During President Obama’s 2011 State of the Union address, he made sure to reflect on the shaky stance of the world economy. What he failed to do was articulate any tangible, specific changes to economic or foreign policy that could be implemented to help stave off the impending economic disaster, which has been, for the most part, ignored. His economic comments were best summarized when he said, “Yes, the world has changed. The competition for jobs is real. But this shouldn't discourage us. It should challenge us… we need to out-innovate, out-educate, and out-build the rest of the world."
It was the typical State-of-the-Union political theater. Amidst all of its vague rhetoric, expectedly optimistic outlook, and exaggerations about how the stock market and economy have come “roaring back,” Obama did touch on something about the economy that was much more specific and real. Upon recognizing the economic challenges posed by India and China, he said that the economic “rules have changed.” And my, how they have.
Without a doubt China and India are two countries that could catapult into the leading position in the evolving global market; the sheer size of their populations is the source of their great potential for economic growth. As Obama said in his speech, countries like China are not only leading corporations to bring their businesses out of the U.S., but these countries aren’t any technological slouches either. “Just recently China became the home to the world’s largest, private, solar research facility and the world’s fastest computer.”
|In his speech we are told that the time has come when hard work is no longer enough to succeed. “Many of the people watching tonight can probably remember when… If you worked hard, chances are you’d have a job for life… that world has changed.” All the while we’re expected to have our confidence that those in Washington are working hard to fix this economic debacle; that the couple extra dollars in our paychecks, which he extolled resulted from the tax cuts in December, is a sign that they’re doing everything they can to bring us out of this mess. It’s the old ‘let them eat cake’ routine. It’s expected that throwing out some insignificant spending cuts over the next eight years will be enough to quell our concerns and to leave them alone.
For the reason of brevity and clarity, here is a list of some facts pertinent to clarifying the present economic predicament, which Obama failed to communicate effectively:
- Jonathan Tirone of Bloomberg reports that on Sept. 7, 2009, the Geneva-based U.N. Conference on Trade and Development said U.N. countries should agree on a global reserve bank to issue the currency and monitor exchange rates of its members.
- In October of 2009, the Independent’s Robert Fisk reported in an article titled “The Demise of the Dollar,” that Gulf Arabs have begun planning – with China, Russia, Japan and France – to move from dollar dealings for oil to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new currency planned for nations in the Gulf Co-operation Council, which includes Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
- On Aug. 20, 2010, Boston University Economics Professor Dr. Laurence Kotlikoff told Bloomberg that the United States is worse off than Greece, that the U.S. is bankrupt and we don’t even know it, and that the government is “effectively lying to us.” “What’s going on here is you have a systematic failure of disclosure of what’s really happening on the fiscal side…” – not the market side. “Based on the Congressional Budget Office’s data, I calculate a fiscal gap of $202 trillion, which is more than 15 times the official debt,” Kotlikoff wrote.
- On Dec. 22, 2010, Stop NATO’s Rick Rozoff reported that “both houses of the U.S. Congress unanimously passed a bill authorizing $725 billion for next year’s Defense Department budget: the largest military budget since World War II.
- On Dec. 26, 2010, during Platts Energy Week, Bill Lovelless interviewed former President of Shell Oil Don Hoffmeister who predicted that by 2012 the U.S. will see 5$ per gallon gas prices.
- On Jan. 6, Treasury Secretary Timothy Geithner wrote a letter to congress in which he said that the U.S. is insolvent and that “Failure to raise the limit would precipitate a default by the United States.”
- On Jan. 17, The Wall Street Journal’s Andrew Brown reported “Chinese President Hu Jintao … called the present U.S. dollar-dominated currency system a ‘product of the past’ and highlighted moves to turn the yuan into a global currency.”
- On Jan. 19, Paul Joseph Watson and Alex Jones report that “… the Chinese central bank being the largest debt holder at approaching $1 trillion. The average American family with two children collectively owes around $12,000 dollars to China. The Communist state’s ownership of long term U.S. Treasury Securities means the United States pays upwards of $100 million dollars a day to China in terms of interest alone.”
- On Jan. 19, PrisonPlanet.com’s Paul Joseph Watson reports on “10 Ways In Which China Humiliates The United States.”
- On Jan. 26, New York University Professor of Economics Nouriel Roubini told CNBC that “The White House plan to partially freeze government spending is just ‘spare change.’”
- On Jan. 26, an article published by AFP reported, “Power in the global economy is shifting from the advanced world to Asia as recovery takes hold, Davos analysts said Wednesday, as political and business elites began their annual meeting.”
- On Jan. 27, according to a summary of the “Budget and Economic Outlook: Fiscal Years 2011 Through 2021” that the Congressional Budget Office released the day after the President’s State of the Union address, “For 2011, the Congressional Budget Office (CBO) projects that if current laws remain unchanged, the federal budget will show a deficit of close to $1.5 trillion, or 9.8 percent of GDP.”
