Power of Story Send a Tweet        
Exclusive to OpEdNews:
OpEdNews Op Eds

Cold Comfort in Cold Beer

By       Message Richard Wise       (Page 1 of 3 pages)     Permalink

Related Topic(s): ; ; ; ; ; ; ; ; ; , Add Tags  Add to My Group(s)

View Ratings | Rate It

opednews.com Headlined to H3 7/19/08

Become a Fan
  (4 fans)
- Advertisement -

InBev NV’s acquisition of Anheuser-Busch Cos. Inc. this week serves up a sobering reminder of the impaired state of the US economy.

The dollar’s rapid decline internationally has devalued all dollar-denominated assets, from the currency in your pocket to the value of the building where you work and the value of your 401(k). And it has devalued the assets of US corporations to the point where many of them are now very attractive targets for foreign acquirers.

- Advertisement -

The InBev-BUD transaction illustrates the point: the aggregate sale price for BUD is US$52 billion, or about €32.7 billion. Had the exchange rate remained stable from the day George W. Bush was installed as president (when €1.00 = $0.83), the price would have been closer to €63 billion – far too expensive for InBev then or now.

But the exchange rate did not remain stable. Seven years of profligate financial management – including tax cuts, tax rebates, economic stimuli, years of unbalanced budgets, unmanaged spending, and an unfunded (not to mention unprovoked) war – have shaken the world’s trust and confidence in the US. The currency markets have responded accordingly, devaluing the US dollar to the point where the greenback has dropped 48% against the euro in just seven years.

- Advertisement -

Thanks to mismanagement on an epic scale, the US has racked up a $9.3 trillion national debt, a $6.4 trillion trade debt, and a projected $400+ billion budget deficit for FY 2009. We also have some $50 trillion in future commitments – Social Security, Medicare, veterans’ benefits, etc.

Add to that some $2.5 trillion in consumer debt and if becomes clear that we US citizens are presently on the hook for some $69 trillion.

When you think of that in terms of our GDP, about $15 trillion, we as a country are in debt for nearly five years' income. Could any of us handle that much debt and keep piling on more? I doubt it.

- Advertisement -

Our assets include about $50 trillion of real estate and $16 trillion in the value of the equities markets -- $66 trillion. Subtract the liabilities from the assets and you can see that we are basically insolvent on an economic basis.

Next Page  1  |  2  |  3

 

- Advertisement -

View Ratings | Rate It

opednews.com

Rick Wise is an industrial psychologist and retired management consultant. For 15 years, he was managing director of ValueNet International, Inc. Before starting ValueNet, Rick was director, corporate training and, later, director, corporate (more...)
 

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon Share Author on Social Media   Go To Commenting

The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

HOW TO AVOID THE UNION

WILL GOP REBUT OBAMA'S EDUCATION SPEECH?

"I Don't Want to Pay for Somebody Else's Health Care"

A Conservative's "12 Days of Christmas"

Reconsidering Iraq: What If We Had Been Greeted as Liberators?

FairTax: Too Good To Be True?