Best of the Week
Most Popular
1.Gold Price Crash Through Key Support, Crude Oil in Freefall - Clive_Maund
2.Marc Faber Warns Japan's Bond-Buying Program is a Ponzi Scheme - Bloomberg
3.Silver Price and Powerful Forces - DeviantInvestor
4.Stocks Bear Market Catastrophe as Stocks Flash Crash to New All Time Highs - Nadeem_Walayat
5.Marc Faber Warns Not to Hold Any Gold in the U.S. - GoldCore
6.U.S. Housing Market San Francisco at Critical Mass - Harry_Dent
7.Global Scramble For Silver - Coins “Hard To Get,” “Premiums Likely To Jump” - GoldCore
8.Major World Stock Market Indices Analysis: SPY, QQQ, DAX, FTSE, CAC, HSI - Michael_Noonan
9.Japan's kaput?! - Axel_Merk
10.Tesco Empire Strikes Back, £5 off £40 Discount Voucher Spend Explained, Exclusions Warning! - Nadeem_Walayat
Last 5 days
Manipulated Stock Market Short Squeezes to Another All Time High - The China Syndrome - 23rd Nov 14
Gold Price 2015 - 22nd Nov 14
Stock Market Medium Term Top? - 22nd Nov 14
Is the Gold And Silver Golden Rule Broken? - 22nd Nov 14
Malaysia's Subsidy and Budget Deficit Conundrum - 22nd Nov 14
Investors Hated Gold at Precisely the Wrong Time: What About Now? - 22nd Nov 14
Gold and GLD ETF Selloff - 22nd Nov 14
Currency Wars, the Ruble and Keynes - 21st Nov 14
Stock Market Investor Sentiment in The Balance - 21st Nov 14
Two Biotech Stocks Set to Double on One Powerful Catalyst - 21st Nov 14
Swiss Gold Poll Likely Tighter Than Polls Suggest - 21st Nov 14
Gold's Volatility and Other Things to Watch - 21st Nov 14
Australia Stock Market and AUD Dollar Analysis (ASX200 and AUDUSD) - 21st Nov 14
New Algae Research May Have Uncovered an “Energy Forest” Under the Sea - 21st Nov 14
The Cultural and Political Consequences of Fiat Money - 20th Nov 14
United States Social Crisis - No One Told You When to Run, You Missed the Starting Gun! - 20th Nov 14
Euro-Zone Tooth Fairy Economics, Spain Needs to leave the Euro - 20th Nov 14
Ebola Threat Remains a Risk - New Deaths in Nebraska and New York - 20th Nov 14
Stock Market and the Jaws of Life or Death? - 20th Nov 14
Putin’s World: Why Russia’s Showdown with the West Will Worsen - 20th Nov 14
Making Money While The World Burns - 20th Nov 14
Why This "Quiet Zone" Is Now Tech Stocks Biggest Profit Sector - 20th Nov 14
My Favorite Stock McDonalds Just Got Kicked Off My “Buy” List - 19th Nov 14
European Economies in Perpetual State of Shock, What's Scarier Than Deflation? - 19th Nov 14
Breakfast with a Lord of War and Nuclear Weapons - 19th Nov 14
The U.S. Economy’s Ebb and Flow - 19th Nov 14
What You Need to Know Before Investing in Alibaba - 19th Nov 14
Forget About Crude Oil Price Testing 2009 Low - 19th Nov 14
What Blows Up First? Part 5: Shale Oil Junk Bonds - 19th Nov 14
Bitcoin Price Did We Just See an Important Slump? - 18th Nov 14
How to Profit From Oversold Crude Oil Price - 18th Nov 14
Stock Valuations Outrunning Profits Growth - And the Band Played On - 18th Nov 14
ECB Buy Gold Bullion? Japan's Monetary Policy Dubbed "Ponzi Scheme" - 18th Nov 14
Gold, Silver, Crude and S&P Ending Wedge Patterns - 18th Nov 14
How High Could USD/JPY Go? - 18th Nov 14
On Obama and the Nature of Failed Presidencies - 18th Nov 14
Globalism Free Trade Immigration Connection - 18th Nov 14
An Epiphany From Hell - Buy Gold and Silver - 18th Nov 14
Too Difficult to Get a U.S. Home Loan - 18th Nov 14
Has the Gold Bear Trap Been Set - 18th Nov 14
Gold Price and Miners Soar on Huge Volume - 17th Nov 14
Cameron Says Second Global Economic Crash is Loomin, Japan in Recession - 17th Nov 14
How to Play the Stock Market 2014 Year-End Rally - 17th Nov 14
What The Fed Has Wrought, Who Needs Wage Earners Anyway? - 17th Nov 14
Stock Market Indexes Fluctuate Along Record Levels - Will Uptrend Continue? - 17th Nov 14
Stock Market Trend Deceleration Tends To Precede Corrections - 17th Nov 14
Stocks Bull Market Set to Continue After Consolidation - 17th Nov 14
The World Is Run By Fools, And We Let Them - 17th Nov 14
Gold Price Golden Bottom? - 17th Nov 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Gold Report 2015

Fiscal Cliff Deal and the U.S. Economy Swan Dive of 2013

Politics / US Economy Jan 02, 2013 - 02:50 AM GMT

By: BATR

Politics

Hold your breath, the race to the bottom is ready to escalate. The consequence of the corporate consumerism economy has reached the tipping point. The old rules that mainstream spending will dig the way back to prosperity are permanently dead. The one sure implication that is indisputable is that taxes are set to rise at unprecedented levels. With Obamacare revenue obligations coming into effect, the latest phase of centralized medical socialism spreads like a virus. Under such circumstances, how can the patient regain their health?


