Get Real about US Economy

Are you tired of all the economic cheer-leading in the media?  This might shut them up for a while.  Real GDP growth in 2011 a paltry 1.7%.

The U.S. Economy is not in Recovery as the government and TV pundits would have us believe.  Remember, most of the reporting on TV and in Newspapers is done by people who have a vested interest in your money.  They want the economy to improve so their investments will improve.

The Government spins positive economic news all the time because that's their job.  Have you ever heard any President of the United States announce that the economy is in the tank and we're all doomed?  Of course not.  A lot of what makes a free-market economy run is faith - if you have faith in the system and the country you are investing in then you will spend money.  When you lose faith, the economy suffers.

I'm a member of the television news media, and my fellow journalists are drinking the same government Kool-Aid we all drank before the 2003 invasion of Iraq.  Yeah, of course Iraq has weapons of mass destruction, remember?  Now it's, yeah, of course the economy is improving.

The dismal GDP numbers released today come one day after a report on the worst new-home housing sales ever in 2011, and other less headline grabbing news about India switching from dollars to gold to buy oil.  Oh oh, didn't see that one did you?

The problem is, no one can save the US economy from the mess it is in now.

I recommend reading three books:

Leverage: How Cheap Money Will Destroy the World by Karl Denninger and Charles Hugh Smith

Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown by David Wiedemer, Robert A. Wiedemer and Cindy S. Spitzer (Aug 2, 2011)

Crash Proof 2.0: How to Profit From the Economic Collapse by Peter D. Schiff and John Downes (Nov 8, 2011)
 

All three of these books are by authors who forecast the disastrous bubble bursts of the 2008 recession (giving them instant credibility in my book)  They all dispute that we have ever been in recovery, warn us again about inevitable bubble trouble with the U.S. Dollar and U.S. Debt and they correctly point out that the only reason we've seen any hint of recovery in stocks is only because the government keeps printing money like a mad hatter. (See QE1 and QE2 with QE3 most likely to come). 

No wonder President Obama wants to desperately cut military spending in a time of great international danger.  When the dollar collapses in value, sending interest rates and inflation skyrocketing, the feds won't have enough money to pay the interest on our debts, much less pay for combat anywhere.   

Don't take my word for it - read the books.  

 

 

Massive Defense Cuts

The Pentagon announced its budget today for the next fiscal year - actually cutting some costs, about 100,000 troops, mothballing ships, and parking some of the Air Force inventory.

This may actually be a good move.  The administration wants to shift its focus to Drones and a bigger presence in the Western Pacific, which are good ideas.  The Pentagon bureaucracy is bloated and stuck in its ways.  There will be no Soviet invasion through the Fulda Gap, so its time to ease back a bit on a large conventional force.  There aren't too many M1A2 main battle tanks fighting the Taliban in Afghanistan are there?  There are no F-22 Raptors fighting it out with anyone's Islamic Air Force, huh? 

A smarter, more hi-tech force is what we need. 

And this is no massive isolationist draw-down (like post WWI) that many of Obama's critics would have you believe.  We have enough firepower to destroy the world five times over.  Lets be smarter, quicker, more mobile and more capable of responding to asymmetric threats.

Like this - we're one step closer to a real invisibility cloak  It may soon be reality, not just science fiction.  Cool stuff

Did Iran Just Blink? More Likely a Stalling Tactic

Iran threatens to halt all oil sales to the E.U. causing prices to spike for a time.

This, just after the President of Iran announced to the world today he is ready to re-new talks on his nation's nuclear activities.  But at the same time he said Iran will not under any circumstances halt or curtail the enrichment of Uranium for peaceful purposes.  Then what is there to talk about?  This is just another stalling tactic.  If the U.S. and the E.U. delay their embargo of Iranian oil, then it works.

Here We Go

The EU just slammed Iran with new Sanctions - cutting off the flow of Iranian oil to all EU nations.  At the same time, a three nation flotilla centered around the Abraham Lincoln crossed into the Persian Gulf through the Strait of Hormuz without incident.

But Iran says it will still Close the Strait, despite whatever the American Navy does.

We are entering a very dangerous new phase of action against Iran that could turn efforts to reach a peaceful resolution of Iran's suspected nuclear activities into a full blown war.  Keep your fingers crossed that Iran doesn't take the bait, and doesn't want to see its Navy destroyed.

But hold on, it could get even worse.  If the Chinese don't back the embargoes, and instead backs Iran, we're looking at a whole new dimension.  The Chinese and Russians have already said they will NOT back further UN sanctions in the Security Council (and they wield Veto power).  That's why the unilateral action by the EU and proposed unilateral action by the U.S.  If the Russians and especially the Chinese stay in Iran's corner on this - well, you use your imagination and get back to me.

Counterstrike

For all of us disgusted by the actions of our government - in the back pocket of Hollywood lobbyists - by Taking down Megaupload.com yesterday will be happy to know its action has come at a steep price.

24-hours after the government move, www.DoJ.gov is still down.  So are other government and media sites who are behind the blatantly unconstitutional restrictions on the world wide web.

Here's a clip (is this illegal now, are the feds going to close me down?  Oh, I hope not.) from the Guardian, a UK site bemoaning loss of internet freedom across the Pond.  Good grief, even the British feel sorry for us:

The US government has closed down one of the world's largest filesharing websites, accusing its founders of racketeering, money laundering and presiding over "massive" online privacy.
According to prosecutors, Megaupload ilegally cheated copyright holders out of $500m in revenue as part of a criminal enterprise spanning five years.
A lawyer for Megaupload told the Guardian it would "vigorously" defend itself against the charges, dismissing the criminal action as "a civil case in disguise".

I don't know why the Pentagon is spending billions of dollars to keep up with the Chinese military buildup in the Western Pacific when our government is acting like the Communist Chinese more every day.

Anonymous is rapidly becoming the Robin Hood of our age, and you can thank government corruption and big media bribery for all of it.

When it comes to the new piracy bills before the House and Senate - it looks like the movie and recording industry lobbyists are going to have to grease a few more palms - this one is dead.  

The Long National Nightmare Continues

Iranian newspapers are calling for a retaliation strike against Israel - the U.S. Navy will shortly have three Aircraft Carriers in the Persian Gulf region - the stock market is crashing on word of lower bond ratings for France and other European Union Countries - Obama wants to raise the national debt another one and a half trillion dollars or so.  But the real National Nightmare:  43% of Americans actually believe God had something to do with Tim Tebow's play for the Denver Broncos.  PLEASE... Read More Here

Did the Other Guy Just Blink?

The U.S. has been eyeball to eyeball with Iran for a few weeks now - but did the other guy just blink?  AP is reporting Iran is willing to discuss nuclear weapon allegations with International Atomic Energy officials - this is a breakthrough, but we should caution Iran is only willing to discuss "allegations" for the first time.  This is not an admission that Iran is building nuclear weapons, nor is it a promise to stop nuclear enrichment which the U.S. and Europe have set as the bar for future negotiations - Read More

Meanwhile, the U.S. Navy has substantially increase its presence in the Persian Gulf/Arabian Sea area with the addition of two more aircraft carriers.  It will give them a temporary deployment of three flat-tops - while one delays its trip home for at least a while - US Carriers Deployed  The Pentagon denies the deployment is in response to heightened tensions with Iran - but sorry, I don't believe in such coincidences.  The Pentagon does  nothing if not by design.  The Chiefs of Staff don't take a dump without a plan.