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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: philv who wrote (22312)	1/21/2005 1:19:05 PM
From: sea_urchin	Read Replies (1) \| Respond to of 80950

Phil > all is well according to Kudlow because the deficit is shrinking fast Yes, well, no, fine! What else can anyone say to someone who lives in a make-believe world? Here's an opinion about that make-believe world: news.goldseek.com >>Welcome to the land of milk and honey, America 2005, a wondrous place where problems are no such thing and nothing really matters. We’re on course for unending growth and military triumphs whenever and wherever we desire them. In our world, houses only increase in value over time, despite the fact that everything within them degrades over time. Interest rates may rise and fall but are destined to remain with a range that makes everything affordable for everyone, always. We’ve reached ultimate economic equilibrium and economic pain & suffering will be relegated to a tiny footnote referencing the charming but improperly managed pre-21st century world. The dollar has been in decline for years. But we’re told it doesn’t matter. A weaker dollar, according to any Econ 101 textbook “makes domestic goods more competitive in overseas markets.” Interesting then, that our trade deficit stands at yet another record high, the gap wider than ever. Apparently foreigners aren’t as much in the market for Britney Spears action figures and “Oprah” magazine as we’d like to think. The trade deficit stands at a record, well beyond the level that would quickly have triggered a panicky flight of assets from just about any other country. The November deficit hit an astounding $60 billion dollars, the biggest deficit ever, in all of history, in any nation. Ever. Period. But we’re told it doesn’t matter. Treasury Secretary John Snow informs that the huge gaping chasm between imports and exports simply demonstrates that foreigners just plain love us and can’t wait to invest more money in the U.S. Oh, that and the fact that "The economy is growing at such a fast rate that it is generating lots of disposable income... some of which is used to buy goods from our trading partners." That must be all the disposable income left after the average American family banks its average $80 of savings for the year. I find it fascinating that with all the disposable income this steamy fireball of a recovery is generating, household debt stood at 115.3% of disposable personal income in the third quarter of 2004. That’s an all-time high for that figure. Funny that Americans, with a hyper-abundance of disposable income are borrowing to make ends meet. Never mind, folks. Snow says it’s ok. It doesn’t matter. In the land of milk and honey, debt is wealth, war means peace and a dollar sailing towards hell in the proverbial hand basket is a good thing. Who says George Orwell’s dead? The budget deficit is at a record high too. And destined to swell still further as our “swift and decisive victory” in Iraq will soon enter another year of multi-billion dollar expenditures. Private foreign investment in U.S. assets is now virtually non-existent relative to the huge inflows of foreign capital we used to see. No one in his right mind invests money in a bankrupt government. (Foreign governments have been forced to pick up the slack in an effort to keep their currencies from surging higher relative to the dollar. See? It doesn’t matter! Someone will always step in to fix the problem!) But, like good ‘ol Vice Prez Cheney says, “deficits don’t matter.” They don’t matter because as good ‘ol Keynes told us, deficit spending boosts the economy. Apparently it’s true because in the wake of all that deficit spending let’s remember that the economy is “growing at such a fast rate that it is generating lots of disposable income.” It JUST DOESN’T MATTER in the land of milk and honey where Uncle Al and the merry band of market manipulators can smooth everything over with a soothing word and a lullaby. It doesn’t matter that Fannie Mae is flubbing the numbers because someone will find a way to fix the problem. That is, if there really is one. But there probably isn’t. Because if there was really a problem the market would react. But it hasn’t. So there’s obviously no problem. Got it? When nothing matters, when the markets appear unconcerned about any of the frightening imbalances, the contrarian in me has to presume that at some point, EVERYTHING will matter. Perhaps all at once. Of course, that view won’t sit well with the general populace and politicians whose infantile attention spans and utter incomprehension of anything that happened before Oprah first got her show on the air, ensure a steadfast faith in the notion that whatever trend has been present for the past few weeks will continue indefinitely into the future. Stocks are up again and will thus climb forever. The weaker dollar hasn’t hurt us and it never will. Housing will continue to climb forever (just like stocks did in the 90s, plus or minus a few millennia). The twin deficits can continue to expand indefinitely because after all, they haven’t hurt us yet.<< And the more we spend and the more we borrow, the richer and the happier we'll be. Doo - be - doo - be - doo.