Good Morning Middle America, your King of Simple News is on the air.
I searched for some good news to start out your Friday and could only come up with the facts that it is in fact Friday, and the sun once more rose in the East.
It appears that we may have turned that corner that I have been warning about, you know, dead man's curve.
We have become so hardened to bad news that we don't recognize it any longer. The papers read; 18,000 laid off by the airlines, GM to furlough 40,000 workers and bankruptcy is not out of the question, Ford to halt production in six additional plants, 50 American soldiers killed in roadside bombing, Foreclosures rise by 53% in June, Oil sets new record above $146, Employment drops 62,000 in June for the sixth consecutive month and the Americans who remain employed reply, "Did you see that they have avocados on sale at Safeway?"
I believe that we have reached the end of an era; but nothing similar to past eras. In the past, the American Revolution forged the way to a free country with unbounded hope, the horse culture gave way to the industrial revolution and was considered a step in the right direction, WWII ended and America flourished. This era will end very differently.
For the first time in the short history of this country, we will regress rather than progress. I believe that we have reached mathematical zenith for the possibility of continuing the economic basis of exponential expansion while maintaining our current lifestyle.
We can and will go on just as Calcutta, Bangladesh, Mexico City and other such impoverished areas have gone on. In fact, our policy of massive immigration and unchecked borders double guarantees that outcome. We have the remainder of the world for a living breathing model to that reality.
In my opinion, housing will never recover. Not even to a former shadow of the ruse that was perpetrated on the American public by our past leadership. Fannie Mae and Freddie Mac, who together finance some 75% of U.S. mortgages, are insolvent. The news today that our federal government may take over these beleaguered giants, is terrifying.
I have tried to warn my readers that this day was coming for more than two years.
Who will take over the remaining failing banks, GM, Ford, and the Airlines? Where will the money come from? Our federal government is more than $63 Trillion in debt, yet they will pass rules, gain power and eventually take over.
Sweeping reform is making its way through Congress at this moment to give the Fed massive new powers to control our money and to bail out those failing institutions that they see fit.
Yet, the very Fed who will soon wield this power, is very much culpable for the situation that we find ourselves in today. Both Alan Greenspan and Ben Bernanke have believed they could inflate their way out of any mess, regardless of the magnitude. Both understood that it was temporary, but America's economy has always been temporary.
We operate four years at a time, each administration knowing that exponential growth and infinite consumption was not possible in a finite environment. Each making policy changes that masked the deteriorating underpinnings of the inevitable time when there was not one more skinny rabbit to pull out of the politicians deceptive hat.