Letters to the Editor
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re: Had_Enough's post
You are spot on. Interesting to note, the first described occurence of the dreadful "stagflation" phenomenon took place during the run-up to the Vietnam War during LBJ's tenure.
The increased defense spending was largely buried or concealed from the public & budget hacks in the legistlature.
The result should not be surprising: the increased spending results in inflation. But the odd factor is why there is continued high unemployment? Why isn't the increased spending stimulating economic growth? Well, generally, $1000 toilet seats and $500 screwdrivers don't require more labor because of the cost; the higher costs just go to enrich a few select contractors and their buddies in the Pentagon getting the kickbacks to steer the contracts. So the increased spending doesn't benefit the economy; it's not more tanks and planes and hence more employees making them. It's simply a matter of more expensive tanks and planes.
I think the policies during the run-up to Vietnam are despicably similar to the invasion and occupation of Iraq. You don't have to look far to find out how costly the occupation really is, just a quick Google. I've read countless articles on how this is day-by-day the most expensive "war" America has ever been involved in, and the costs are far underestimated.
They learned their lesson from Vietnam: No Draft, and the public will not be motivated enough to complain. Hence the increased reliance on Blackwater, et. al. for manpower. Apparently the vast majority of Americans could care less about the wasteful cost of the war and the corruption. They won't know it until the economy totally collapses into a recession. By then the bandits are long gone, out-of-office, and some other poor sap takes their place. The Perfect Crime!
I took a lot of the facts on stagflation from Alan Greenspan's recent book. The link between 1967 and 2003, and the correlation between stagflation and increased "defense" spending is my hypothesis, however. It makes sense to me, but I haven't really delved into any numbers on it. Just a couple budding thoughts.
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Here's a Strategy
Eric Janszen writes in Harpers, that we are beginning an Alternate Energy Bubble, to peak about 2013. So, try to invest in Euro-denominated alternative energy stocks for the next five years.
The stagflation of the 1970's was awful, but interest rates were high. We had an investment alternative. Now interest rates are low, so no alternative in the USA.
Remember that the bad economic times lasted through the Nixon, Ford, Carter and H.W.Bush Administrations, twenty years. And then the good times, under Clinton only lasted about seven years. Do not expect a quick return to prosperity.
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Bernanke is beholden to his shareholders : Federal Reserve Members
As in any corporation the CEO must put his company first, by law. The Members of the Federal Reserve are shareholders. Bernanke is learning this the hard way. He has already opened a second discount window, this one private, to hide banks true solvency positions. He has lowered interest rates precipitously in the face of inflation. All this and the situation still deteriorates.
Bernanke now realizes he is running a confidence game. To turn the confidence levels around he must grope for every possible charade. To have any chance of success this government intervention has to have more hope than soap. The problem is noone trusts Bush or the government, the hope is gone... people have washed thier hands of Bush and the Congress.
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The price of gold has been on a steady climb since..
Wait for it....
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The beginning of 2001
What happened in late 2000 and early 2001?
A "business friendly" Republican took the White House.
Things that make you go "Hmmmm", eh?
http://goldprice.org/bob/uploaded_images/gold10yr-741805.jpg
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@mmckinl
Bernanke now realizes he is running a confidence game. To turn the confidence levels around he must grope for every possible charade. To have any chance of success this government intervention has to have more hope than soap. The problem is noone trusts Bush or the government, the hope is gone... people have washed thier hands of Bush and the Congress.
Bernanke just needs to learn a little bit of "Fedspeak" from the legend, master counterfeiter extrodinaire Alan Greenspan. Bernanke needs to become a master in the art of Boring Obfuscation.
Bernanke answers to his people, and they are the same people that EVERYONE in power answers to, the global banksters who really control the currencies and spin the "scary and confusing" web of debt that our country has become entangled in.
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Hey
Did anyone else notice that RON PAUL has been right all along?
If you haven't looked into this MOST HONEST POLITICIAN, now might be the time.
www.ronpaul2008.com