-- Posted Wednesday, 25 March 2009 | | Source: GoldSeek.com
The ability of the United States Federal Reserve and the United States Department of the Treasury to administer the national currency and bank account is being severely undermined by policy moves that erode the faith of international holders of U.S. debt. The situation is exacerbated by the disingenuous attempts by these same offices to obscure the severity of the dilutive effects of unbridled money fabrication in press release language that is blatantly dissembling.
George Orwell should be slapping himself on the back in congratulations for the foresight with which he predicted the advent of DoubleSpeak, whereby the government pretends that negatives are positives. Assisted in large part by broadcast media, who lend the appearance of legitimacy by debating the pros and cons of the sundry policy machinations in all seriousness, the rest of the world is not so easily fooled.
Take, for example, the Fed’s announcement that it was going to spend $300 billion in the purchase of long term U.S. Treasurys. Does that agency honestly believe that that press release would obscure the simultaneous rollout of expanded Toxic Asset, or, as they have been translated into DoubleSpeak, “Legacy Assets” expenditures totaling an additional $1.5 trillion?
The long term effects of such tactics are translated into diminishing investment in U.S. debt instruments, and maneuvering by current debt holders among themselves to establish contingency strategies for the dollar’s ongoing value deterioration. The recent trade initiatives between Russia and China are offered as evidence in support of that.
The prognosis for global confidence in the U.S. economy and currency is further complicated by the fact that the nation’s own celebrated economists weigh in heavily on the critical side.
Paul Krugman, a Nobel Laureate economist and New York Times columnist said, “"This is more than disappointing," Krugman wrote in The New York Times. ""In fact it fills me with a sense of despair."
"The Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt," the Princeton University economist said, citing weekend reports outlining the plan.
"This isn't really about letting markets work. It's just an indirect, disguised way to subsidize purchases of bad assets," he added.
Christina Romer, head of the White House Council of Economic Advisors disagreed on ABC’s “Good Morning America” TV program.
"This is really tails both the government and the private sector win, heads both the government and the private sector lose. We both are going to have, as the saying goes, skin in the game”, she said.
The difference here is that the U.S. Treasury and Fed’s ‘skin in the game’ is fabricated out of thin air and based on nothing tangible or material. The balance sheet is exploded by a factor of 3 -4 over six months while the economy on which it is based contracts by a minimum of 1% over the same period. How is that ‘skin in the game’?
Again, the world won’t be fooled by such disingenuousness, and the dividend for such a strategy will likely push the United States economy the rest of the way off of the cliff, where, like Wile E. Coyote in the Roadrunner, realization of the doomed plan will occur at a point where it is too late to offset the inevitable. Many believe that point has already been passed, and we now just wait for the inexorable approach of complete U.S. economic destruction.
The world’s population is firmly and distinctly divided into two camps at this point.
There are the (mostly) journalist types and market participants of superficial comprehension of monetary system mechanics who echo the governments around the world in forecasting a short duration for the current recession, and the eyes wide open majority who can see the fundamental fallacies in the government’s laughable posturing, like the poor rube who thinks the crowd is laughing with him when they are really laughing at him.
Little Timmy Geithner and his polished President Barack Obama are oblivious to the erosion in confidence now underway in their administration, their economy, and their currency.
The G20 summit in April will be a repeat of the inconclusive event held in Washington last year, where George W. went out of his way to demonstrate his redundancy by proclaiming that any solution to the financial morass in which we now bathe would have to be a U.S. led solution.
Barack Obama now runs the risk of becoming a laughingstock for a growing number of reasons, not least of which is his election to address the public through the agencies of late night talk shows like The Tonight Show.
He really needs to stop looking so admiringly at his reflection and tend to the fire threatening to consume the entire nation. Its not too late. Or is it?
-- Posted Wednesday, 25 March 2009 | Digg This Article
| Source: GoldSeek.com
