Thursday, September 30, 2010

A Disturbing Economy and No Real Bright Spots

The United States of America is skating on thinner ice than any global warming analyst can depict, which is pretty darn thin according to the hype. And this looming catastrophe has nothing to do with temperature trends.

Instead, it’s all about our financial situation and what we’re doing – or not doing – about it. Our unemployment seems stuck at or above the 9.5% mark, which, incidentally, doesn’t include any and all of the poor college kiddies who graduated with big dreams last year that are still waiting tables... if they’re lucky.

So sure, the markets might be emulating a drunken frat boy in its celebration that applications for jobless benefits fell again – the third time in four weeks – but investors may want to take off their beer goggles. Because another economic report released today begins this way:

“U.S. economic growth tailed off sharply in the spring and probably isn’t faring any better now.

“Gross domestic product – the broadest measure of the economy’s health – expanded at a feeble 1.7% annual rate in the April-June quarter, The Commerce Department reported Thursday.

“That’s a notch higher than the 1.6% growth rate the government estimated a month ago (My note: Can they ever
get it right?). The slight change was mostly due to a little more spending by consumers than first estimated. Still, that’s not enough to have a major impact on the economy.”

Personally, I’m surprised that consumer spending went up at all. But then again, I also don’t think much of Obama’s promises of hope and change either. So clearly, I’m cynical.

Incidentally, that same tendency to think the worst about blatantly disturbing situations is also why I’m posting the next article in full…

Don’t worry; it isn’t long. But it is very important to understand.

China Owns the U.S. Economy. Lucky Them.

Written by Antonio Oprita, a web producer for CNBC.com, “U.S. Is ‘Practically Owned’ by China: Analyst” might sound dull, but the full – and hopefully obvious – implications are anything but.

Oprita writes:

"The US supremacy as the top world economy will end sooner than
many people believe, so gold is a better investment than the dollar despite it
hitting a new record, Tom Winnifrith, CEO at financial services firm
Rivington Street Holdings, told CNBC.com Monday.

"Gold hit a new record high Monday and silver rose to another 30-year
peak as investors were worried about the dollar weakening further after the
Federal Reserve hinted at more quantitative easing last week.

"The US trade deficit and debt continue to grow and the authorities are
reluctant to address the problem, preferring to print money, Winnifrith said.

"'America is practically owned by China,' he said.

"He reminded of the fact that in 1900, sterling was the world's reserve
currency but by 1948, that was no longer the case as the British Empire
collapsed.

"'America is doing what Britain did,' Winnifrith said. 'America spends much
more than it can afford and it's not addressing the issue.'

"In 1832, China and India were the world's two largest economies and by
2032, they will regain that status, he predicted.

"'The 200 years when Britain and the US were the top two economies were
an aberration and that will change,' Winnifrith said.

"'The decline of empires has happened much faster than folks think. I
believe that gold will be a far better bet in 20 years than the dollar,' he
added."


And yet what are our politicians thinking about? Certainly not passing a feasible budget that takes the country’s economic defeat in mind. Instead, all they care about is getting re-elected so they can continue the same insane, dishonest, irresponsible policies they’ve been pushing for too long already.

No comments:

Post a Comment