THE ECONOMY DOOMSAYERS ARE THE BIGGEST PROBLEM

The recession has caused a lot of pain to a lot of people, in fact pretty much everyone in my part of the world. The headline news focuses mainly on the banking sector which is and will be the sector most watched to lead us out of this downturn. The banks with their greed and vile ways got the world into this mess and will be vilified for years to come for it. If the banks are looking for  sympathy for their predicament they can find it in the dictionary between shit and syphilis. 

The greed of these bankers may have got us into this mess and the governments unwillingness to let them fail will mean that they will have to be relied on to lead us out of it. They don’t deserve the honor. 

The fact is that some CEO’s learned their lessons well, during the last recession, and have managed their finances well and are prospering in these hard times. Unfortunately even as good as their balance sheets are and as good as their company prospects are they couldn’t get financing to expand and create more employment because the banks in their infinite wisdom would not lend to them anyway.

Protectionism will not be the problem prognosticators are expecting it to be. Companies are so globally based that they have manufacturing plants and parts suppliers all over the world making it impossible for protectionism to take hold.

Credit card debt has not gotten out of control the same way that mortgage debt has and is not likely to, given the bank and credit card companies tighter requirements.

The US dollar as diluted as it is, is still the default currency of the world and is still the strongest because other world economies are in dire straits as well. 

India will be the bright spot in all this going forward because they are starting at such a low base that their GDP will still be up by 5 to 6 % simply because of their poverty stricken poor people being able to now afford to buy simple staples such as food and soap.

On the other hand, China has become reliant on world trade for their rise to their present level of prosperity and with the downturn in world economies China’s export based economy has begun to suffer as well. China’s growth rate will drop from 11-12% to, I would expect 3-4% before starting to grow again, which is still growth even if it is slower.

President Obama and his henchmen and allies are talking such disastrous economics in order to get their stimulus package into law. It’s true there are problems and we are in a recession, but we have been here before and it has to run it’s course to allow the economy to grow again. The stimulus will probably get the economy moving again but the way I see it, it will have to be reined in very quickly once the economy is on solid ground or the problems down the road will make today’s problems look like a walk in the park.

Trivia - In Providence, Rhode Island, it is against the law to jump off a bridge.