This is for all those who think the kings clothes are just fine and getting better all the time.
The Chinese have been "bailing out the dollar" since sometime way back in the 1990s. What else is new? And actually their growth is now accelerating, not declining, as is India's and Brazil's. That is part of the more optimistic story.
"Real unemployment" has always been higher than official. In case you did not notice, the official rate just dropped this past month, although I am fully aware that this was due to discouraged workers and it will probably rise some more. I expect it to go above 10% before it is all over, but it might not actually break the 10.8% at the worst point in 1982.
I don't know where you get your info or what research you've done but i can't see how these conclusions square with reality.
The falling dollar, the Chinese bailing out of the dollar and buying every bit of gold and silver as well as any other bullion they can get their hands on and of course speaking of China, they are looking at unemployment in the double digits too because of world wide recession and the depression here. And another thing, their GDP would look like a ski slope if not for very creative accounting practices.
The coming avalanche of mortgage defaults in 2010 (millions of loans.) That should be fun to watch. How do you think that will affect spending by the general public.
The outright lies concerning the unemployment situation. Real unemployment at 17% and about to take another big jump. Some prognosticators say it won't stop till it hits 30-40% . Just how do you think that will set with the GDP.
The retail shocker, cash for clunkers in exchange for any other spending by the public. Oops! People bought cars and stopped buying anything else. Why? Cause they are broke! Belly up! The rapidly decreasing consumer spending and utter and complete lack of confidence in this government should make for some interesting reading in the near future.
This could put a frown on your face to. . . .
$516 Trillion dollars in derivatives? The infamous "Ticking Time Bomb"? If I ignore my debts long enough, do they just go away?
This could go on and on but I think you get the picture and it ain't purddy!!!
The Chinese have been loving the dollar for many years but no more. They are the largest stockholder in US debt. Period. Just passed Japan. Somewhere in the neighborhood of 800 billion. The deal with India and Brazil looks like diversification but is actually transfer of funds out of US bonds and into hard assets.
China has it's own problems with severe unemployment and social unrest due in whole to the crashing world economy and their number one consumer going off the map. These are tumultuous times we live in.
They are scared. It is not business as usual. They are dumping dollars as fast as they can into hard assets and gold. Since 2002 the dollar as lost over 30% and it looks grim for anyone holding them. Maybe if they just print some more and spend more it will be OK.
China is looking hard at other markets for it's goods. The US has been a literal gold mine for China's industrial boom but that is about to go bust unless we get a handle on the debt we are now saddled with.
The worst of it is that the US is tied at the waist to China. We have never been so intertwined with one country. this is dangerous..
Here we have a situation where another country, an old nemesis actually, owns the lions share of the US. Japan is second in line.
That is power of a sort. But really, it is perhaps an even larger problem for the Chinese who are not happy with their leaders for sinking so much of Chinese capital into one pot. Billions have been lost and I know the leadership is looking long term but there is infighting on the home front as to the wisdom of having all of your eggs in one basket.
That is why there is both gnashing of teeth and rattling of sabers in China today. There are factions in China that understand the precarious position their leadership has put them in. Just as there are those who see this as a house of cards in this country.
Having a Happy face is all well and good but really, you can smile and live in the real world too.
As for unemployment going above ten percent, Ha! You were right. It's way beyond that now and more and more folks who live in the real world and not Alice's know it. The curve for this depression is still heading straight down and will probably not come back up for air till 2013. Perhaps by 2014 it will rise to an equivalent level of a year ago.
Housing needs people who are making money, saving money and spending money! Oh, they better have perfect credit too, to start climbing out of this morass. The housing market will not have them for many years. They are on unemployment and it will soon be gone.
With Colonials death this week and the fire sale merger with BB&T, perhaps 150 other banks teetering or already totered we have still more rosy news from the financial industry. Sure there was a merger but a loan will be 10 times harder to get now. Still more to come and as long as the banking industry as a whole continues to lie, cheat and steal by fraud, there will be more bank closures.
You can't keep hiding loses to stay open without some severe consequences. In the past, folks went to jail for this kind of fraud. We call it cooking the books.
The reason I present this view is that I believe it is irresponsible for anyone to paint a rosy picture on a rotten apple. This deluded view of recovery is just a mask on "Same old, same old" and may lead others astray who actually still trust their banks or government with their much needed and hard earned cash. Happy smiley faces are great on a greeting card but not when you're arrogantly leading others to the slaughter.
Folks really need to prepare for a bit of a hard time ahead. I think that is really the only prudent and responsible advice.
For those of you who think the Kings clothes are bright and beautiful, keep smiling.
