I don't think anyone could do anything to avert the disaster that is coming to this country. There are consequences to actions in politics and finance just as there are in physics. If you throw an object into the air, nothing is going to stop it from coming back down thanks to gravity.
In the same way when you abandon sound finance and allow investment banks to sell derivative products that are unregulated, have no standard clearing function and no market, you are allowing the institutions that provide capital to the marketplace to create money out of nothing. Since the process is so profitable (at first) the banks can't resist selling these exotic instruments or even from buying them. Now that the marketplace has seen these things for what they are, they have revalued these derivatives to the point where the companies involved with them are bankrupt.
Even worse, the banks no longer are able to function properly to support what viable businesses there are. And they are all lining up for support from the government, which incidentally means our wallets!
So now, failing businesses are able to borrow directly from the fed, exchanging worthless garbage contracts for money, at such a volume that everyone knows the government doesn't have. Since the government can simply print money, the illusions continues, for a time, but because the govt's fiscal obligations so dwarf their ability to tax the public, the dollar is depreciating in value at an accelerating rate.
No one and nothing is going to get this country out of this decline without some major restructuring and even if someone competent could get the job, they couldn't fix enough within 4 years or even 8 to restore the US to fiscal soundness.
Someone asked about employment levels and Dabods provided some figures. What he didn't tell you is that the methodology used to generate those numbers has changed, so comparing an employment rate from when Johnson was President to now when George Bush is President is effectively impossible. Actual employment the way that Johnson or Nixon did it applied to today would probably give us an unemployment rate in double-digits. About 25% of the country was out of work during the height of the great depression, we're not there yet, but I expect that we will come close to matching that in the next few years.
I watch a lot of figures to decide how and when to trade. One of the ones I used to depend on was M3 numbers from the fed- an estimate of all the money in circulation from the US. Well, they stopped publishing those figures anymore, saying that it was too expensive to come up with! The Fed is a private institution given the responsibility to provide the country with money, and it's too hard for them to tell us how much of it they've printed! IMO, they stopped providing the numbers because if they did oil and gold and other commodities would be much higher in cost than they are. This isn't fooling anyone, who understands how money works.
The actions already taken justify a price of Gold in excess of $1600 an ounce, probably a good deal higher, but without verifiable M3 figures and an exact auditing of the US gold reserves that is impossible. Gold is at $829 an ounce now, down from the peak of $1033 in March this year. $845 is now resistance and once that gets taken out, it will be time to invest in mining stocks again.
In the meantime, I'm making more money selling bank stocks short at the right times. The indu's still are going to fall below 10,000, probably even below 9,500 before this bear market is over. Nothing anyone who gets elected this fall can do to stop that!
