President Barack Obama Message Board

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Politics : President Barack Obama

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To: John Vosilla who wrote (136582)	9/1/2013 5:15:09 PM
From: RetiredNow	Read Replies (1) of 149317

I am actually betting that your scenario will play out. I think it is a decent probability scenario. When it became clear to me that Bernanke was planning to taper and to end QE by mid-2014 and then embark on increasing interest rates in the couple of years after, I decided to start selling off a lot of my bonds and get back to a more normalize portfolio allocation. But let's make no mistake. We have been through another depression. The only difference between this one and the one in the 30's was that the bread lines disappeared because people get their food stamps in the mail. The poor and middle class have suffered equally as much. If we used the same calculation methodology as used in the 30's to calculate unemployment over the last few years, it would show that unemployment was just as bad. So this really was the Great Depression 2. We just learned a few tricks to make it seem not as bad, like fudging the numbers and giving out massive welfare to offset it all. But I don't credit Bernanke for the recovery. Bernanke's actions have actually made the recovery tepid and made the pain last much longer. Bernanke's policies have done ZERO to help the middle class and power. His policies have helped the bankers and the 1%. Who really should get credit for helping, at least a little bit, is the Democratic policies of direct assistance to the middle class and poor unemployed. That safety net is the only thing that has helped. Think about a different scenario. Had we allowed the banks to fail, but done it in a structured way and solved the underlying root causes like Glass Steagall, then we could have had a much more rapid recovery without a massive inflation of new debt and massive money printing. That faster recovery would have resulted in a reduction in overall leverage at the household and banker level and the economy would have been able to speed up much faster, which would have created a much more robust lending environment and jobs recovery. We chose the path of lingering malaise and slow growth recovery. It's a shame, because it didn't have to be this way. We got a Bernanke when we needed a Volcker. And now we're faced with a choice between Summers and Yellen. That's a choice between Darth Vader and another Bernanke. Anyway, the good news is that China is recovering and so is Europe. Emerging Markets are starting to look cheap too. So I'm averaging in to Developed and Emerging International Market stocks in anticipation of a sustainable recovery beginning second half of 2014. Time to buy this month and next, while there's uncertainty and blood in the streets.

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