- In another article, Washington’s Blog reported on Jan. 29, that – based on an outdated calculation, when inequality was much lower, of the Gini Coefficient used to calculate inequality – “Inequality in America is worse than in Egypt, Tunisia, or Egypt,” where people are protesting inequality.
- On Feb. 3, the Telegraph’s Harry Wallop reported that “The United Nations Food and Agriculture Organization (UN FAO) gave warning that the high prices, already above levels in 2008 which sparked riots, were likely to rise further.”
While the rules may have changed for the majority of Americans, the rules may have not for the Oval Office and Congress, which has, for at least eleven years, touted deficit and spending control while proposing contradictory budgets to Congress – as the budget he proposed for innovation will do. He did, however, effectively describe how times have changed for most hard-working Americans, for whom hard work is now not enough to succeed, while successfully pointing to the direct reason as to why they have changed for the worse: the shift in power to the emerging markets in countries like India and China. Essentially Obama’s words of wisdom to a country shaken to its core, is that we should keep our spirits high and our heads down, with our noses even closer to the grindstone; that we should trust the government that continues with the same policies that got us into the mess we’re in today.
What Obama only alluded to and partially touched on was the indirect cause of our financial woes; why there has been a shift in power to the emerging markets. Fundamentally, it is because of the steady devaluation of the dollar that has been facilitated by the Federal Reserve. What I am referring to is the continued inflationary monetary policy – printing money without backing it by anything. This policy has accelerated since Federal Reserve Chairmen Ben Bernanke’s November announcement of quantitative easing – a euphemism for another bailout, as the Fed prints money and gives it to the banks. With policies such as these, Americans will soon have hundreds of dollars of value sucked out of their paychecks. Essentially, American’s paychecks aren’t rising proportionally with the price of commodities.
As Congressman Ron Paul said in a committee hearing on Jan. 26, – with regards to the out of control policy of deficit spending, not liquidating debt, printing more money, and the resulting inflation – “I think the Federal Reserve allows congress to be irresponsible, and if they didn’t facilitate the debt… if they weren’t there to buy up this debt, believe me we would be much more responsible about how we managed our affair.” And if ever you hear someone say that it was the greed on Wall Street and the capitalist economic model that got us into this problem, you refer them to this quintessentially true statement by Congressman Paul, which clearly articulates how it is the lack of a free market that is to blame.
I’ll leave you with some words of advice. Apart from calling an end to deficit spending, calling for massive budget cuts, calling for an end to the current inflationary monetary policy that is the root of the problem, and the central banking system that set this crisis into motion back in 2008, invest in some gold or silver coins that you can keep somewhere hidden and on hand. Invest in some storable foods like wheat, canned goods and the like.
Some are trying to blame other countries for why anti-American tunes are being played at Whitehouse banquets during foreign dignitaries’ visits, as happened during Chinese President Hu Jintao’s visit while China was engaging in talks with North Korea about whether or not China should station troops in North Korea. Sure the manipulation done by other countries on their own currencies and basic economic tenets do have some role to play, but that role is much smaller in comparison to the aforementioned issues. The only people we can blame for our very real and very severe economic inadequacies, which some are still denying or ignoring, is ourselves.
If you are unfamiliar with any of the issues facing our country that I have mentioned then you are likely questioning whether or not this advice is warranted. In fact, you are likely looking for ways to convince yourself that it isn’t, not only because of the frightening nature of the prospect, but also because it is the natural human response to attribute what I have said in this article to the fact that I, and others with views like mine, am paranoid and have ‘drank the kool-aid.’ It is easier for these people to reconcile what was written in this article with their preconceived notions by thinking that, and essentially not thinking, than it is for these people to really consider what I have written and research it further, which I encourage. Not only that, typically when someone gives advice, the advisee interprets the adviser as arrogant and the advisee winds up discounting the advice as the product of the adviser’s need to feel pompous. To people such as this, I want you to know that not only do I want to help you; this warning is also a self-defense mechanism. If you’re pessimistic and doubt that anyone possesses any altruistic qualities at all, that no one would want to help someone without getting something in return, know that helping you be safe helps me be safe.
Your life and the lives of your family are more valuable than your cars, your homes, your computers, and even that new smart phone you may have gotten for Christmas, as all of that stuff is useless if your life isn’t around to use them. No I am not saying that you will die in the near future, I am merely clarifying the value of your life in comparison to other things. So, just as you would take out an insurance policy on any of these kinds of things, why not take out an economic insurance policy on your own life and the lives of your family. If worse doesn’t come to worse, you won’t have to buy groceries for a while and you will have some spare change for those unexpected financial needs. In a crisis, the last thing you want is to be in someone’s pocket.
Donald Trump – a man well versed in the intricacies of bankruptcy – came out and said that the U.S. is poised for an economic collapse with the rising oil prices and devaluing dollar, and that food riots in the U.S. are not that far off with the skyrocketing food prices in an interview on Feb. 3 with Kathleen Walter on Newsmax.tv. Donald Trump! Enough said. If you are still denying the severity of the situation, than ‘you’re fired!’