Can We Be Saved…?
When the Spanish Galleons came back from the New World with cargoes of gold and silver coins, the Spaniards thought they’d hit the jackpot. All of a sudden, Iberia had plenty of money. Historians report that they neglected their fields and their manufacturing plants because now they had easy money to spend. Prices rose due to more money in circulation. Then the treasure ships stopped coming and the Spaniards got broke. Spain - and Portugal as well - went into a decline that lasted four centuries.
In the late 1990s, America got in the habit of getting shiploads of stuff from Asia and paying for it only with pieces of green paper. Pretty soon, Americans too neglected their own factories. ‘Let the Asians sweat’, they said. We’ll think!
Not much serious thinking has taken place in the United States of America for the last 20 years. Instead, people preferred comforting illusions and conceited claptrap. ‘We have the ’strongest, most dynamic economy the world had ever seen’, they patted themselves.
Of course, you don’t need to think - not when your ship is coming in. But now that the ship is sinking you’d expect people would put on their life jackets and their thinking caps. Nope. Now they look to the government for the free money. Congress is now spending away $1 billion per hour. GM got a few billion. But the banks and Wall Street have been the biggest freeloaders so far. AIG has gotten four bailouts. Freddie Mac took a big bailout from the government too. But boo hoo…Freddie lost $50 billion last year, says the Washington Post, so it will need a little more help.
Unemployment is still rising and sales are still falling. Until those trends flatten out, there is no reason to think business will improve. On the contrary, business conditions are worsening and companies are cutting costs faster than any time since the Great Depression.
There are approximately 14 million empty houses in America. Where did the former tenants go? The New York Times has part of the answer: they’ve moved into motel rooms:
“Greg Hayworth, 44, graduated from Syracuse University and made a good living in his home state, California, from real estate and mortgage finance. Then that business crashed, and early last year the bank foreclosed on the house his family was renting, forcing their eviction.
“Local officials estimate that 1,000 families who live in motels in Orange County, CA, go uncounted in federal homeless data.
“Paris Andre Navarro, 47, and her daughter, Crystal, 11, have been living at the El Dorado Inn in Anaheim, Calif., for three years. Ms. Navarro said the $241 weekly rent makes it hard to save.
“Now the Hayworths and their three children represent a new face of homelessness in Orange County: formerly middle income, living week to week in a cramped motel room.”
This is what Greenspan and his cronies at the federal reserve have done to America and - consequentially - to the world economy. The same disastrous policies - which have failed time and time again - are being implemented by Paulson and Bernanke.
As Congressman Ron Paul has stated, capital does not come from banks, they just provide you credit, with all the liability on the borrower. Real capital comes from working hard and being productive. No longer can we afford to keep on spending. We need to start saving like the chinese have done.
If these monetary policies by the Federal Reserve and United States Treasury do not end, we will see massive inflation in the U.S. that could ultimately lead to Zimbabwe-style Hyperinflation.