The Rino Republicans have proven again their slimy deceit, as demonstrated in Highlights of Senate bill averting ‘fiscal cliff’. The bipartisan house is poised to make another deal with the devil. Such legislation that refuses to enact meaningful and significant spending cuts exemplifies the depth of the efforts to dismantle the economic wellbeing of the average taxpayer.

The only beneficiary out of the tax bill from hell will be the corporate/state axis. By setting aside the automatic sequestration program reductions for a typical irresponsible useless promise the McConnell, Biden reach tentative deal on sequester, con insults the intelligence of any rational taxpayer.

"The negotiating parties reached an agreement to delay it by two months with some spending cuts to offset the delay."

Without a serious reduction in the rate of growth, much less a real shrinking in federal expenditures, deficit spending will shoot up higher than an addicted junkie. Examine the mess.

"According to the Congressional Budget Office, the last-minute fiscal cliff deal reached by congressional leaders and President Barack Obama cuts only $15 billion in spending while increasing tax revenues by $620 billion—a 41:1 ratio of tax increases to spending cuts."

This factor alone provides ample evidence that the economy will sustain another substantial hit. Treading water is no way to save yourself when you are swimming inside a whirlpool of spiraling intensity or diving into a pool drained of water.

2013 is likely to be another generous year for the financial vultures. Mergers and acquisitions may well come back ‘with a vengeance’, as international corporatists push hard for even greater consolidation. The suspect "Free Trade" cabal has enormous support and protection from the selected public officials that administer a plutocrat economy. Even under the distractions of higher taxes on the super affluent, their wealth will grow dramatically, as public subsistence becomes more dependent on government handouts.

Business is very good for the governing bureaucrat. This New Year provides immense promises for government expansion. The crowding out of the credit markets for private business will continue as an inevitable result of public sector borrowing hitting new highs.

Private firms will struggle as disposable funds become rarer. The consumer has shown remarkable restrains since the 2008 meltdown, but the internal built up demand for lifestyle replacement standards will not generate the economic activity that so many financial experts tout.

Prospects of an intensified reoccurrence of the persistent recession are far more likely. The sustainability of Federal Reserve monetization has limits. The crucial test of this desperate repurchase of debt created obligations will play out in the bond market.

Another down grade of the U.S. credit status over the next political battle of raising the borrowing limit is a major concern. The potential free fall of the Dollar and international abandonment of the reserve currency standing is probably the greatest risk to the economy.

Any credit-based economy is at the mercy of the central banksters. Disregarding the phony political rhetoric of the governance ideologues, the basic constructs of economic facts cannot be separated from the harsh reality of a credit crunch.

Inflation is embedded in the under reported consumer pricing statistics. Grocery prices will rise, while food stamps proliferate. This SNAP economy is a telltale gauge of the wellness of the basic consumer. How can anyone believe that the prospects for a healthy economy are in the cards for 2013?

The one unassailable conclusion that is born out with every turn of the financial page is that the rich become richer, while the middle class struggles even harder to make ends meet.

Many will fall into the trap that rich people are the cause of the problem. Such social envy misses a proper perspective on wealth creation. The real reason why the economy scrambles to democratize medium affluence is that the monopolists of politically protected conglomerates suppress initiative and originative employment entrepreneurial enterprises.

The entire political and tax system operates to diminish the chances of small business to compete against the virtual unrestricted capital access of major public companies. 2013 will be a watershed year that regretfully will see the systemic demise of privately held endeavors.

The replacement of free enterprise, with state/capitalism has produced a fascist economy.

When the establishment operates under the favoritism principle, the inevitable result is that crony capitalists dig the graves of independent business operators, with publicly funded shovels. How under this formula can the ordinary citizen expect to prosper when the supplanting of individual intuitive is intentionally marginalized?

The financial markets reflect uncertainty in the face of record corporate receipts. The balance sheets of companies have been rebuilt from the depth of the housing implosion, with much assistance from public indebtedness. The globalist banks practice distress acquisitions, deliberately designed to solidify interdependency at the price of personal autonomy.

With this acceleration of financial austerity for the average citizen, the gap between the corporate economy and the main street market grows exponentially. Whatever degree of cash flow that the country enjoys in this New Year, the price that will be paid to stretch out one last celebration of former fortune, will inescapably result in national poverty.

Just blaming the one percent ignores the institutional corruption that perpetrates the war against the middle class. Hoping for a thriving 2013 dismisses the abject State of the Nation. The only relevant question unanswered is whether the beleaguered taxpayer will revolt or just swallow another dose of Obama collectivism.

James Hall – January 2, 2013

Source : http://www.batr.org/negotium/010213.html

Discuss or comment about this essay on the BATR Forum

http://www.batr.org

"Many seek to become a Syndicated Columnist, while the few strive to be a Vindicated Publisher"

© 2012 Copyright BATR - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors

BATR Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

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

Free Report - Financial Markets 2014