Akkam’s Razor

What does this screencap from the BBC tell you (yesterday for US markets, today for european)…

I think we are definitely on the verge of badness, economically speaking.  Here’s why…

The DOWJONES has been losing momentum… having dropped 200 two weeks ago, 200 this week, and 99 yesterday.  There’s plenty of reasons why, but the main one is inflation, which is primarly the effect on prices being caused by increased fuel costs.  Gold is trading ridiculously high, and forecast to go higher still.  The real estate bubble has been pricked, houses are staying on the market longer, prices are going down, and foreclosures are on the way up.

The increase in the price of gasoline last year from Katrina still hasn’t manifested itself in the economy - it typically takes 8 months to a year.

Then there’s the other issues feeding into the maelstrom.

Pretty bad news, huh?

But BushCo. has a plan, don’t they?  Or are they going to pretend that none of this is happening?

As far as the current Administration is concerned, it’s not a problem that can’t be managed.

As voiced by Vice-President Cheney, “Deficits Don’t Matter”.  We’ve seen ridiculous amount of consumer debt being heaped upon Americans, which, to their own fault, they’ve gladly accepted.  At the same time, Congress, both Democrats and Republicans were changing the bankruptcy code to make it near impossible to get back to a clean slate.

The Bush administrations only tack with China appears to be some chest puffery and repeated whinings about currency manipulation - the reality is that until China’s internal market can soak up demand, both the US and Chinese economy are lashed together.

We’ve seen the results of the Bush education plan - student loan interest will now be decided by “the market” (by the way, righties like to insinuate that “the market” is made up of consumer demand - that is not the case - the market is set by the producer, with the price determined by what “the  market will bear” - ie., whatever they can get away with), resulting in rates jumping two whole percentage points.

We maintain our ignorance regarding global warming, subsidize domestic disaster recovery where politically advantageous, and sabre-rattle with Iran, further ratcheting petroleum prices.

The tax breaks haven’t created jobs, and in fact are not actually a tax cut, but are rather a tax shift.  And aside from some posturing on Social Security and Medicare, they have given very little to the coming demographic nightmare we’re about to be faced with.

This risky economic scheme is reminiscent of some of Bush the Youngers other forays into the business world, or  perhaps Enron or any of the other corporate scandals.

So, what’s the Bush answer?  Helicopter Money.  How do I know this?  They got rid of the money measurement indicator known as M3.  And exactly how much has M3 grown? (The red line is monthly changes; the black line is absolute money supply).  So  how do we get out of trouble?  Print more money.

Think back to high school, and how tales of Pre-WW2 Germans needing wheelbarrows of money to buy a loaf of bread, and how that level of economic despair led to the rise of the Nazis…