Responding to many different posts at once.
I am somewhat unusual on these gold and doom and gloom message boards coming from a more mainstream Democrat, semi liberal perspective. First off, I agree with SOUTHPEN that our current predicament has absolutely nothing to do with any action that Obama has taken as president. The problems in the U.S. and world economy pre-date Obama by decades. Obama just followed W. Bush's lead in using government stimulus to try to turn around a financial crisis. Remember when Obama took office GDP was negative 6 percent per quarter, jobs were being lost at 600,000 plus per month. Fast forward to today and both GDP and job creation are positive. These are the result of Keynesian policies that Obama and the Democrats instigated. When Republicans say that Obama's stimulus policies haven't worked, they are totally lying because without that stimulus we would be in a 1930s style deflationary depression today with 20 percent plus unemployment.
That is not to say that Obama, or Bush before him, took the right economic policy. Even though I am more liberal, I kind of agree with the libertarian viewpoints of people like Ron Paul and Peter Schiff. They have argued for little government intervention. Let the market work it's magic. While they won't say it, perhaps an economic depression is just what the doctor ordered. It will be horribly painful. But it will be over in perhaps a decade. By contrast what we are going through now may last much longer and we may end up worse for it in the end if we get a Weimar style hyperinflation from it. Or in perhaps a best case scenario, an endless Japanese style malaise, with an endgame yet to be played out.
Turning to the subject of socialism, which was discussed on these boards. Being the liberal here, I have to defend democratic socialism as its practiced in the Scandinavian countries and in Canada, as examples. Those countries are all doing pretty darn well economically, thank you very much. And they are much more socialist that anything Obama would ever dream up. So don't tell me that socialism can't work. It can when practiced wisely.
Speaking of central government control and mercantilism which Downsideup discussed. Many, including myself, feel that China has the upper hand in being the economic hegemon of the 21st century. China has more central control over their economy than just about any western economy. Can such central control be called "socialism"? What its more often referred to these days is "authoritarian capitalism". China has been manipulating their currency and managing their trade with the west as a means of increasing their wealth. The U.S. and west overall have played into China's hands by letting our manufacturing capacity be transferred over to cheaper labor in China, which has produced massive trade deficits for the U.S. Combined with perennial oil importing, this has contributed to a massive transfer of wealth to China and oil producing nations. "Free trade" practiced by presidential administrations of both Democrat and Republican, have played this game, allowing China and oil producers to allow the U.S. to export our wealth and economic power overseas. I believe that everything China does is planned out. By contrast the U.S. lives for today. As long as we had cheap oil and cheap consumer products to buy and a spiraling amount of credit to fund it with, the game was fine for policians in the U.S. who have lived only for today. Now we are paying the price for decades of short sited policies.
I pin a lot of the problems we see today on deregulation, free trade, and irresponsible budgets, and most of these problems originated in the presidency of Ronald Reagan. I am a big fan of Bill Clinton, who was the most fiscally responsible president in decades and produced a budget surplus, but he made massive blunders signing Phil Gramm's repeal of Glass Steagall and deregulation of the derivatives market. I believe these actions were much more harmful than anything Bill Clinton did with Monica. On a broader scale, I do agree that entitlements are way out of control and need to be reined in, but still the current mess we find ourselves in is mostly what I refer to as the three Ds, debt, deregulation and derivatives. All of these policies began and the table were set for in the conservative, supply side, trickle down economics of Ronald Reagan, which Bill Clinton followed, with his "the era of big government is over".
But regardless of the politics, we are in a mess that no one I believe has a good solution to. We can go the route of the austerity believers (which I admittedly prefer). What we end up with is a deflationary depression. Or we can try to stimulate bit by bit and end up like Japan with no endgame. Or we can really stimulate like crazy and monetize the debt, which I predict Bernanke will end up doing, and end up with hyperinflation. Bad choices all. We are screwed any way you look at it. And that's why you have to own precious metals.
AI
