"Untenable Positions for the Federal Government and the Federal Reserve. The effect of the structural income problems on the economy has been that most consumers have been unable to sustain adequate income growth beyond the rate of inflation, unable to maintain their standard of living. The only way that personal consumption — the dominant component of GDP — can grow in such a circumstance is for the consumer to take on new debt or to liquidate savings. Both those factors are short-lived and have reached unsustainable extremes. Debt expansion and savings liquidation both were encouraged by the investment bubbles created by Alan Greenspan; he knew that economic growth could not be had otherwise. Part of what is happening today is payback for those policies."
As an astute observer I am trying to understand complex macro-economic activities and what they mean for our future well being as a micro-economic American. Based on the above analysis is where I begin my question about what is true growth and wealth? Some premises to begin with:
- Fiat currencies have a terrible track record of survival - click here
- US Gov't spending is out of control with a predicted $1.5T deficit for 2010
- Federal Reserve is printing money to no end
- Low interest rates that were supposed to be a stimulus are falling flat.
- The debt spending by COngress and Obama are going to require much higher taxes.
- Federal Reserve- Would you trust your neighbor with a printing press? They will inflate us out of everything
- Fractional Reserve Banking system- This system along with the Federal Reserve's fiat currency and Wall Street have become enmeshed in a huge circular game of self serving dynamics.
- Now after the announcement of the SEC suits againts Goldman Sachs we might see this system for what it truly is- an irrelevant game.