September 18, 2007
By John Galt
I would like to congratulate the absolute brilliance of putting an academic in charge of our nation’s economy. I was not sure what his academic qualifications were, but I did do a search to see if he wears his Romper Stompers when he makes policy. The logic of today’s decision and coordinated efforts to convince the sheeple that the U.S. dollar would rise in the face of these interest rate reductions was so will conceived, so contrived and so utterly unbelievable, that the bubblevisionistas did everything they could to sell this for the last few weeks and advising folks to buy financial stocks. Up until today, I would have called this advice suicidal. In reality, it’s not going to help. Dr. Marc Faber, Jim Rogers, and Nouriel Roubini all stated the honest to God’s truth today that this will not help our economy nor do anything to stave off a recession. With this, I am here to make a very sad, bold, prediction:
Dow 15,000 Sooner Rather than Later
In my opinion, not due to the strength of our economic fundamentals, but due to the creation of a hyperinflationary economy, we will see Dow 15,000. With that, I would buy the champagne, party hats and ingredients for the CNBC celebratory cake now instead of waiting. In about three months, all of those components will probably be about 15% more expensive, and that’s when all of you should be very, very, very concerned. This is not going to help the housing markets. You can not create more buyers in a depressed market even if you cut the interest rate down to 1.25%! People are out of money. Jobs have been and will continue to be lost. The idea that those poor souls who are about to be evicted will sacrifice their dinner, medications or necessities for their family is absurd. The average person is no longer able to carry more debt much less qualify for it. The banksters got what they wanted, enough of a break to insure they can play at the casino with our money for one more, maybe two more quarters. There will be two more rate cuts this year and it’s feasible that we will end up with a Fed Funds target around 4.00% by year end or in the first quarter of 2008 at the latest. The reason is simple and does not take much to figure out. Ben likes his new chair. He loves this position of power. He smiles when he sits in it, presses a button and banksters all run into the room all giddy with their hats in their hands begging for money. The choppers will need a major overhaul after today, and the American consumer is about to find out that the solution to a banking crisis is far more severe than just letting their local neighborhood bankster fail.
The New Cartertocracy
When I made the mistake of pressing the button for George W. Bush in 2004, again, I never realized that the mistake would come back to haunt me. The end of his Presidency will be marked as a mirror image of 1979, with the inflation rate to skyrocket, the world to look at us as a weak, pitiful power, and commodities to cause such serious problems to our economy, whoever gets elected will be inheriting a nightmare. I hope she’s up for it and Ben better keep reducing rates or she’ll whack him with a PMS purse load of misery.
The actions which our current economic and political administration(yes, that’s Democrats and Republicans boys and girls, no exceptions or favorites here) have created since 1999 will result in such a violent contraction after we hit Dow 15,000 it will be beyond reproach. Yes, we could easily experience a stock market crash with a sudden bank failure, but I think the day of reckoning has been postponed again. The wars are not going as something predictable as we are looking weak and floundering, oil is skyrocketing, Russia and China are on the rise, and Latin America is becoming a major problem for us. Sound like 1978? Yes, but I am talking about today, this very minute, and to make matters worse everyone sees our weakness. We owe the world trillions of dollars and it will not take much to make that figure double or triple in the next year or two. What President Bush has done in just eight years is allow his administration, this Congress and his appointee to head the Federal Reserve to recreate an eerily similar to the late 1970’s. Welcome to the Cartertocracy, a world where your pay will decline, your food and gas will skyrocket in price, and the nations of the world will look at us with disdain as a “former” power. This is the perfect environment for a disaster where a war is started elsewhere in the world and we are unfortunately in the middle of it because we are over-deployed, over-extended and bankrupt.
Mr. Bush, James Earl sends his thanks. History will not be kind in this regards when it judges the last eight years. The 1970’s were a living hell for so many of us who remember that time. For those of you who missed the fun, have no fear. The era of Carterism has returned, just in time for Christmas. And as our phony currency pumps the phony market indexes to new high, just remember what the groceries cost you today and in six months. As the champagne gets poured with the Dow 15,000 celebration, don’t choke on the bitter taste, but savor it. It’s not every day you get to witness the rebirth of a Republic.
The Weimar Republic, Carter style, that is.