News Flash: Economy is Really Lousy

When the Ruling Class starts to admit it, you know we’re in a world of hurt – from the Washington Times:

Vice Chair of the Federal Reserve Board of Governors Sarah Bloom Raskin said today that unemployment numbers present too positive a view of the economy, adding that the Federal Reserve might need to take more action to stabilize the economy.

Nonetheless, as many families know,” said Raskin, an appointee of President Obama’s, “the headline unemployment numbers don’t fully capture the weakness in labor market conditions.”…

Later, though, she returned to Ruling Class type and asserted that she and the rest of the people running our economy are just wise, old owls and are carefully doing what needs to be done.  And, hey, if we hadn’t done all that money printing, it would have been worse!  She failed to explain how all the wisdom deployed so far has led to such a lousy economy.  You’d think that with a multi-trillion dollar price tag, we’d get more than a “it could have been worse” statement.

These people don’t really know what to do because they are working from a false theory – a theory that has it being consumption which makes the economy go ’round, rather than production.  It is the wealth we make which makes us rich, not the money we spend…especially not borrowed or printed money.  Until we start making money again (creating wealth via making, mining and growing things) we simply will not improve.  People like Ms. Raskin, I suspect, haven’t the foggiest notion of this.  How did the Chinese build up a couple trillion dollars of our money in their vaults?  Not by spending, but by making, mining and growing things.  Amazing that more people can’t see this (though being Ruling Class types, themselves, the Chinese leadership has also embarked upon a bonanza of printing and borrowing since 2008…and that will tip China in to recession in the by and by…even with their own example right in front of them, the Chinese leadership couldn’t see it).

More Rumors the Fed Will Print

From Zero Hedge:

For now it was just Jan Hatzius calling for QE3 now if not sooner. With the addition of JPM to the list of banks now implicitly expecting (read demanding) QE3, it is now quite clear how Wall Street feels – after all someone has to pay those Wall Street bonuses – it sure won’t come from M&A activity, underwriting of Chinese IPO frauds, or trading volume. Here is the key sentence from a just released note by JPM’s Michael Feroli: “We believe the minutes lend themselves to our view that there is a somewhat better-than-even chance the Fed takes action at the next meeting to increase the average maturity of assets on their balance sheet.” Keep an eye on the market tomorrow for confirmation: a third day of the same low volume meltup we have seen this week should make the open QE3 question into case closed…

For those unfamiliar, a “low volume meltup” is when the stock market rises high for no reason (or, indeed, even rises when the news clearly indicates a down day) on low trading volume.  For the most part of late, if you see the market dropping it is a much higher volume trading day than the days you see it rise.  All part of the fake, ponzeconomy we currently have.

Anyways, getting back to the Fed printing money.  I’m still figuring it won’t happen.  I understand that the only way we may avoid an “official” recession (ie, where the government numbers clearly show it) is by printing up money…but even that isn’t a sure thing, and any “good” you get out of it will have to be counterbalanced by the knowledge that more printing will lead to more inflation for basic necessities (food and fuel).  To me, there is far more downside political and economic risk in printing than in not printing.  But rumors of “QE3” keep flying, and now there this statement from someone at JP Morgan saying it may well happen..and if anyone is juiced in to Fed decision making, it would be a firm like JP Morgan.

I hope they don’t do it as it would be, long term (and possibly short term) a catastrophe for the economy.  But the Ruling Class is desperate – something has to be done to get unemployment down below 8% by August of next year or Obama and his Ruling Class liberals are doomed.  Dying Ruling Classes do tend to cast around for desperate expedients to stay alive…even rather stupid expedients.  And, so, even though I still think they won’t print, I have to put money printing in the realm of distinct possibility…we’ll see how it comes out.

 

Obamunism! Food Inflation Starts to Hurt

From Zero Hedge:

Somehow even as all that deflation in home prices continues, like perfectly joined communicating vessels, countervailing inflation continues seeping into pretty much every other aspect of society. But don’t take our word for it, (or even gold’s, which is just under all time record notional highs): according to Rasmussen, “Americans nationwide continue to lose faith in the Federal Reserve Board to keep inflation under control, with the number who say they are paying more for groceries now at an all-time high.” Specifically, “93% of adults report paying more for groceries now than they did a year ago, the highest finding to date…

I still tend to agree with those who hold we are in a long-term, deflationary trend…but this doesn’t mean we can’t have short-term, inflationary spikes…like we’re having right now.  While oil prices have tumbled from their highs of the Spring, the fact remains that gasoline prices are still significantly higher than they were a year ago…and I don’t know about the rest of you, but I get sticker shock when I go grocery shopping.

All of this inflation is the result of Bernanke printing up money.  Remember, he did this so that he would have the money necessary to bail out the banksters – and all the money printing works out to picking your pocket.  The dollars you have, you see?, are now worth less…but those with things of actual value to sell simply cannot take less than fair value for their goods.  If they did, then they’d go out of business.  This means that everyone with things of real value to sell (gasoline or food, for instance) must charge more.  This isn’t price-gouging as liberal class-warfare talking points would have it…it is a logical, reasonable response to events.  In this case, the deliberate devaluing of our currency by our central bank in order that very rich people who run very large financial institutions shall not feel pain.

This is the final price of liberalism – our money being stolen by an agency of government so those most closely connected to government can be bailed out.  Bernanke bailed out the banks, Obama/Pelosi/Reid bailed out the unions…they were looking out for their own, and the rest of us got screwed in the process.  The cure is to end the relationship – and the primary means of doing that is to kill off Big Government, so that no corporation or union can, by manipulating government, gain the power to loot the people of their hard-earned wealth.