CORRECTION
In my post,
Rudderless On A Sea Of Debt, I incorrectly stated the Bush Stimulus Package was $600 BILLION when in fact it is an even more paltry $160 BILLION. That being the case, things are worse than they seemed then. LOL, if you can believe that. Heck, judging by the media's recent "reporting", you'd swear nothing was wrong with the American Financial System.
With a smaller stimulus package [who said size doesn't matter?] we must also update it's insignificance in proportion to the debt bomb hovering over each Americans head. Recall that American citizens are in debt to the tune of $2.48 TRILLION [$915 BILLION in credit card debt], and the US Government is in hock to the tune of $9 TRILLION.
A $160BILLION cash stimulus is being doled out to Americans that are $2.48 TRILLION in debt. The handout won't even cover 20% of the nation's credit card debt. And heaven forbid you use this free money to pay off debt. The money comes with explicit instructions as to your civic responsibility, and in the name of patriotism, to spend that money like a drunken sailor on shore leave. Spend it frivolously, and save your economy and way of life...even if the real effect of $160 BILLION on the American economy would be akin to pissing into the wind. Seriously, our great leaders have gone to great length to convince our nation of sheep that all of the country's financial ills can be cured with the grand sum of $160 BILLION.
$160 BILLION is less than 7% of $2.48 TRILLION. $160 BILLION is less than 2% of $9 TRILLION. $160 BILLION is chump change and it isn't going to fix a damn thing.
And my $600 piece of the pie still won't cover my annual beer tab.
Bush says rebates going out Monday will boost economy
WASHINGTON (AP) -- President Bush said tax rebates will start going out Monday, earlier than previously announced, and should help Americans cope with rising gasoline and food prices, as well as aid a slumping economy.
"The money is going to help Americans offset the high prices we're seeing at the gas pump, the grocery store, and also give our economy a boost to help us pull out of this economic slowdown," Bush said.
Bush's emphasis on fuel and food prices differed from other comments he's made since signing the economic stimulus legislation, intended to aid the economy by boosting overall consumer spending -- which accounts for roughly two-thirds of the nation's economic activity.
By saying expressly that people could use these one-time checks to pay for such necessities as food and gas, Bush underscored the deepening challenges facing the economy.
Hmm, sounds to me like Mr. Bush doesn't think this government handout will amount to a hill of beans either. I'm not putting words in his mouth, but I seriously doubt he believes this paltry sum will improve growth prospects for the economy in the second half of this year. As inflation escalates by the month as we move forward, these chump change checks will prove even more worthless than they really are.
Speaking of growth prospects. Is it just a strange coincidence that the 1st Qtr preliminary GDP numbers come out the same day as the next Fed rate announcement? Recall please that 4th Qtr GDP came in WAY below estimates at a minuscule 0.6%. It would be impossible to believe that 1st Qtr GDP could top that number to the upside...it should in fact be shockingly below 0.6%. The best will be when the number comes out and we're told that the number "was better than expected" and Wall Street cheers. I'm sorry, but I am getting sick of this "better than expected" euphoria that is sweeping Wall Street. Crappy earning are CRAPPY EARNINGS. I've said it before and I'll say it again, "You can't polish a turd." It's tough deciding which is more disgusting, the financial media spin of the crappy earnings, or the fact that people actually believe the earnings are better than they are. I guess there really is a sucker born every minute.
Fed expected to cut rates, but focus will be on its words
Why is it that there is such a hullabaloo about the "words". For Heaven's sake people, these men are unabashed liars. Their words are flotsam. Ben Bernanke told us in the Spring of 2007 that the sub prime blowup would be contained, and that it would not creep into the general economy. Um, excuse me Ben, care to rephrase that? Who cares if the Fed is done cutting rates...INFLATION IS STILL ON THE WAY. And long bond rates are beginning to rise, and that is BAD news for anybody looking for a loan. The Fed has completely lost control of the financial system. Sure, they give the "perception" that they have things stabilized, but they haven't. This is the mother of all financial hurricanes we are facing folks. Have you ever been in a hurricane? Have you ever been in the eye of a hurricane? The eye of the hurricane passes over, the wind stops blowing, the rain stops, and the sun comes out...for maybe an hour...and then the other side of the storm slams into you. The financial storm is still raging, and the Fed is just buying time as the eye passes over. This financial storm is not over by a long shot...and in fact may still be gathering strength.
Gold Drivers: Cheap Money, Rapid Inflation
The US financial system has several pillars, all either underwater or tilting toward insolvency. Vicious cycles have begun to work their powerful wreckage, rendering solution as extremely elusive and difficult. The breakdown must run its course. The momentum to unwind 15 to 20 years of abuse will take many years more.
- USGovt is running huge federal deficits, to grow worse as recession worsens
- US trade deficit is widening, as is the corresponding Current Account Deficit
- US bank system is in technical insolvency, with negative non-borrowed core assets
- Nearly 10% of homeowners have negative equity in homes, to reach 20% by year end
- US car industry is reeling from higher gasoline costs, and piglike SUV emphasis
- US airline industry is reeling from higher jet fuel costs, and strangled networks
- US truckers are being squeezed, as highway actions are on the rise
The United States is tragically entering a gradual state of failure, from insolvency, corruption, and indescribably horrible economic counsel. An astronomical rise in USGovt federal deficits could occur in the next few months. Capitalism has failed in an historical spectacle of catastrophe. The nation has lost its legitimate income sources from industry. The nation has relied upon inflation contraptions and financial engineering devices for two decades. The exotic devices have blown up in our faces. The reflection upon the USDollar is certain to continue. Recent adoptions of broader US Federal Reserve lending facilities has given a cup of water, a piece of bread, and a peptalk to a crippled man burdened by a 150-lb backpack of debt even as Wall Street thieves empty his pockets of loose money and all pension receipts. To accept that the worst is over is an exercise in stupidity, naivety, and further con game victimizations. http://news.goldseek.com/GoldenJackass/1209017100.php
Should Gold Investors Worry on Dip Below $900 on Dollar Strength?
When in doubt….Fundamentals. US Debt Load, Economic Growth, Monetary Growth, Trade Deficit.
Much of the recent mini-rally in the Dollar has been due to action in the Euro. German consumer confidence and technical profit-taking have been attributed to the recent short-term pullback. The European Central Bank and the leaders of various EU countries have also been calling for intervention. The Euro has come a long way in a short time. The general consensus seems to be that it is fine for the Dollar to lose its value as long as it does so in an orderly fashion. Looking at a chart of the Dollar Index, it is relatively easy to make out the step-like pattern in the decline over the past 2 years. Sustained rallies have not existed, Period. The evidence supporting the thesis that this ‘rally' will be short-term in nature is immense, while evidence to the contrary is nearly non-existent. http://www.marketoracle.co.uk/Article4475.html
The next few days will be pivotal for Gold and Silver. Fundamentally, the case could not be better for both of these metals. Recognize that any strength in the Dollar recently is because of weakness in the Euro. Nothing here in America has changed fundamentally to support much of a Dollar rally. Counter trend rallies are normal. Nothing goes straight up, and nothing goes straight down. If you really believe that there is "real buying" of the Dollar taking place today vs the buying by shorts covering and booking profits, then maybe Gold is not right for you. If you believe the Dollar has a lot further to fall, use this opportunity to buy more Gold and Silver at a discount. Efforts to stop the rise in Gold have been made rigorously over the course of this Bull Market that began in 2001. Gold has moved relentlessly higher in the face of "intervention", and I believe will continue to do so over the next several years.
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