Blogs For Victory

Mish has several articles detailing an economy on the rocks in Europe – a bit of an eye-opener is the news from Germany, Europe’s economy best until now:

German industrial production dropped by 1.1% in June. Early expectations stood on a rise of 0.1%. The rise of 1.2% that was reported for May was revised to only 0.9%. Altogether, the locomotive of the euro-zone cannot drive the train in high speed anymore…

Stocks in the US rose on a combination of BS and wishful thinking, coupled with a slight rise in consumer spending which will probably be found to be explainable as a temporary bump upwards in an otherwise downward slurge (all indicators are that things are starting to contract in the US…so a rise in consumer spending is an outlier).    Essentially, governments of the world printed and borrowed their way in to “growth” starting in the second half of 2009 and this has now sputtered to a halt in the second half of 2011.  I didn’t think it’d get this far – but, then again, I never figured Bernanke would print up quite as much as he did.

Now we’re kinda stuck…we can print and borrow the same amount of money, but it’d probably only buy us 6 to 9 months of “growth” (like heroin, fake and borrowed money to get your economy “high” always takes a larger dose the longer you do it).  Mish figures that the official data will eventually show the United States entered recession in June or July – over at Zero Hedge I recall one prognosticator figuring it would be back-dated to April or May, once all the data is in.  The bottom line here is that we either are in a recession, or so close to one as makes no matter.  The Obama boom times are over – we got as much as we could out of them.

The bad news is that because we did the Obama boom times we’ll now have a worse time of it going forward.  We’re massively more in debt, our dollar has dropped a gigantic amount of value, large swaths of American wealth-building capacity have been dismantled and the rest of the world – including China – is heading in to recession with us…there will be fewer buyers for our bonds, fewer places to export our inflation to, less ability to sell our exports.  Had we just let everything fall apart in 2008 (and so, yes, President Bush bears part of the blame), it’d all be finished by now and we’d be on the road to genuine recovery…because we bought Keynsian cure, and then elected Obama to quadruple down on it, we’re heading back in to recession, and perhaps a worse one than previous.  And looming in the background is the debt crisis – the thing which will financially kill us by 2015 or so if we don’t get our act together.  And getting it together is vastly more difficult now, thanks to Obama’s debt.

So, just how is that hopey-changey thing working out for you?