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Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

 
Best of Aubie Baltin
March 5, 2010
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Thanks to the endless barrage of Government feel-good propaganda, most citizens have no idea how disastrous the country’s fiscal, monetary and economic problems truly are. Nor do they perceive the rapidly increasing risk of a totalitarian nightmare descending upon the American Republic. According to the Federal Reserve’s most recent report on wealth, America’s private net worth was $53.4 trillion as of September 2009. But at the same time, America’s debt and unfunded liabilities totaled at least $120,000,000,000,000.00 ($120 trillion), or 225% of the people’s net worth. That comes to $389,610 from each and every citizen.  And that’s not counting State, County and Municipal debts and deficits, which are additional and already elephantine in many states (e.g., California, Illinois, New Jersey and New York) and still growing at alarming rates nationwide. In addition to the Federal Government, dozens of states are already bankrupt and sinking deeper into the morass every day.

FOR STARTERS

Since everyone in the private sector must cut back while their taxes are being increased up and down the line (from their phones to car registrations to Beer and Soda all the way up to income taxes), how about an across the board freeze on all Government hiring? Government employees earn on average double of what the private sector earns. Why not institute a 5% pay cut on all Government full time employees earning $75,000 or less and 10% on those earning $75,001 and more. This would apply to all pensions both present and future. All Cadillac Health Care plans would also be cut back to an average plan that the rest of the population must live with. This too would apply to all plans taken over by the Government due to company bankruptcy.

Forget about Greece and all the problems of the PIGS countries (that’s Portugal, Ireland, Greece and Spain). If you haven’t been keeping up with the financially unstable “sick men” of Europe, their problems are minor when compared to those of America. And they are not fighting any wars.
We are headed for a terrible reckoning, right here at home. We have spent like drunken sailors—$7.2 trillion in new debt—with little if anything to show for it. If Washington grabs control of health care, 33% of the GDP will have been nationalized in less than one year. The "official" number for our debt load is $12.3 trillion, but the nasty fact is that it is OVER $100 trillion, if you count our Social Security and Medicare obligations.
In the mind of most economists, especially Bernanke, Camouflaged Default, in the form of the total debasement of the dollar, is now his only option.
Emerging Trends

To begin with, we are facing a Chinese slowdown in growth or possibly even a Recession, due to their massive over-capacity and resulting unemployment as factories shut down, due to a huge shrinkage in their exports.

Secondly and what would be much more Dangerous is a possible Chinese banking system meltdown, similar to what happened in the USA.  Both are brought on by the exact same reasons: Massive Speculation brought on by easy credit and ultra low interest rates that are now causing ever increasing amounts of bad loans. China's huge stimulus spending (4 times larger than the US stimulus in relation to its economy’s size) in their efforts to avert a similar Bust in Real Estate caused even more massive overbuilding and huge land speculation.
 
If all that is not enough to shake your boots, perhaps even more dangerous will be the FED’S attempt at an exit strategy from their QE, without crashing both the Stock & Bond markets as well as the Economy.

CONFIDENCE

Consumer Confidence plunged in February. The reading fell to 46 from 56.5 in January, a clear indication that things are getting worse not better. The massive number of unemployed and what is worse, of long-term unemployed, means we are seeing millions of people falling from middle class status into poor. But what is also reflected in this confidence number is the fear that what has happened to others can happen to you. The result is cut backs both in spending and investment as we migrate from Capitalism to Socialism under this Central Planning Government.

WHAT ABOUT THE HOUSING AND GDP NUMBERS?

 I warned you all back in January that the Government’s economic statistics were unrealistic; they were either complete fabrications or they were borrowing from the future, which must then be paid back. Well, the future is NOW! My guess is that all the fabrication was done in their mad rush to pass health care.

THE FDIC IS INSOLVENT

The FDIC reported that its reserves fell to a $20.9 billion deficit. They will now have to replenish their reserves through fees on banks, and borrowings and grants from the Central Planners. As of year end, there were 702 Federally Insured Banks on the FDIC's "problem bank list." That is one in 11 banks. As I have been warning you, commercial real estate loans are now going bad at alarming rates. This is the next major blow to hit banks and our economy. Meanwhile  Nero fiddles, while Wall Street and the mainstream media sing his tunes.  140 banks were shut down by the FDIC last year and 20 have been closed so far this year. That means one out of 10, not one out of 11 is now in trouble.