ICG’s Mark Armstrong’s Economic Comments
World Currencies
ICG sent out the following from its Mark Armstrong today:
The Gulf oil spill has been taken as an excuse to wage war on the one substance that, perhaps more than any other, makes our modern way of life possible. Cap and trade, as the wealth redistribution mechanism is called, “will necessarily cause energy prices to skyrocket,” with the proceeds to be supposedly transferred to nations that don’t use so much. It seems the oil spill is just what was needed to make the case…
From an economic standpoint, everyone seems to hang on the latest release of official numbers from unemployment to consumer confidence to housing starts. Even though none of those numbers are inspiring any confidence in the long term outlook, the solution we’re told is for the government to keep hiring and spending.
Not a few economic analysts are predicting that 2011 will be a terrible year for the American economy. Tax rates are due to increase dramatically next January, prompting the private sector to transfer of as much income and profits as possible to be taken before this year is out. That is expected to make the 2010 economy appear to be stronger than it actually is, but may result in a ruined economic environment next year.
But D.C. is undeterred, at least for now. To those in power the obvious solution is for the government to spend, spend and spend some more. Is it not remarkable to see as we did at the economic conference in Toronto, leaders of European nations look upon the American president with absolute dismay as he promoted additional “stimulus spending.” The Europeans have watched their treasuries disappear behind a torrent of socialist spending and “green” programs and initiatives until they’ve hit an economic wall. They’ve already learned the hard way that government spending does not produce national prosperity. It’s a lesson present leadership is determined to teach America the hard way…
As we’ve seen, the very practice of democracy in Europe over the long term is in serious doubt.
While I have edited out some of the more political statements in the above newsletter, the basic point that there are economic issues in the USA, that Europe is taking a different approach, but that Europe will also have issues is correct.
As far as how financial types felt this week, I saw the following two news item today:
U.S. Stocks Drop as Dow Posts Longest Losing Streak Since 2008
July 03, 2010, 12:40 AM EDTBy Whitney Kisling and Nikolaj Gammeltoft
July 3 (Bloomberg) — U.S. stocks plunged this week, giving the Dow Jones Industrial Average its first seven-day loss since 2008, after reports showing slower-than-estimated growth in jobs and factory orders and amid concern China’s economy has slowed…
“People are avoiding risk and there is an overarching concern that the economy is heading into a slowdown,” said Art Hogan, chief market analyst at New York-based Jefferies Group Inc. “If you’re concerned about the pace of the economy, then it’s difficult to hang onto stocks.” http://www.businessweek.com/news/2010-07-03/u-s-stocks-drop-as-dow-posts-longest-losing-streak-since-2008.html
Why The Greater Depression Still Lies AheadForbes – June 30, 2010If policymakers do not understand the real cause of a problem, they will in all likelihood be unable to provide a genuine solution.
Messrs. Barack Obama, Benjamin Bernanke and Timothy Geithner do not understand the real cause of this debt crisis. They are politicians first and economists or students of the market second–if at all. Therefore, it is not wise to count on them to tell us when the Great Recession is over, or to provide a plan to prevent another one in the future.
The cause of the Great Depression in the 1930s, and the Great Recession beginning in 2007, was one and the same: an overleveraged economy. Excessive debt levels are the direct result of the central bank providing artificially low interest rates and of superfluous lending on the part of commercial banks.
The easy money provided by banks eventually brings debt in the economy to an unsustainable level. At that point, the only real and viable solution is for the public and private sectors to undergo a protracted period of deleveraging. The ensuing depression is, in actuality, the healing process at work, which is marked by the selling of assets and the paying down of debt.
Unfortunately, our politicians today are focused on fighting this natural healing process by promoting the accumulation of more debt…
Since we have yet to address the real cause of this recession, we are moving inexorably closer to causing The Greater Depression. If policymakers do not understand that the progenitor of a depression is debt, they will also be unable to provide a genuine solution.
Things are changing in the world and all North Americans and Europeans need to pay attention (as do the Asians, Latins, Islanders, Australians, and Asians). A greater depression will hit the USA and its Anglo-allies.
The USA economy will ultimately be replaced as the main economic engine of the world, and this process has began. And eventually the USA will be no more.
For more information, please check out the following:
Prophecies of Barack Obama? Are there biblical and non-biblical prophecies about Barack Obama. Did Nostradamus predict Barack Obama dealing with the Antichrist? This is a lengthy article with many prophecies that Barack Obama may end up fulfilling.
Barack Obama, Prophecy, and the Destruction of the United States Some claim that Barack Obama is the prophesied “son of Kenya”. Might Bible prophecy be fulfilled by him?
Europa, the Beast, and Revelation Where did Europe get its name? What might Europe have to do with the Book of Revelation? What about “the Beast”? Is an emerging European power “the daughter of Babylon”? What is ahead for Europe?
Anglo – America in Prophecy & the Lost Tribes of Israel Are the Americans, Canadians, British, Scottish, Welsh, Australians, Anglo-Southern Africans, and New Zealanders descendants of Joseph? Where are the lost ten-tribes of Israel? Who are the lost tribes of Israel? Will God punish the U.S.A., Canada, United Kingdom, and other Anglo nations? Why might God allow them to be punished first?
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