Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Social Mood and Leaders Impact on General Election Forecast 2019 - 9th Dec 19
Long-term Potential for Gold Remains Strong! - 9th Dec 19
Stock and Financial Markets Review - 9th Dec 19
Labour / Tory Manifesto's Impact on UK General Election Seats Forecast 2019 - 9th Dec 19
Tory Seats Forecast 2019 General Election Based on UK House Prices Momentum Analysis - 9th Dec 19
Top Tory Marginal Seats at Risk of Loss to Labour and Lib Dems - Election 2019 - 9th Dec 19
UK House Prices Momentum Tory Seats Forecast General Election 2019 - 8th Dec 19
Why Labour is Set to Lose Sheffield Seats at General Election 2019 - 8th Dec 19
Gold and Silver Opportunity Here Is As Good As It Gets - 8th Dec 19
High Yield Bond and Transports Signal Gold Buy Signal - 8th Dec 19
Gold & Silver Stocks Belie CoT Caution - 8th Dec 19
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

Nation Building Should Begin At Home

Politics / US Politics Jan 21, 2010 - 07:33 AM GMT

By: Richard_C_Cook

Politics

Best Financial Markets Analysis ArticleI have been writing for the last two years or so that the strategy of the Federal Reserve has been to engineer a “soft landing” from the horrendous financial bubbles that were created during the disastrous presidency of George W. Bush. Since President Obama came to power in January 2009, his administration has been partners with the Federal Reserve in trying to do this.


It’s nonsense for anyone to say that the crash of 2008 had not been foreseen. A number of analysts, myself included, were predicting a crash by mid-2007. Actually, it was apparent that a serious decline would take place by the end of 2005 when the U.S. economy was still dependent on housing for half its growth over a year after the Federal Reserve had begun to raise interest rates. By early 2008 the economy was officially in a recession, though I actually dated it to December 2006 when the money supply measured by M1 became stagnant. That meant that consumer spending wasn’t even keeping up with inflation.

Now, over the last year, the recession has begun to bottom out due to the huge quantities of credit injected by the Federal Reserve into the failed banking system and by the relatively undersized economic stimulus asked for by President Obama and approved by Congress. A “recovery” has been declared, with stock prices making up for about half their previous losses, even though the official (and understated) unemployment rate is not likely to fall below 9.5-10 percent for the foreseeable future.

The current uptick has been projected by some analysts to continue through May-June 2010, when we will be in danger of another downturn that could be quite serious. Obviously the Democrats will be doing what they can to bolster confidence, at least until the 2010 Congressional elections.

The Republicans, with the victory of their candidate Scott Brown in the race for the late Ted Kennedy’s Senate seat in Massachusetts, are jubilant, even though they have absolutely nothing to offer as an alternative. How soon we forget that it was Republican policies, starting with Reaganomics and ending with the George W. Bush catastrophe, that has been the prelude to where we are today.

The prognosis for the U.S. economy is dim. From a larger perspective, we are at the end of the era of Keynesian economics, when the government thought all it had to do was run up more debt to stimulate the economy. When you add to that a generation of outsourcing of manufacturing jobs abroad, completely irresponsible and out-of-control behavior by the financial industry, and the cancerous growth of the military-intelligence-industrial complex and their pet wars, you have all the signs of an empire in precipitous decline.

For those who are habitually against everything the government does, I’d like to say that there are actually a few caring and intelligent people in authority these days who don’t want to see the total collapse of the U.S. as a nation, an economy, and a society. The U.S. remains the world’s largest consumer economy and the dollar the predominant currency. But the rest of the world has caught up. The Anglo-American Empire is seeing the sunset, and the choice now to be made is whether it will end peacefully or in a bang.

We can all hope for a peaceable conclusion, though it will take patience and hard work for the U.S. even to become a functioning economy on the same level as the rest of the world’s developed nations. So we can hope that the “soft landing” will work. But we still have a gigantic debt load to deal with, amounting to $60 trillion from all sources–business, government, and consumer.

We also have a gutted manufacturing sector, the huge overhead of a bloated financial industry (and their obscene bonuses), bankrupt governments at all levels, and way too many people with no real work to do like lawyers, health insurance executives, national security analysts, financial and educational bureaucrats, etc.

The short and simple answer is that we have to rebuild our economy, and our lives, from the bottom-up. We have to relearn how to do manual work like what we have mainly been asking immigrants to do for the last couple of decades. We should rebuild our local farming sector and get rid of bloated monstrosities like Monsanto. We should launch a major assault on the automobile culture and begin to revitalize cities and towns so that people can bike or walk to work or take public transportation.

It will not be easy to do these things. It may not even be possible. We have forgotten how to work because we have wanted our money to “work for us.” But that money, which only ever existed on paper, is gone. Our population is aging and not too healthy, making care of the sick and dying the only growth industry. And the young people who come out of our schools have few practical skills with which to earn a living. This must change too.

And what of investment capital? Loans are harder than ever to get. The small business sector, which could be an economic engine, is in dismal shape with lack of credit, high costs, and weakened markets for their products. Half of all new small businesses fail within one to two years of start-up.

Some say that a nation armed to the teeth and under this much pressure is likely to start a really big war out of frustration and not knowing what else to do. In other words, roll the dice. But World War II ended a long time ago. Since then, except for Vietnam, we have had our way bullying small nations. But that era has ended too. We won’t be able to do to China, Russia, and India what we did to Iraq and are trying to do to Afghanistan.

World War III would be a really bad choice. What we should do instead is take a positive attitude and sit down together and figure out ways to work our way out of this mess. But it will take a heap of humility, leadership, and willingness to face the pain of starting over again. But it could also be an adventure. After all, nation-building should begin at home.

By Richard C. Cook
http:// www.richardccook.com

Copyright 2010 by Richard C. Cook

Richard C. Cook is a former U.S Treasury analyst who also worked in the Carter White House and for NASA and writes on public policy issues. His new book is We Hold These Truths: The Hope of Monetary Reform (Tendril Press 2009). His website is http://www.richardccook.com He is a member of the U.S. Basic Income Guarantee Network and has been an adviser to Congressman Dennis Kucinich and the American Monetary Institute http://www.monetary.org

Richard C. Cook Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Citizen
17 Aug 10, 06:28
Thanks

I have read four of your articles back to back and I must say they are refreshing. Although the majority of the information exposes the tragedy that has befallen our world, not just in the United States, your thoughts end with an encouraging spirit. Thank you for your words of wisdom and keep them coming!


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules