Busted: Bankers and The Global Economy

April 1, 2011

U.S. Budget Madness Ensues

Filed under: economy, government, invest, money — Tags: , , , — digitaleconomy @ 7:37 am

fiddling as the nation burnsThe U.S. Treasury has released a final statement for the month of March that demonstrates that financial madness has gripped the federal government.

During the month, according to the Treasury, the federal government grossed $194 billion in tax revenue and paid out $65.898 billion in tax refunds netting $128.179 billion in tax revenue for March.

At the same, the Treasury paid out a total of $1.1187 trillion. When the $65.898 billion in tax refunds is deducted from that, the Treasury paid a net of $1.0528 trillion in federal expenses for March.

That $1.0528 trillion in spending for March equaled 8.2 times the $128.179 in net federal tax revenue for the month.

Advertisements

May 14, 2010

Big Business & Consequence of Economic Recovery

Because of the way that the United States economy is structured, every article of good news is almost always balanced by an equally troubling fact of economic life. Despite the prospects of a growing recovery in the eyes of many, we are now confronted with the latest trade deficit statistics.

As the economy improves, established business and some people are spending more money. The unhappy news is that the nation is spending more on imported goods than the rest of the world is spending on U.S. goods.

The latest statistics show that U.S. exports rose 3.2 percent during the month. Authorities equate this to a seasonally adjusted $147.9 billion. Imports increased by almost the same percentage, rising to $188.3 billion, resulting in a trade deficit of $40.4 billion for the month of March. This an increase of 2.5 percent compared to the prior month, the highest trade imbalance in dollars in 15 months.

Much of the trade imbalance is due to the cost of  addictive imported oil, which points to the need for more effective national energy policy. The recent gulf oil spill has put a bit of a monkey wrench into what government says are short-term plans.

The largest winners in this trade process are the Middle East, followed by China. While consumers ultimately decide what they will buy, the big decision makers in all this hocus-pocus is Big Business, either through Corporate America, Multinational Corporations and large retailers like Wal-Mart. Responsibility doesn’t stop there. Even small mall shops bear a burden in supporting cheap foreign goods. In fact, no business is free from supporting cheap foreign goods over American goods. That die was cast in the 1990s. Even now, corporations are constantly trying to lower their bottom line and increase profits exponentially. Most of the time, they don’t care how they do it.  As a result the nation spends more than ever on foreign goods to support the desire for cheap stuff. Unhappily, because of corporations, much of that cheap stuff isn’t really cheap. It is being marked up by Big Business, made more desirable through glitzy advertising. As a result, quality of goods is often being reduced as well.

Corporations are not being encouraged to use goods produced in the United States. In fact, there is little incentive to produce goods in the U.S. when insanely cheap manufacturing sources can be found overseas. Politics is often involved with the notion of “saving America.” Any economic sustainability for this nation must involve corporations and businesses that do business in America.

It has been posited by many that consumers must demonstrate more discipline. While consumers do vote with their dollars, they often have little choice in the matter, especially in this decade. It isn’t simply about tightening spending and buying American goods. Corporations that do business in America must comply as well for the nation to succeed in putting down a continued national trade imbalance. Any other approach is simply magical thinking.

November 3, 2008

Admission of Recession Before the Election?

consumer business crisis

consumer business crisis

Corporate results and outlooks have worsened. Automotive companies worldwide declared October figures were the weakest in 20 years. Economies have continued to weaken and as consumer credit and cash have dried up. Why wouldn’t they? Corporations, with the blessings of the U.S. Congress have sent a treasure trove of jobs overseas, milking the economy and American citizens for everything of real value for years while using the credit carrot to support spending. The federal government has added to the damage with heavy taxation and irresponsible governmental overspending. The mortgage crisis, compounded through a heavily compromised banking system has ensured an early downward trend in the national, if not global, economic cycle.

Before the election, no one wants to admit the evidence or the reality that the United States is in a recession. The European Union readily admits their recession. The U.S. government and its house of paid economists proudly hang onto false hope as if a recession is the end of the world.

Americans cannot deny the effects of the current economic crisis. Admitting a recession is likely to do little where the election is concerned, but there is always hope for the current administration. What most Americans do realize is that the economic crisis is a national security issue that was brought about by politicians in Congress and compounded by short-sightedness.

Trillions of dollars in bailouts have avoided a banking collapse. Congress is eagerly seeking to make things right by spending more taxpayer money than American taxpayers don’t have in the form of a fiscal stimulus package. Congress is remaining very independent before the election, scarcely mentioning the upcoming global summit in New York City. A public date for the summit hasn’t been set as the nation and much of the globe looks in the yawning chasm of a recession of unknown breadth and depth. The current administration is doubtful that anything real will come from the summit. ~ E. Manning

October 28, 2008

Upside-Down in Your Home? (Poll)

Years ago, because of the huge amount of money owed on car loans, coupled with low down-payments and “loan rollover”, becoming upside-down on your vehicle or owing more than it was worth at any given time was an increasingly common occurrence. With the contraction of the U.S. and the British economy, more and more homeowners are finding themselves in the same predicament.

