Demolition Man

Posted: February 25, 2011 in Commentary, Economics
Tags: , , , , ,

Fourth quarter revised GDP is in from the Bureau of Economic Assassination.  And the verdict is that the economy was growing slower than originally estimated at 2.8 percent, down from the 3.2 percent pimped to the press in January.  What a shocker!  Down the memory hole with that advance announcement.  If you account for the way that Washington understates price inflation in the GDP deflator you find out that the economy is actually contracting as it has been since the housing bubble popped.  All of the actions that have been taken by Fed chairman Ben Bernanke have completely and utterly failed to do anything except generate inflation worldwide in commodities, energy, and food.  Let’s hear if for America’s new Demolition Man.    

Remember Sly as Sergeant John Spartan, put away for 36 years in “CryoPrison” in 1996, then reawakened to catch Simon Phoenix (Wesley Snipes) his archenemy incarcerated at the same time.  As the movie progresses all manner of destruction follows Spartan around wherever he goes, whatever he does, whoever he sees.  Just like Spartan, whatever Ben touches seems to come crashing down all around him.  It’s just not as fast, funny, or action-packed.  And it’s continually obscured from view by sycophantic media who parrot whatever pronunciamentos come out of DC, like this happy-happy diatribe about how good things are going.  Be well!

Right now we see all manner of destruction happening in the real world.  Impoverished people in the Middle East are rebelling against autocratic regimes unable to keep food prices in check as the Fed exports inflation by buying treasury notes.  Wheat and corn prices have nearly doubled in the last year.  Rice and soybeans are up nearly 50 percent.  Overall food price inflation is at 28 percent just the last six months.

Low income people around the world are starving because the Fed is printing money so fast to allow our government to continue to spend without restraint.  Pretty soon they’ll be signing up with Edgar Friendly and chatting over a lunchtime rat-burger before going out to steal food from the elites.

The signs of another bubble forming are already there as money in the banking system goes into speculative investments in stock markets around the world – malinvestments that wouldn’t happen without the reserve infusions from the bailouts and preferred lending programs for favored corporate borrowers.  Producer prices are already accelerating significantly, but have only slightly showed up in consumer prices.  The interesting feature about the PPI numbers are that the crude and intermediate goods are rising faster than finished goods indicating a higher CPI ahead.

What can be seen quite clearly is that trillions of dollars of deficit stimulus spending, trillions of dollars of financial industry bailouts, trillions of dollars of quantitative easing, and a complete failure by government officials to allow the global economic marketplace to return to a stable equilibrium has done nothing to achieve renewed economic growth and is in fact devaluing everyone’s monetary assets reducing our overall wealth.  This is criminal incompetence at its height that would be prosecuted as fraud and theft if it were engaged in by private individuals.

Perhaps Ben is more like Simon Phoenix than Spartan.  He does whatever he wants to benefit himself and his friends in the financial industry and damn the consequences for everyone else.  “I want you to rob, loot, pillage,  I want you to steal!  I want you to do all the wonderful things that we used to do before all of this happened!   This world will be ours!  Let’s bring back the good old days!  Are you with me?

I can hear him at the end of his term as Fed chairman, “Damn, I’m possessed!  Wonder if I can play the accordion too…

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