OldNavySailor

Wall Street Breakfast: Must-Know News

They just don't get it. Not the money lenders, not Congress, not the media.

The Federal Reserve cartel thinks that liquidity is the problem; that reducing borrowing rates of interest for banks and printing more money will induce banks to start lending again. Businesses will be able to finance their operations and consumer credit lines will open up so Mary and Joe can begin purchasing imported goods again. But it still comes down to the average citizen and the reality of their pocket books.

The American people may not be sophisticated when it comes to arcane financial discussion, but they do have a sense of impending strife at the personal level.

They look at their earned income, their monthly bills, their check book and for homeowners, their shrinking home equity lines of credit. They see the deteriorating value of their financial investments and they are reducing their exposure by selling their stocks, bonds, mutual funds, etc. to raise cash. They are not going to spend much beyond their capability to repay because they're beginning to understand how the debt economy works and their individual role in this ruse of a monetary shell game.

Layoffs and pay reductions are accelerating, which means people have less disposable income. Local, state and the federal government income and property tax revenues are shrinking as well.

This economic debacle will not end by printing more money. It will not end with taxpayer stimulus packages. It will not end with government forcing the lowering of mortgage interest. It will not end with selling more debt to other countries. It will not end by making more credit available to citizens.

It will only turnaround when government understands that a consumer economy works when people have sufficient earned and investment income to participate as capitalists. Washington must stop listening to the creators of debt and start listening to the builders of wealth.

Government must focus on reducing business taxes and burdensome regulation to induce a re-growth of manufacturing here in the U.S. It is imperative that energy be directed towards marketing America as the global center of commerce. Jobs will grow, banks will have an increase in demand deposits which means more money to loan; people will begin spending again and so on and so on.

Again, it’s all about putting people back to work to create wealth, not about the availability of debt.