In many cases, recent predatory lending meant less down payments and loan qualifications. However, the mortgage housing bubble has lead to downward spiraling values, resulting in owing more to a bank or lender than the house is worth. This has been highlighted in the media and now the United Kingdom is reeling from the same housing contraction.

Reports are that house prices have dropped faster in Britain than in the United States, producing an increase for a prolonged recession. Considering that most citizens have most of their asset value wrapped up in their homes, falling values, especially for recent home buyers is a real financial issue. The media has indicated that American homeowners are leaving their homes, not simply because of affordability issues, but because of refusing to pay for declining home values versus their home loans. Is this really true and could this reasoning pass beyond the United States? ~ E. Manning

August 1, 2008

Oasis Wealth & Fraud: Simply Unsustainable

Since World War II, the United States has been the center of global finance. It has used that position to virtually dictate the conditions under which many other nations get access to capital. Letting weak and mismanaged companies fail has been high on the list. As of late, this reality is no longer the case as bailout fever ensues to glorify national confidence.

Henry Paulson, the U.S. Treasury boss, has not reigned in criticism of other countries that have nationalized corporations in the past. Since March, he has been in the position of recommending the same ideal himself. How times change. Fascism has come home to roost in America.

The U.S. economy is a shambles for most, perhaps subsistence at best. However, this does not include the up-and-coming flank of investors and administrators that are tapped into commodities futures. Unhappily, this too is a desert vision of an oasis. Eventually, thirsty investors will be gobbling down sand in an effort to sate their thirst for money and profits. This has already happened with the mortgage crisis. As the environmentalists would say: “this is isn’t sustainable.” The multi-level marketing scheme will become oversaturated and lose its potency. Eventually, the poison of fraud takes hold of those that practice it.

The U.S. is now enjoying the reality of an economic hangover from unbridled credit, financing and speculation compounded by ignorance and mismanagement. Wages haven’t kept pace for what seems like an eternity for all but the wealthiest. This was conveniently ignored as long as the nation thought borrowing would sustain the national lust for the appearance of wealth. The desert vision wasn’t sustainable and now, like the Japanese, Americans are thirstily looking for the next oasis. Surely corporate wealth and the corporate oligarchy will sustain us. Most plans for unbridled wealth are unsustainable. Is yours? ~ E. Manning

July 31, 2008

Creation of Wheelbarrow Money

Wheelbarrow money isn’t just a figment of the past or in the annals of German history. It is real and today, just not in the United States. On the other hand, the little nation of Zimbabwe is reorganizing its money in an attempt to meet its outrageous 2,200,000% inflation rate. Obviously, the crazy percentage relates to older and better times.

Last week Zimbabwe released $100 billion notes in a meager attempt to fight the inflationary wheelbarrow syndrome. The day the new banknote hit the streets wasn’t enough to buy a loaf of bread. Today, the new bank note won’t cover that. Inflation has already eroded the value. Now a loaf of bread is $200 billion and if a Zimbabwe citizens longs for a can of Coke, that is a mere $600 billion. Zimbabwe is cutting ten zeros from its currency making $10 billion a revalued one dollar. In headier times, Zimbabwe was the toast of the third-world town.

The problem isn’t over. Inflation is so rampant, monetary units are expected to change again in the near future. Interestingly, just six months ago, this writer heard comparisons of Zimbabwe’s central banking policy to Ben Bernanke’s Federal Reserve of U.S. origin. Naturally, there are plenty of differences, notably that Zimbabwe is certainly not America. The overspending habits, however, are very much alike.

What the pundits say, there are similarities and the fact remains that no single economy is immune from inflation, especially when money policy and overspending is largely ignored. Could it be possible that a wheelbarrow of dollars could be required to buy a loaf of bread? It happened in Germany and if we keep ignoring common sense, nothing is impossible. Taking wealth for granted through fraudulent spending is a dangerous policy.

Debt, like the U.S. national debt, doesn’t go away, unless of course, the United Nations collects donations from larger economies to make that happen. Strangely, while this plan is part of U.N. policy creativity and wishful thinking, the reality is another thing altogether. Whether wealth redistribution plans of the U.N. actually work in 2015 or in 2030, U.N. plans aren’t really about building local economies, but about global empowerment. It isn’t happening for Zimbabwe and the outlook isn’t good for the U.S. either where runaway spending is concerned. Bailing out the world and supporting global governance is part of the reason why the United States national debt is where it is today.

Remember that the current nation of Zimbabwe isn’t promised tomorrow. The United States shouldn’t take the future for granted either. ~ E. Manning

July 16, 2008

Recovery Slow in U.S., Inflation Out of Control

For some time, the Fed has remained hopeful of a quick recovery, despite lingering signs of trouble. The Fed is lining up with the current reality. Ben Bernanke is fighting hard to keep the economy growing with fighting inflation as his top priority per his testimony before the Senate Banking Committee. He still refuses to admit that the U.S. economy is in a recession. His goal is to strengthen the economy over the strength of the dollar. He is uncertain about the value of a second economic stimulus move.

Because of the turmoil in the economy and banking industry, Bernanke has flagged his optimism somewhat, announcing that growth will eventually pick up over the next two years.

Years ago, no one would have expected oil futures to be running the economy, yet (more…)

Older Posts »

Create a free website or blog at WordPress.com.