Drew Horn

Wall Street Breakfast: Must-Know News

The "experts" ( Krugman, Rogoff, etc.) admit that they don't have the "tools" needed to predict the future of this economy. One very important reason is globalization. All prior economic downturns were in economies wherin economic activity was primarily domestic. Globalization has made things worse and unpredictable. Countries that have less global economic activity will fare better.

If we provide liquidity to GMAC and people buy cars on credit, the resulting economic activity will benefit people in other countries more than us. If those loans default, only Americans will pay the bill. In effect, USA tax money used to pump retail sales (70% of the economy) will benefit global others more than us.

Geithner, et al, are using US money to stimulate a world economy. Unfortunately, we don't have enough money to effectively do so and printing more will cause such high inflation that it will make our current problems seem trivial. It is probable that we will have to create a new economic paradigm.

The real problem is that our "leaders" are unwilling to see or admit that we cant go back to 2007 and they are not prepared to lead us into the future.