Busted: Bankers and The Global Economy

February 20, 2008

Time to Pay Attention

Filed under: banking, credit, federal reserve, government, investment, money — Tags: , , , , , , , , , , — digitaleconomy @ 9:54 am

Isn’t it amazing? There are so many recession articles admonishing caution and cutbacks, expelling their legendary wisdom: more than six months after recession and after the recession is already well under way. If you were a patient, you would have died already. It is almost as if everyone was mysteriously asleep at the wheel until the United States screamed “uncle”. Now the writers come bearing their sage advice. After all, what else do they have to write about?

Hartford Business Journal

The Hartford Business Journal sagely posts a testimony about an internet business that got smart because its products weren’t moving and slashed prices to avoid holding the bag. Then you hear the mourning about how this “poor fellow” lost $5 million of the $25 million that he was supposed to make. He still made money. He didn’t go broke. It is never good enough. The poor guy is streamlining his business and delaying expansion. That is simply good “old-fashioned” business principles at work. Does anyone remember about the need to watch the signs? The fact of the matter is that this article is about 5 months too late. Please. Gannett should be ashamed.

By the way, for those smart businesspeople that noticed the pressure immediately like most smaller businesses do, you have already made the adjustments to keep yourself out of trouble. You didn’t wait on the news media or the conventional wisdom to tell you what to do. That is good business. That is why you are still in business. It’s called paying attention.

International Herald Tribune
Bloomberg Article

Then we have a recent article that expounds the rising prices as well as labor woes with a slight improvement, as if labor is a real measure of economic health. At least this is news, but is cyclically based on many factors, not worth covering here. Bloomberg does better, but discusses the evil of “inflation” and blinds you with percentages. Does anyone know what inflation really is?

How about some real news?

When President Bush issued his stimulus program, the House and Senate were required to approve it. Once they did, the Fed issued the “capital” for the need. The debt went up and dollar was devalued again, all behind the scenes without a mention. Devaluation is a process, not just an event. “Oh, but I heard the dollar just went up in value compared to other monetary systems.” The entire global economy is being affected by the bad blood of the subprime crisis. That is called devaluation of currency. Most of the world economy has been momentarily devalued along with the dollar. Other monetary systems have lost and are losing billions in imaginary money. Now back to the United States. The effects of the devaluation are already in motion, even as America waits for its “free tax gift” in the mail. The stimulus isn’t really a stimulus at all. It is a trade-off with the illusion of a stimulus. In effect, the credit has already been bankrolled as the economy continues to change and flex along the time line of economic life. The money has been spent, but remains in limbo while the Internal Revenue Service gets in gear to cut the checks per the magic formula that the government agreed on. The U.S. government has the credit on loan to rebate the taxpayers and the taxpayers are paying for it already. How ironic. That is real news.

What is the problem? We are short on truth. The mainstream media either rehashes the same old news from six months ago or completely overlooks the reality of what is going on. The surface facts are always easier to deal with. Real cause and effect aren’t dealt with. We continually lie to ourselves. If you haven’t been paying attention, it may be too late for some things. The good news is that you are never too late to get smart to what is really going on. Just be careful “to whom” you are listening.


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