There may be many parties responsible for our Economic Earthquake, but Obama will own the Financial Tsunami.
If you listen to Obama, the economic earthquake is over. All of this after Obama continually terrorized the American public with threats that if he wasn't allowed to immediately take extreme measures that the entire economy would collapse. Now, Obama is on his 'feel good' campaign to convince the American public that "He" has now put us onto the path of economic recovery.
But let's not start the economic recovery party just yet, there's someone at America's front door. It's the "Financial Tsunami." You know, the guy that sometimes shows up after being triggered by an economic earthquake. A financial tsunami that was triggered by staggeringly destructive economic decision making.
Hey, wait a minute! Obama only sounded the alarm bells about an economic earthquake. There was no mention about a Financial Tsunami. What gives?
Well, some might describe that as an "inconvenient truth." If Obama had mentioned that his actions taken after the economic earthquake might precipitate a financial Tsunami, he may not have been able to convince the American people to go along with the drastic measures that he and congress insisted had to be implemented in order for our economy to recover from the '100 year' economic earthquake.
But what about all the Economic Earthquake Experts that Obama has on his team? Shouldn't the experts have known this Tsunami would happen, and shouldn't they have warned us about its imminent arrival? Yes and yes.
The fact that these so-called economic earthquake experts failed to educate the American public about the possibility of a pending financial Tsunami can only be explained in two ways:
One - They're either stupid and aren't the experts they proclaim to be, or
Two - they intentionally misled the public in order to further their agenda
It may come as a surprise, but the following New York Times article actually indicates that the worst part of our economic situation may not be over with. It's also an indication that the "inconvenient truths" may be starting to surface in the Maimed Stream Media and that the consequences for the measures taken by Obama and Congress might have made things worse, especially for the long term.
Obama continues to spoon feed the American public his verbal opium. Obama and his staff are on a mission to ensure that the euphoria he created while campaigning for President continues. He knows it's the only way he can keep the American public at bay. He offered them his Messianic vision of hope and change, that had no substance, and brainwashed them into believing that they needed it.
The majority of Americans who voted for Obama still hang on his every word. However, regardless of his status of self-proclaimed Messiah, there will actually be a day of reckoning for even him.
Right now, Obama continues to stand on his Messianic stage. His supporters face him, jaws dropped, drooling uncontrollably. All the while, a financial Tsunami is racing up from behind them. Obama has chosen not to warn the unsuspecting masses.
Rees
Worries Rise on the Size of U.S. DebtThe nation’s debt clock is ticking faster than ever — and Wall Street is getting worried.
from The New York Time
By
Graham Bowley and
Jack HealyAs the Obama administration racks up an unprecedented spending bill for bank bailouts, Detroit rescues, health care overhauls and stimulus plans, the bond market is starting to push up the cost of trillions of dollars in borrowing for the government.Already, in the first six months of this fiscal year, the federal deficit is running at $956.8 billion, or nearly one seventh of gross domestic product —
levels not seen since World War II, according to Wrightson ICAP, a research firm.
The rising tab has prompted warnings from the
Treasury that the Congressionally mandated debt ceiling of $12.1 trillion will most likely be breached in the second half of this year.
Last week, the Treasury Borrowing Advisory Committee, a group of industry officials that advises the Treasury on its financing needs,
warned about the consequences of higher deficits at a time when tax revenues were “collapsing” by 14 percent in the first half of the fiscal year.
“Given the outlook for the economy, the cost of restoring a smoothly functioning financial system and the pending entitlement obligations to retiring baby boomers,” a report from the committee said,
“the fiscal outlook is one of rapidly increasing debt in the years ahead.”
While the real long-term interest rate will not rise immediately, the committee concluded, “such a fiscal path could force real rates notably higher at some point in the future.”
The trouble is that government borrowing risks crowding out private investment, driving up interest rates and potentially slowing a recovery still trying to take hold. That is why the
Federal Reserve announced an extraordinary policy this year to buy back existing long-term debt — $300 billion over six months — to drive down yields.
The strategy worked for a while, but now the impact of that decision appears to be wearing off as long-term interest rates tick up again.
Then there is the concern that the interest the government must pay on its debt obligations may become unsustainable or weigh on future generations.
The Congressional Budget Office expects interest payments to more than quadruple in the next decade as Washington borrows and spends, to $806 billion by 2019 from $172 billion next year.
“You’re just paying more and more interest and having to borrow more and more money to pay the interest,” said Charles S. Konigsberg, chief budget counsel for the Concord Coalition, which advocates lower deficits. “
It diverts a tremendous amount of resources, of taxpayer dollars.”One worry, however, is that there are fewer eager lenders to buy all that American debt. Most of the world is in recession, and other nations have rising borrowing needs as well. As other nations’ surpluses turn to deficits, America will face competition in global financial markets for its borrowing needs. For the moment, the United States is actually benefiting from a flight to quality into Treasuries brought on by the global
financial crisis, which helped reduce rates to record lows this winter. But the influx will not continue forever.
China has lent immense sums to the United States — about two-thirds of its central bank’s $1.95 trillion in foreign reserves is believed to be in United States securities —
but it has begun to voice concerns about America’s financial health.To calm nerves and fill the deficit hole, the government is getting creative. The Treasury is ramping up its auction calendar, holding more frequent sales of government debt and selling the debt in expanded amounts.
It is now holding sales of its 30-year bond each month, up from four times annually.It is also resuscitating previously discontinued bonds, such as the seven-year note and the three-year note, to try to mop up any available money all along the yield curve. There is even talk of issuing billions of dollars of a new 50-year bond, though the idea has not won official approval.
On a second front, the Treasury and the Federal Reserve are trying to bolster the mechanics of the market — to make sure every auction goes smoothly. With such enormous sums involved, every extra basis point on the interest rate the government pays could mean extra billions of dollars for the taxpayer. Earlier this year, when demand was hesitant at a Treasury auction and when a British bond auction went poorly,
investors grew nervous that the government might struggle to sell its mountain of debt.Click to read the rest of the article and the comments
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