pimpjui

Barron's Plan to Save the Economy - For Just $200B?

It's like this. This whole mess is not about subprime blah blah blah. Its' about transferring wealth from the working people to Wall Street (Barron's readers included). There are numerous times that this has happened throughout US and world history. This time is no different. You'll know that the transfer is over once working people in the US are taking jobs not so that they can meet a mortgage payment on worthless homes, but rather afford their next few meals for their family (which I estimate to be about 15% unemployment for bread winners). The American worker is trapped, and has nowhere to go. It's going to get ugly. Giving money to banks in any shape or form is absurd. They will just milk the system until it becomes galringly obvious that they do not do anything of value anymore.

It's Not a Recession, It's Reality

You can be rest assured that, unfortunately, nothing will be done to genuinely help the people that need it most (e.g. working people), and most of the money will go to prop up the untalented parasites (i.e. Wall Street) that engineered the mess in the first place. If you need further proof, just look at where the money has gone to date. At $1 trillion +, most bad mortgages could have been simply bought up or guaranteed. Nope, call it what you want (e.g. credit crisis, toxic assets, etc), but this is just a brutish transfer of wealth to Wall Street from Main Street.

Understanding The Dollar's Decline

There is no bad publicity. I find it a bit strange that we are defining honest money as non- US Dollar. So let me get this straight, Euro, Pound, Yuan, Yen and Ruble are honest money. US Dollar, worthless fiat currency.

I guess if any currency were to knock USD of its perch, it'd be EUR. But does EUR really have the track record to become the world reserve currency? Considering Europe was at war with itself less that a generation ago, I can't imagine that we can extrapolate that it is now the supreme example of federal stability. I'd still take the CHF over the EUR any day. The Swiss have at least proved that their currency can withstand war all around them. Granted, though, the Swiss simply do not have the size to handle world reserve currency status.

Pound might be the next best bet. But it too does not have the size in order to handle this role. It's run up over the last couple of years has been basically against USD. Go to the UK. Outside of London, there is not much happening. Granted, the UK does have a huge amount of legitimacy in the area of soft power. Unfortunately, a reserve currency needs hard power behind it (e.g. USD has big guns/ships/nukes; CHF has (or had) lots of gold).

Yen? C'mon. The Japanese are xenophobic, the country is stagnating, and the US still occupies it with army and naval forces. The minute the US pulls out of Japan, they will re-militarize, which will cause huge instability as well as a drain on finances.

What's left? Yuan and Ruble. Oh yes, these two governments are beacons of transparency and honesty. Yep, that's where I'll keep my money. Russia has a male mortality rate lower than Africa. Russia exports weapons and commodities--that's it. China's government is desparately holding to power by giving it's poor citizens the hope of upward mobility. All of the problems they face (great domestic wealth disparity, pollution, corruption, poor healthcare, large standing army, etc.) suggest some type of civil or foreign war coming soon.

It's great that we have the freedom and inclination to bash the USD (and the US), because it still means we care. Otherwise we'd be sticking Yuan under the mattress. Indeed, the alternatives to the USD are not as great as would seem.