World Economy

I almost forgot a nice piece of information.  In case you didn’t know, the world economy revolves around ours.  So you tell me, what do you make of the following statement:

The worst financial crisis in two generations has erased $14.5 trillion, or 33 percent, of the value of the world’s companies since Sept. 15; brought down Bear Stearns Cos. and Lehman Brothers Holdings Inc.; and led to the takeover of Merrill Lynch & Co. by Bank of America Corp.

Oh the joy…

The Root to all Evil

So maybe the picture I made is a bit of a stretched hyperbole, however, you get the idea.  According to a recent article on Yahoo Finance, should Congress pass Obama’s stimulus bill, it will make the U.S. government’s total for trying to solve our financial crisis a sum of about $9.7 trillion dollars.  Conincidently, this same amount is enough to pay off 90% of the nations mortgages, which in essence gives you an idea of how much liability is floating around the U.S.

So ask yourself this question:  We have heard of the $700 billion bailout, this new $826 billion stimulus, and last year’s $168 billion stimulus payment, what happened to the other $8 trillion?  Makes you stop to think doesn’t it? Supposedly most of that money has gone to pledges made by our U.S. government to help get us through this financial crisis, but you know our government, and that lie “fact” can be taken to the bank, which isn’t the best place to go as they might use whatever to take to them to payoff their CEOs.

Still don’t understand the magnitude of our debt, let me break it down even further.  This massive amount of money is equal to paying each person in the U.S., man, woman, child, a sum of about $1,430 and is about 13 times the amount spent in Iraq and Afghanistan.  Ridiculous isn’t it?  And they said this war was what was expensive; think again.  In fact I think the war is a good thing.  Just ask Roosevelt what he thought about the war?  What do you think got us out of the Great Depression, yeah you guessed it, the war.

I do admire one group of individuals over at Bloomberg who have decided to sue The Fed.  Yes you heard right, sue The Fed.  Basically they want some more disclosure on the amount of lending and to who the money has been going to.  I myself wouldn’t mind knowing too, as in case you didn’t already know, when I say $9.7 trillion, I mean $9.7 trillion taxpayer dollars.  Want more fuel?  They plan on spending another $200 billion in asset protection for banks and other financial institutions and have pledged more money to the Bank of America and Citigroup securities.

Call me crazy, but how is it logical to try and fix debt with more debt?  That is like having two maxed out credit cards, and paying half of each by using a third credit card.  Granted this is normal practice to save on APR, however, in the government’s case, they are then going back and maxing out the first two cards again and maxing out the third newly acquired card.  Obviously this analogy is a bit simplistic, however, the general idea is the same.

I know we have to spend money to make money, however, when does it stop? When do we begin to realize that while taxcuts are a nice security blanket to sleep under, as well as a nice pacifier for the American people to suck on so we can somehow feel at ease with everything else that is going on ,taxcuts are not the answer.  Taxcuts just make us taxpayers feel warm and fuzzy and reduce government revenue, causing them to seek funds elsewhere, and I can’t imagine who they would turn to.

The topic of the bailout may be over played and over heard at this point, however, with good reason.  Should the government continue down this path, expect the dollar to be worth peanuts, expect inflation to kick into 5th gear, expect unemployment to continue rising, expect the going rate to slowly creep its way back up and expect the supply of money to either become scarce due to more government issued lending or due to the simple fact that it just won’t exist.  See if that makes you feel warm and fuzzy….yeah didn’t think so.