Well they bailed out Greece and now they are going to bail out Ireland. This is proof that there is a pot of gold with every rainbow. Who bailed out Greece and Ireland? And with what from where? Now we have Spain, Portugal and Italy waiting in the wings. Grab a tin cup and queue up, it's free money!
These European government "train wrecks" are the result of borrowing and spending too much money in the past for things that they couldn’t afford in the first place. Many countries are broke and raising taxes is not an option. Ireland doesn’t need a bailout loan, they need to wipe the slate clean and start over. If they don’t do that, their citizens will leave the country in droves. Saving the financial world order will enslave us to our debts. Idealistic planning and dreaming got us into this mess. The good times are over. The world’s great social programs are underfunded or bankrupt. The people that benefited most from them could never be expected to contribute their fair share. When is enough too much?
In the United States, we are now spending money we never even dream of spending when times were good. The only way to pay the bills today, is to print dollars; it certainly won’t be raised in taxes. Four million homes in foreclosure and twelve percent unemployment, kind of suggests tax collections will be very lean in Obama-land this year and for many more years down the road.
Where all of these new found funds are coming from to bail out everyone? In Europe, it is the IMF to the rescue. Ever wonder who's in charge at the IMF?-- Ben and Tim!
In this country The Federal Reserve is buying Treasuries from Goldman Sachs; which is very logical when you think about it. The Fed needs to maintain interest rates of bonds already sold on the secondary market; therefore they have to buy every bond presented at par to maintain the interest rate. This insures that the rates at auction stay low without the perceived hand of government bidding at the auction. This could increase the money supply on a rather large scale (depending on how much is presented for redemption). The Treasury sells T-bills to China. China, later, dumps the bills on the open market and Goldman Sachs buys them for Bernanke at the Fed, keeping the interest rates low.
Are we really facing deflation or an end of “The good times?” The free-ride-gravy-train jobs are gone. In the 1930’s there was a measured drop in wages, people were desperate for work. The hourly wage didn’t keep dropping, there were limits as to what people would accept. The jobs that really took the hit were high paying ones, they disappeared (a lot of them were government jobs). Things returned to more reasonable levels.
Presently a lot of “million dollar homes” are slowly being revalued back to 240K. Is this deflation, or a return to reality? We could consider the release of air from the real estate bubble as a form of "deflation."
The Germans could be the key to this whole mess. Why should they have to foot the bill to keep the public restrooms in the rest of Europe clean? Their financial system has been through the wringer twice, once just before the Great Depression and again at the end of WWII. More debt is not a solution to solving the world’s financial crisis. The assumed financial responsibility to pay this borrowed money back is not there, "Just put it on our tab." The German’s are going to say “NEIN” to the PIIGS in Spain and that could spell the end of the Euro. This won’t set well with Das Über Führer Ben Bernanke.
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