Posted on 11/18/2009 5:04:11 AM PST by Former Military Chick
BEIJING (Reuters) - President Barack Obama gave his sternest warning yet about the need to contain rising U.S. deficits, saying on Wednesday that if government debt were to pile up too much, it could lead to a double-dip recession.
With the U.S. unemployment rate at 10.2 percent, Obama told Fox News his administration faces a delicate balance of trying to boost the economy and spur job creation while putting the economy on a path toward long-term deficit reduction.
(Excerpt) Read more at reuters.com ...
Actually, the motel owner is now OUT $100, because he just lost the $100 the hooker gave him. Everyone else is paid off, but he got SHAFTED!
“Timing is absolutely critical and it will be difficult.”
Or impossible.
Right now all that liquidity is being used by the banks for carry trading - which is lining the pockets on Wall Street but doing little for the average person. It is, however, weakening the dollar, otherwise known as “inflation”.
Check this interesting thread:
http://www.freerepublic.com/focus/f-news/2384742/posts
Officials at the Treasury also are keeping an appropriately cool head about the dollar, even though this coolness can be mistaken for insouciance. They note that the recent dollar decline has taken place in a very special context — that of a historic global credit crisis. This year’s 15 percent dollar drop began on March 9, the very day the stock market found its bottom. Tick for tick, the dollar’s decline has tracked the stock market’s monster rally. In this sense, the weakening dollar is a sign of economic recovery and strength.Bear in mind that prior to the weakening trend the dollar had soared 24 percent since mid-2008, which is right when the credit crisis began to unfold. That’s because investors and banks worldwide desperately needed dollar liquidity, and not because the U.S. was an especially safe haven during the financial storm. (Obviously, it wasn’t.) U.S. dollars — the standard currency of world trade — were needed to settle dollar-denominated investment and credit flows in markets that to a large extent had simply shut down.
BTW, as a matter of full disclosure, I am partially hedged against inflation through owning gold and a TIPS fund...in case Bernanke can't thread the needle...;-)
Wait...wait...hold on a sec here.
Did the President who has spent more in 9 months than every other President in history just say we need to control spending?
And did the article / reporter seriously say “his sternest warning yet”?
Did he do it with a straight face? I mean...the full and complete truth would be said something like:
“My administration has authorized more spending than the entire history of every administration prior combined. Now I need to tell you that we must control our spending”
How does this not get reported as “Delusional President - Obama has break from reality.”
“That’s because investors and banks worldwide desperately needed dollar liquidity, and not because the U.S. was an especially safe haven during the financial storm. (Obviously, it wasn’t.) U.S. dollars — the standard currency of world trade — were needed to settle dollar-denominated investment and credit flows in markets that to a large extent had simply shut down.”
So what’s your prediction of the dollar’s strength as governments around the world shift into other currencies from better managed economies, selling their dollars in the process? There are also several efforts underway to replace the dollar as the international standard of exchange. The “boy genius” Geithner, even said that he was “open to the idea”. That outburst of honesty was quickly stifled, but I think it showed their true intentions.
Doesn’t look at all good to me.
It’s one thing to talk about diversifying away from the dollar as the standard currency for international trade, it’s another thing to actually do it.
Also, the Fed taking back those dollars is one way to drain excess liquidity.
His mindset is that Obamacare will help reduce the deficit....
+++++++++++++++++++
Right. His is so much double speak, isn’t it? Read: Lies, obfuscations. Notice how he uttered such during his much touted interview on Fox News, which just last month or two his admin declared wasn’t a news gathering outfit at all.
Can we trust this man, or this admin.
A resounding NO!!!
His strategy going forward will be to cut 25% of the deficit he created, then saying “See, I cut the deficit!”.
++++++++++++++++++
Amazing problem for us is, a pretty good portion of the American population will believe that.
...and therefore we have no choice but to raise taxes.
Go for it Ubama, you p.o.s.
That’s the line BO tried selling to the men wearing green eye-shades at China’s central bank. They hold all the cards in this high-stakes game of global economic poker. They probably laughed themselves silly when this greenhorn left the room and marveled that the USA elected such a pathetic president.
++++++++++++++
Imagine that scene.
Obama’s the guy who spend all the money! And he wants to blow through a few trillion more!
+++++++++++++++++
Obama is the biggest con artist in the history of the world. He makes Madoff look trivial.
“It’s one thing to talk about diversifying away from the dollar as the standard currency for international trade, it’s another thing to actually do it.”
It’s being done incrementally, for instance the Iranian oil bourse.
“Also, the Fed taking back those dollars is one way to drain excess liquidity.”
How will the Fed take back dollars in foreign hands, exactly?
At any rate, I have a whole new appreciation for the old Chinese curse: “May you live in interesting times.”
Great story!
“...and therefore we have no choice but to raise taxes.”
If they do, total revenue will fall. Opposite effect of lowering taxes, which eventually results in increased revenue.
Plus, unemployment would go even higher...
Sorry, post #137 was a reply to you. I guess I clicked on the wrong “Post Reply” link.
The Fed “drains” liquidity by selling securities in return for dollars. We have a LOT of securities to sell. If the Fed does not push those dollars back into the monetary system, it reduces the money supply. It’s the opposite of Quantitative Easing or “monetizing the debt”.
Plus, unemployment would go even higher...
Yep. Tax increases would snuff out any hope of recovery.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.