Keep Digging
link Fed Officials Avoid Talk of Further Stimulus to Stoke Growth – Bloomberg.com.
When you read articles like this, it makes one wonder just which world government officials live in. Without regard to any partisan bias, when you compare the utterances of people supposedly in charge and presumably in the know, to the situation out in the real world, the two versions of reality are comically different.
“…Atlanta Fed President Dennis Lockhart said yesterday that while the recovery isn’t sustainable enough yet to warrant raising interest rates, he doesn’t see a need for additional asset purchases to aid the economy…”
The recovery isn’t sustainable enough yet….hmm. As the late Gary Coleman may have said, “whatchu talkin’ bout Willis?” Using any measure of non esoteric statistics, especially ones that actually affect people’s every day lives, the economy in the U.S. and therefore the rest of the world has been on a train to crashville for almost 2 years.
Arguably, only a few measures are required to gauge the strength of the economy and by extension, the welfare of the nation. Employment statistics and home sales are right at the top of the list. Without the derivative wealth creation effect caused by the health of these two statistics, it is hard for any economy to grow. According to the bureau of labor statistics, http://research.stlouisfed.org/fred2/data/UNRATE.txt, the unemployment rate has moved from 7.7% from January of 2009 after Obama’s election, to 9.7% as of May of this year, after briefly flirting with 10%. In a nation of 300 million plus people, that’s a difference of 6 million people who are not gainfully employed.
Let us not forget that the unemployment statistics are distorted somewhat by the hire of thousands and thousands of government employees to oversee the census. So, without these temporary workers, the numbers would be much worse.
So what? Well, if you have a large part of the population not gainfully employed, paying mortgages becomes problematic unless you happen to live with your parents. As long as they have room for the 2 kids, all is swell. In general though, inability to pay mortgages means stagnation in home prices as supply overtakes demand. As of today, http://finance.yahoo.com/news/Pending-home-sales-plunge-rb-292307626.html?x=0&.v=3 they announced that pending home sales plunged 30% in May from the previous month, again distorted somewhat by the expiry of tax credits designed to stimulate buying.
Yet despite all of this evidence combined with the downturn in manufacturing, the ongoing sell off in the stock market, the ravaging of banks and collapsing consumer spending, we still observe government officials insisting that all is well and the ongoing debt balloon must continue to expand. Even more money must be borrowed to sustain what are obviously ill conceived policies. The president is still making election style speeches about how past polices didn’t work and that moving forward is his vision. Good rhetoric for the fans, but the course planned appears to be headed for the abyss.
Perversely, there are still exists in the U.S. as well as elsewhere, a large, lemming like part of the population that supports the direction of policies favoured by the administration with Jonestown-like conviction. They’re still passing around the Kool-Aid like it was bee nectar. Say what you want about skills in oratory, history will show that this president’s greatest skill was the ability to impose mass delusion among otherwise intelligent people.
What’s happening in the U.S. is reminiscent of the old Monty Python skit where John Cleese is trying to return a dead parrot to the shopkeeper Graham Chapman. It aptly depicts what’s going on now. http://www.youtube.com/watch?v=4vuW6tQ0218