Good Morning Middle America, your King of Simple News is on the air.
An interested reader and cohort in the dismal science of economics asked me what happenings my research had suggested would occur, due to our increasing debt and our reliance on foreign investment. Let's look at the crystal ball with the help of my patented "Mikeronomics."
The financial situation is further compounded by our Federal Reserve lowering interest and flooding the markets with funny money in an effort to bail out the banks. I might say that 'not' doing so would see the country free-fall into recession.
So then are the Federal Reserves actions the proper thing to do? To fully comment on that subject would require a 20 page answer. The short answer is that it really doesn't matter what the FED does, recession is coming to a neighborhood near you.
The danger in putting off the inevitable decline by artificial means, strengthens the possibility of hyper-inflation to a near certainty. But then, that's the good news.
The bad news, simply stated, is this: The Chinese, Koreans, East Indian's and other emerging nations depend on our import economy along with a measure of our technology and manufacturing principles, for a period of time as may be necessary to establish the infrastructure in their home lands to effectively practice domestic expansion.
That's a mouth full, but it boils down to the fact that they will soon no longer need the U.S. to further their best interests; at least not Middle America. Ouch!
These aforementioned countries collectively loaning us some $3 Billion per day is simply the price of financing the foundation necessary for the stated purpose of becoming independent of the U.S. When they do eventually come collecting their debts, it won't be pretty. We WILL see hyperinflation at some point.
Theirs is of course the same model that the U.S. used until such time that we reached zenith (which I believe was around 1975). In America's infancy, the finest craftsman, machinery and methods from Europe were imported and employed until such time that we could get our legs. Eventually, Europe needed us, more that we needed them.
Cheap labor from African slaves and imported Chinese (the latter were denied citizenship) were used to get the show on the road (yes, a lot like China). We then simply expanded (principally within our own borders) until such time that domestic expansion no longer floated the proverbial boat. Think NAFTA and the WTO at this point.
America's Middle Class necessarily became a higher cost replacement for the slaves, Chinese, and a host of other second class citizens, when the exploitation of the aforementioned became increasingly unacceptable after the Civil War. Just a reminder, the top 1% of Americans today control more money than the bottom 90%.
The Chinese, Koreans, Japanese, East Indians and host of other emerging countries, at this juncture, can easily consume all of the natural resources on earth in an effort to continue to fuel their own domestic growth. We schooled them well.
The U.S., with our 4.8% of the global population, consumes 25% of global energy and 30% of global materials. Uh-oh, here comes the math problem.
The new economic game will be similar to the "odd man out" scenario. Transportation, fuel and other natural logistics will favor the Asian nations (along with Russia) forming an alliance for intra-country commerce with China leading the way. The first Chinese war ship since WW-II, tied up in Japan last month. The South Koreans are building a railroad into North Korea.
Where do you see Middle America fitting into this picture? What we need is leadership to protect us from our leadership. Real soon! If you are considering electing main stream politicians in November, consider re-reading this short blog and telling me where I was wrong. Consider Congressman Ron Paul. Something has got to give.Wake up Middle America, the writing's on the wall.