A Retirement Society
by Bill Bonner
London, England
Higher stock prices; fewer jobs...
And don't forget the foreclosures. They're running 23% ahead of last year...even though they weren't as bad last month as last month.
Associated Press:
"The number of households caught up in the foreclosure crisis rose more than 5 percent from summer to fall as a federal effort to assist struggling borrowers was overwhelmed by a flood of defaults among people who lost their jobs.
"The foreclosure crisis affected nearly 938,000 properties in the July- September quarter, compared with about 890,000 in the prior three months, according to a report released Thursday by RealtyTrac Inc. That puts foreclosure-related filings on a pace to hit about 3.5 million this year, up from more than 2.3 million last year."
What an economy!
The Dow is now back over the 10,000 mark...just where it was in March 1999 - 10 years ago. Is that progress...or what?
During that time, the dollar has lost about a quarter of its purchasing power. That means stock market investors have lost only about 25% or their money over the decade. Not too bad, huh?
And, oh yes...they've lost their jobs too...
AP continues:
"Unemployment is the main reason homeowners are falling into trouble. While the economy is likely out of recession, the unemployment rate - now at a 26-year high of 9.8 percent - isn't expected to peak until the middle of next year."
But hey...we're not going to complain. We've got a job - trying to figure out what is going on. And that is a job that is recession-proof. Everyone wants to know what will happen next. When times turn tough they want to know even more.
So, will someone please tell us what is going on...we want to know too!
"What do you think?" asked a friend at dinner last night. "The way I see it, Obama's goose is cooked. He's stuck. He can't go forward and he can't back up. He can't back away from all those promises - including his promise to rescue the US economy. If he does, the voters and his own party will revolt. On the other hand, he doesn't have the money to go forward. He has to borrow it. And if tries to borrow much more, the Chinese will revolt.
"His only hope is that the economy revives...so he doesn't have to do anything. And that's not going to happen."
Why not? Wait a minute...you already know the answer to that question. Because it's a depression. It's the end of the road for the consumer credit economy.Consumers did their best. They borrowed as much as they could. They spent like there was no tomorrow.
But now, it IS tomorrow. And now, they've got to settle up. So, boo hoo...no more wild parties. Daddy took the T-bird away. Get over it.
What should Obama have done?
Because Harding didn't do anything; it went away.
But that was a long time ago. Now, presidents are expected to do something. They have too many people around them who stand to make a buck out of it.
Yesterday, Goldman announced its quarterly earnings. Goldman, you'll recall, is the firm that former Treasury Secretary Henry Paulson (a former Goldman chairman) called 13 times before breakfast during the financial crisis of last September. And Goldman is also the firm with its men in key posts in Washington, helping the feds figure out what to do with trillions of dollars in bailout funds (TARP, TALF, Fed's buying toxic assets, etc.)
Well, what a coincidence...now the firm says its latest profit is four times what it was a year ago.
The firm's "activities have become more profitable after the crisis reduced competition and governments injected funds in the banking system," says The Financial Times.
Goldman can borrow the funds at almost no cost. Then, it can use the money in a variety of ways...such as lending it back to the government for guaranteed profits...or speculating on oil or gold, or whatever. Not for nothing is gold is up 17% in the last six months. If you can borrow at zero cost you can do a lot of speculating. Many speculators are using the government's money to bet against the US dollar - and making a lot of money.
The US government has put $13 trillion of the nation's money and credit on the line. That's how much the feds have at risk on all their toxic asset purchases, loans and guarantees. Apparently, Goldman gets its share.
[If you still aren't convinced that this recovery is a fraud, through and through - and that the feds are robbing you blind, read this free special report. In it, you'll find your financial defense strategy - something that might come in handy in the months ahead. Get your free copy here.]
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