Sunday, August 07, 2011

For Love or Lack of Money

Just past the midway point of the 1990's there was a fellow who proclaimed that the end of the world will be nigh when the stock markets collapse. There was also much talk after 9/11 that one of Osama bin Laden's goals was to froce a Wall Street collapse (one of the reasons the WTC was targeted).

Those two items plus the burst "dot com bubble" got me more interested in the financial sector than I'd been at any other point in my life. That's why this blog carries a stocks chart in the sidebar. It is wise for everyone, old and young, to be educated on matters of global finance.
RIP Hugh Carey, the governor who helped rescue New York from the brink of financial collapse in the 1970s and tamed a culture of ever-growing spending, died Sunday at his summer home on Shelter Island. He was 92

CHINA: US downgrade 'sounds alarm bell'...

S&P Action Clouds Obama Re-Election Bid...

Now we have the S&P Downgrade and the "Second Recession" to contend with. If an S & P downgrade results in increased gasoline prices and interest rates on personal debts, I am wondering if thousands, perhaps millions of U.S. citizens will rise up and stop paying their mortgages, student loans, credit cards, etc. How bad can it, will it possibly be?

John Hogue calls it "Mickey Mouse Economics 101" ::: "The Fed had manufactured credit out of thin air the first half of 2011 to the tune of $600 billion by June. The flush of funny money goes out into the open market and buys securities, government bonds from all and sundry offering these on regular bond markets. Credit is thus created and that voodoo money enters the economy because our system uses fractured flickered fractional reserve banking. That means for every voodoo dollar worth of credit the Fed conjures out of thin air it multiplies credit value times ten."

And what's bad for us (as in people in the U.S.) is badder still for our President: Maureen Dowd in the New York Times Sunday Review thinks Barack Obama may have a bad case of the "Downgrade Blues" ::: Barack Obama blazed like Luke Skywalker in 2008, but he never learned to channel the Force. And now the Tea Party has run off with his light saber.

If we are to survive the looming catastrophe, we need to face the truth ::: The idea that a capitalist economy can support a socialist welfare state is collapsing before our eyes, writes Janet Daley.

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