The Irony of Defense Economics

It has been mentioned by many that President Bush isn’t half as miscalculating as he projects. For the sake of argument, I would concur that his likely goal set forth by whatever powers that be, was to bring democracy to its knees. Whether he was as in tune as I’m giving him credit for the fact remains he succeeded. The flaw in this grand scheme is that it was contingent on the old American principle that went “a man will do anything to save his home”!

Having allowed his Wall Street cronies to go a bit out of control, the masses of Joe plumbers finally said enough is enough and bailed out of their homes! What followed next was a feverish pitch ratcheted up at a printing press at the Treasury that hasn’t let up since. You might even say, they’ve thrown away its brakes for the foreseeable future. Each new billion that’s now printed further dilutes this currency known as the bastion of the world’s sound funds; the US dollar. Whatever has been put into play here in our economic times the US and its once grand companies have fallen because the trust of the American people has been broken off to an irretrievable degree! We as a nation will go the route of an old Italy and live a life of mediocrity for many decades. People will invest their money here in the future as they do with emerging market nations; sparingly.

If you want to truly make sound investments for your future, you’ll likely be best served in looking to Brazil, Egypt, Russia, Japan, India, China, Australia and others. This is a new world era which can never be played in the same fashion as things once were for the past three generations. We have entered a major shift of the global economic plates. The ones that can change and adapt to this focus will succeed and the ones who opt to see things through the ways of the past will receive the same old garbage in a brand new truck and not too many pennies more. 

Disclosure: Author holds long positions in countries such as Japan, China and Brazil.

Comments

[patio:]

Bush has been an idiot, but it was primarily Dem policies that brought us to where we are. Plenty of blame across the board.

2008 Nov 20 08:29 AM

[pockyclips ...:]

No, the Bushes (Sr and Jr) know exactly what they're doing. Ref. "The Road to Serfdom". Political capital was used to hollow out the middle class. 9/11 allowed them to hurry up the timetable to bring us the new world order.

Without an American middle class, the rest of the world will have to develop their own.



On Nov 20 08:29 AM patio wrote:

> Bush has been an idiot, but it was primarily Dem policies that brought
> us to where we are. Plenty of blame across the board.

2008 Nov 20 08:40 AM

[BLIP:]

The law that reversed rules established under FDR was passed under Ronald Reagan. Capzles and Truthdig tell the story in a beautiful way in "Financial Meltdown 101."

2008 Nov 20 08:53 AM

[applesauce:]

All the biased political dogs are barking at each other again, democracy lives.

2008 Nov 20 09:57 AM

[anarchist:]

I guess it depends on how one defines democracy, I think it died with the oxymorinic Patriot Act, approval of torture, freedom of speech zones and der Homeland Security-yah, dats goot.


On Nov 20 09:57 AM applesauce wrote:

> All the biased political dogs are barking at each other again, democracy
> lives.

2008 Nov 20 10:46 AM

[Asbytec:]

President Bush is dyslexic, some folks confuse that with stupid. And the war in Iraq would prove them right. President Bush did nothing more or less than any other president during the housing bubble. They all turned the other cheek while Americans enjoyed he wealth affect.

Bush probably should have mulled over the economy when Greenspan retired. In retrospect, that was a clue something was afoot. He missed it, I missed it, we all missed it. It just happened to crash on his watch, not Obama's.

But, most importantly, congress missed it. They even missed it when Bernanke told them a year ago to shore up mortgages and the GSE's. I suspect they're still missing it.

Yes, the US dollar is being printed in mass, but that's offset somewhat, if not entirely, by the frozen credit markets and the winding down of derivative money. I assert this and demand on risk aversion is propping up the dollar, and will for some time to come.

I agree we are entering a new era, but Russia? No way. Russia is a paper tiger. It's currency is near worthless and it has no real industry outside of energy.

The era I envision is still US dominated, but with slower more sustainable global growth. US consumers will be less indebted and China will settle into single digit growth and be happy to have it.

I also see a stronger dollar resulting....don't everyone throw vegetables at once...that is if the twin deficits can be brought under control. besides, the Fed is likely to tighten on clear signs of a recovery in an attempt to regain control over the money supply. If not, congress better...they're constitutionally charged with it.

I suspect it will be a long time before risk appetite can chew on MSB's or the like, again. One would hope a fresh set of regulations will see to that. And money will be tighter in the decades following a recovery from this current mess.

Any takers?

2008 Nov 20 01:40 PM