World markets were down sharply today on the news that Greece has had its credit rating downgraded and the word is that the Dubai crisis won’t be resolved anytime soon despite a sell off of Dubai World’s overseas holdings. Gold continued going down as the Dollar continued to strengthen against other currencies. Oil was down again reflecting the continued decline of the economy.
A survey of US companies found that at least half of them will continue to layoff into the new year and the rest won’t be hiring that much. President Obama unveiled an array of new ideas he would like to use to encourage more hiring. He didn’t say how much he intends to spend on this. He has a so-called windfall from the TARP program of 200 billion that is coming back from the big banks who want to pretend they are making money to justify their obscene bonuses.
In reality the banks consider this money chump change compared to the trillions they got from the Fed. They’ve been able to use the Fed money to churn the markets worldwide and are just wallowing in profits. The reality is of course is that they aren’t creating any new wealth, they are just harvesting it from pension plans and other such investments made by the unwary. It looks like everybody is making money but when the markets plunge to about a third of what they are now the accounting will take place. The rich will be richer and the middle-class will disappear for good. The really rich don’t play the stock market.
If the Dollar continues to strengthen this accounting will come sooner rather than later. Greece won’t be the only country that can’t pay its bills. The US can ride the strong Dollar for a time but a strong USD means more out sourcing and more unemployment. Two hundred Billion won’t make a dent in that and there will be more calls for working people to accept lower and lower wages.
Fed Chairman Bernanke wasn’t kidding about cutting Social Security either. The conservative wet-dream about the government being too broke to pay entitlements is getting closer everyday. Even if the talk about taxing the rich were to come to something it probably wouldn’t be enough anymore. The economy needs to be totally rebuilt from the ground up or it will just continue to deteriorate. Any boost from stimulus will just be a bubble if the same parasites are left in place. www.prairie2.com