock and even a monetary collapse. In other words, if the government continues to infuse ?fiscal drugs? into the sick markets in order to mask the real symptoms of unchecked greed, massive debt, and widespread corruption, rather than addressing the disease, the likelihood of a major system collapse increases.
Should this play out (and we are not certain that it must), international markets and currencies will follow the US in this great shaking. As a result, the global balance of powers could fragment into four primary regions: North America, Europe, Asia and the Middle East, generating increasing social unrest, economic hardships, and geopolitical conflict, creating a greater occasion for a One World Government which many already espouse to.
In fact, as we write these words, high level discussions are being held regarding the formation of ?global governance? (including international taxation and a global TV channel) by the World Economic Forum (WEF) that is meeting in Switzerland these very days. The WEF is not an official government group but does include more than 100 government, corporate and labor leaders in this group of ?strategic global partners? who meet annually.
This is not the scenario we wish for. Yet, an honest look at the snowballing imbalances that continue to plague our economy shows that they have to be resolved one way or another. The US will either experience a fundamental correction in the very spirit and values of its socio-economic behavior, or will experience a system collapse. Herein lie the critical issues we all face as our troubled, leaderless world, gropes through this increasing darkness.
