Well, it’s always a clarifying thing to be out of the country, but while in Europe recently and getting U.S. news through a Euro-global filter, things have also taken what looks like a decisive turn. Almost all the elements of impending disaster are in place.
The Fed, seemingly following the path of the European Central Bank, announces QE3 just after the Euros commit to unlimited backing of European Union debtor nations. Easy money is here to stay on both sides of the Atlantic.
In London, they are taking measures to rival Singapore as a Renminbi (CNY) center. You don’t get this news in the U.S.–too busy running down stories of unimaginable triviality–but whenever I’m outside the U.S., I hear financial stories about the Chinese currency positioning to be a rival reserve currency, effectively repositioning the USD as a secondary global currency.
The seeds of our coming economic repositioning and financial diminution are quietly being put in place while loudly absent from the domestic dialogue. Of course, our reelected president has clearly placed a higher priority on domestic issues of class imbalance and health care reform that a diminishing valued dollar will not be able to fiscally sustain.
President Barack Obama can’t be blamed for not taking the straightforward moves to counter this–perish the thought. I’m sure it’s George W. Bush and the GOP’s fault somehow. (Of course, someone needs to explain to me how a housing bubble a couple decades in the making and initiated by the Clinton-Cuomo housing authority is all their fault.) Please note that during QE1, western funds flowed to China at a rate of $2 billion a day. With our new easing, the Chinese will not have to stimulate themselves–they’ll use our funds. We debase our currency, and they preserve theirs. Same story, different day.
It also looks like Obama’s perceived landslide victory last week–built on red meat radicalism and programmatic fear that stealthily redirected the focus for those who overwhelmingly supported him from the issues to successfully redefine Mitt Romney in prime time–has calcified. The Euros all wanted more of Obama, and their secret desires were granted in grand style: They are nauseated with American capitalism; they’re tired of the U.S. superpower and recognize a fellow social democrat who will further burden the U.S. with an unsustainable welfare state and leftist policies that will ensure low growth for decades to come.
Look at what’s in store: the fiscal cliff, a nicely packaged term that undermines the very fiber of the American spirit and historical pursuit of global excellence; a further risk of U.S. credit downgrade and the resulting decline of the life quality in the average U.S. household; and a radicalizing and further destabilized Mideast–the cries of the Israelis warning about Iran are being ignored. Yet we seem deftly bent on keeping the kind of leadership that will ensure an anemic non- or tepid response (from behind of course) to all these issues.
Don’t bother us. We can’t tend to the domestic and have no clue as to what to do about the global economy or our strategic challenges. We’re too busy burdening U.S. business with new taxes and regulations and adding to our transfer payments so an ever-expanding number of people are dependent on an underperforming central government. Ah, the land of the dependent and the home of the indebted–has a nice ring to it and certainly has the virtue of accuracy.
You want to see the future of the U.S.? Go quickly to Europe. Over there, they’re broke, but they’ve accepted it. I guess we’ll get used to mediocrity as well.
Ordinarily, I’d hold out some hope for compromise between our re-elected president and House Speaker John Boehner to avert or at least lessen the pain of the financial fiscal cliff. By the time they reach an agreeable deal and timetable, I think we’ll be out of options.
I had not thought it possible for Obama to be re-elected. By any objective and historical standard–or even by standards he laid out earlier in his term–he manifestly didn’t deserve it, but the majority of “We the People” have walked into the fire pit again and with great consequences. What we just did makes no sense and constitutes an economic death wish.
You Dems please enjoy this post-election victory party, as smiles will be in short supply soon enough.
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