The G20, faced with a global slump in stock prices, has pledged to keep things afloat. This, I think, makes at least a half dozen Ruling Class efforts I’ve seen over the past month to stave off disaster…each assertion (by a central bank, by China, by the European Union, etc) is that no one should worry…they’re on it and they’ll never let it all fall apart. Usually, when such announcements are made, stock prices shoot up. I guess because people who buy stocks are stupid enough to actually believe such stories. Naturally, there is a renewed slump…and the slumps come faster after each “we’ve got a cure!” announcement.
Sure enough, European stocks inched off their lows…but a Mish points out, Asian stocks weren’t even phased by the announcement: they resumed their slide from the day before. Essentially, the Masters of the Universe are running out of even fake things they can do stave off collapse. I don’t know what they’ll do next, but I guess the maximum half-life of this latest pledge from the G20 is about 5 days. It might see us through the weekend.
But they can’t prevent the crash – they can only delay it, and the longer they delay it, the worse it will be. The economy is bad – not just the US economy, but the global economy. It is honeycombed with bad debt, corruption and political blindness. Some nations have managed to fake it to prosperity the last three years (most notably China), a few nations actually did well (Australia and Canada, who sell a lot of things to China), but all nations are doomed to an economic downturn. No part of the world will escape it, and it will be a hard landing. I just don’t know when it will happen…depends on how badly the Ruling Class wants to cling on to power. A bad economy going in to 2012 means not only Obama loses, but may well mean an historic electoral blowout of the Democrats. The people in charge don’t want that…same thing around the world. The Chinese don’t want revolution, the Eurocrats want the people to keep quiet, etc, etc, etc. So, these clowns will go to very great lengths to patch up the sinking ship.
And that means – what? Beats me…could be they hold it together until 2013…could be that the market crashes tomorrow or Monday. We’ll have to wait and see…
UPDATE: Want a little more proof that the global economy is lousy? According to this news report – about a new supertanker being mothballed – back in 2007 you had to pay $229,000.00 a day to lease a tanker…this supertanker is being mothballed because they could only get $1,000.000 a day. This is where economic rubber hits to road…not in phonied-up government statistics, not in stock prices and bond yields (though these things can be important) but in whether or not people are actually doing things. Ships lying idle is an indicator of an economy in desperate straights.
I can’t think of an economist that I agree with all the time, and Nouriel Roubini is no exception but, in this case I suspect Roubini is right.
George Soros is quick to agree with him, but equally as quick to blame Republicans for the current failure of the economy to recover. I especially got a chuckle from this Soros statement:
I read somewhere a while back that the “rich” (top 1%) of Americans pay as much or more than the bottom 95%, which begs the question, how much more should they pay. I have yet to read any report of ANY uber-rich person voluntarily paying more than is absolutely necessary by law. I also have yet to read any projections by any economist, CBO, OMB — ANYONE, showing what effect any given tax increase on the wealthy would have on the deficit/debt/economy.
And you are not going to. Getting down to the nuts and bolts of these proposed increases would not make it, as Casper puts it “good political theater”.
We could always Eat the Rich!
Here’s an article that puts your comments into perspective and shows what demagogues Liberals are on this issue.
the dirty little secret
The chart above is from the Joint Economic Committe (based on 2006 IRS data), showing the percentages of federal personal income tax paid by different groups of taxpayers:
The top 1% of taxpayers pay about 40% of all income taxes,
the top 10% pay 71%,
and the top 50% pay 97% of all taxes.
The bottom 50% pays less than 3% of all income taxes paid.
Now look up what percentage of the wealth in this country is in the hands of that same group. See if you still feel bad for them after that.
RecessionCOMPLETE Meltdown be Avoided?
A moot point. The world economy is already in a recession. The real question is, Can the world economy avoid a prolonged depression?
That is pretty much it. I doubt it…certainly not while Obama runs the United States.