After President Obama's return from a visit to China in late November 2009, "Saturday Night Live" a satirical program of the NBC Network, featured a spoof that can be seen via the following link:
http://www.hulu. com/watch/ 110317/saturday- night-live- china-cold- open
Why would a network which is normally blindly supportive of President Obama, broadcast such scasing criticism of his trip to the Far East? The only answer that I have is that the money interests who control the NBC network were highly dissatisfied with President Obama's performance in China. The spoof on "Saturday Night Live" in my opinion, was a public way of letting him know about the dissatisfaction.
Take a look at this clip......then I'll explain why President Hu Jintao wants to be kissed.....
When in August 1971 Richard Nixon defaulted on the U.S. Dollar held by foreign central banks, it required Paul Volker to raise the interest rate to 16% before the FED could sell any U.S. Government bonds to foreigners again. The primary purchaser of those Treasuries paying 16% was the PRC under Mao. (They know the Rule of 72)
Since then, the Chinese population has bought plenty of Freddie Mac and Fannie Mae bonds, as well as treasuries for their retirement savings. They all expect to be paid their interest on those bonds.
What they receive as interest on the U.S. and G.S.E. bonds is tax payers' money. It is the tax payer that has to pay interest on the debt the Congress voted and sold to the FED to peddle wherever.
As long as the Chinese government knew that the U.S. taxpayer had to hand over hard earned money to pay for the interest, evenso the Congress was piling on more and more debt, they were ready to buy more of the debt. However, when the ponzi scheme, which is the monetizing of debt, finally started to break down in September of 2007 with the first default of mortgage bonds, the U.S. Treasury and G.S.E. bond market suffered tremendously.
The FED from then on could no longer monetize enough debt, but actually had to print money that became a direct claim on U.S. assets and essentially on the assets of the American people. This sort of printing of pure fiat currency has in all history inevitably resulted in default. That is what the Chinese know.
They are demanding from President Obama, that he increase federal taxes not just print paper money (actually just computer blips). That is were President Obama is caught. He promised he would not raise taxes on anyone under $250,000 of income. Yet raising taxes on anyone over $250,000 will actually dry up any investment in the productive economy and lead to a total financial and economic collapse.
Therefore, if he is going to satisfy the Chinese at all, he has to collect money from the large masses without calling it a tax.
Are you catching on.....???? Health Care Reform isn't about health care (paying premium for four years up front, before benefits set in.......), Cap & Trade isn't about energy or global warming (government selling carbon credit for which it sets the price and which it creates out of thin air).....and anything else that comes down the road in the form of direct taxes....be it a war tax, or a mileage tax or a CO2 tax....etc, etc.....all is just an attempt to mollify the foreign bond holders by making the tax payer pony up for the debt and the interest on the debt the U.S. Congress voted.
When Treasury Secretary Geithner and President Obama insure the Chinese that they will get their "money", yet there is no chance in hell that they will, you can see why President Hu Jintao feels violated. Maybe a kiss on his behind will gain us a smidgen more of reprieve. Being subservient to overseas oligarchs seems to come natural to our chief executive. So please, Mr. President plant that kiss.....it might just buy us another month time.
Monday, December 7, 2009
Monday, November 2, 2009
Are We Coming out of a Recession?
On November 2, 2009 surrounded by his team of economic advisors, President Obama told the public that his administration saved the economy from the brink of a depression. He further declared that we are coming out of the recession, though an improvement in the job market may be lagging. Should you believe him or his economic advisors? I suggest that you do not.
The Obama administration, and the previous Bush administration promoted the expenditure of trillions of dollars for TARP and stimulus spending. To have saved thereby the banking system from a sudden and catastrophic meltdown after the failure of Lehman Bros., AIG and others, may be a proper claim to make. However, the banking system is not the same as the productive economy. To stimulate production and commerce, President Obama advocates the Keynesian approach by spending government money (debt). His approach to curing the economic ills is evidence that he understands little about how a political economy works. His economic advisors are seemingly unable to inform him, either on purpose or because they lack knowledge. The Keynesian solution simply will not work this time around. Quite to the contrary, it will lead to the feared depression. Here is why....
During past recessions, the spending of government (debt) to stimulate the economy could be justified because a $1 of spending produced $2, $3 or at least more than a $1 worth of productivity increase. With this process, the economy was sooner or later brought back into balance.
Spending by government today of a $1 to stimulate the economy only returns $0.80 of productivity. Much of the stimulus money ends up reducing debt, rather than as an investment in production and the creation of jobs. In other words, the more the government stimulates today, the deeper in the hole the economy goes.
That is why the TARP and stimulus money sits in the bank vaults at J.P. Morgan and Goldman, Sachs & Co., instead of being put into circulation. This is certainly good news for the monetary elite, because the money on their books guarantees against attacks on the financial system.
For the rest of us, this locked up money does nothing. The "happy talk" about coming out of the recession eminating from President Obama is just that, "happy talk".
The Obama administration, and the previous Bush administration promoted the expenditure of trillions of dollars for TARP and stimulus spending. To have saved thereby the banking system from a sudden and catastrophic meltdown after the failure of Lehman Bros., AIG and others, may be a proper claim to make. However, the banking system is not the same as the productive economy. To stimulate production and commerce, President Obama advocates the Keynesian approach by spending government money (debt). His approach to curing the economic ills is evidence that he understands little about how a political economy works. His economic advisors are seemingly unable to inform him, either on purpose or because they lack knowledge. The Keynesian solution simply will not work this time around. Quite to the contrary, it will lead to the feared depression. Here is why....
During past recessions, the spending of government (debt) to stimulate the economy could be justified because a $1 of spending produced $2, $3 or at least more than a $1 worth of productivity increase. With this process, the economy was sooner or later brought back into balance.
Spending by government today of a $1 to stimulate the economy only returns $0.80 of productivity. Much of the stimulus money ends up reducing debt, rather than as an investment in production and the creation of jobs. In other words, the more the government stimulates today, the deeper in the hole the economy goes.
That is why the TARP and stimulus money sits in the bank vaults at J.P. Morgan and Goldman, Sachs & Co., instead of being put into circulation. This is certainly good news for the monetary elite, because the money on their books guarantees against attacks on the financial system.
For the rest of us, this locked up money does nothing. The "happy talk" about coming out of the recession eminating from President Obama is just that, "happy talk".
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