Monday, November 8, 2010

They voted away the dream

You know things are getting bad when the head of the World Bank wants the world to go back on the gold standard. Robert Zoellick, World Bank president, said “leading economies should look at a modified global gold standard to guide currency movements“. Gold broke $1400/oz today and spiked to 1000 euros/oz as Mr Zoellick also questioned Ireland’s ability to pay its debts.

President Nixon in the early 70’s took the USD off the international gold standard established near the end of WWII by the Bretton Woods Accord. He had a serious problem with the debt he had run up with the Vietnam disaster and in order to inflate his way out of it, the gold standard had to go.

If we were to actually go back on a gold standard, some experts claim that the amount of USDs in circulation would require gold to be in the range of  $6000 to $10,000/oz. This is of course a totally made up number and shouldn’t be seen as a reason to dump your canned goods and buy gold from Glenn Beck. The problem is that there are way too many USDs in circulation as Wall Street has been using them to try to dominate world markets and they don’t represent our real economic needs. This needs to be resolved and simply going a gold standard wouldn’t do that.

President Obama was out courting a new girl friend over the weekend telling India that she is pretty and really deserves to be on the student council, but Obama doesn’t seem to realize the high school girls all talk in the locker room. Pakistan wasn’t at all happy with him sweet talking India and the Prom Queen China has a veto on the council so it‘s not likely to happen. He also told Japan the same thing when he was over at her house so none of girls take him seriously anymore.

Some people think that Obama is courting India by endorsing their hopeless bid for a permanent seat on the UN Security Council as a thumb in the eye to China, signaling that he sees them as the enemy and not a partner. India definitely sees China as an enemy and many there see war as inevitable. India has a much larger nuclear arsenal than China but China has eclipsed them in technology thanks to the treasonous behavior of US corporations giving the Peoples Republic all manner of strategic information.

The few things Obama has to offer India include access to US technology and advanced weapons systems (India can’t buy them from China). India in return will give more open access to India by US corporations so they can sell the stuff they make in China in India. Other than fueling an arms race that could easily lead to WWIII there is very little Obama can do for US trade given the suicidal trade policies put in place over the last forty years by Republicans. This was of course made possible by spineless Democrats that saw big business as the future and labor unions, small business and the middle class as the obsolete past.    

You can’t really blame Democratic politicians given all Reagan Democrats who saw themselves as capitalists after decades of New Deal policies had put them in squarely the middle class and then they voted like they were millionaires. Some pundits say it was a high turn out of Reagan Democrats that caused the widespread bloodletting in this election.

After coming back to the Democratic party in the last two elections they were seduced by the Tea Party’s simplistic slogans this time and again voted like they were millionaires. They really want to believe in trickle down economics, they really want to believe that will get their kids and their grandchildren out of their basement and into the middle class dream they voted away in 1980.