By Greg Hunter’s USAWatchdog.com
My wife and I were out to lunch with a friend of ours and she asked me,”When is the economy going to get better?” If you saw Fed Chairman Ben Bernanke’s testimony in the Senate yesterday, the answer is 2010. Of course that answer came with big caveats such as the 787 billion dollar stimulus package works to revive the economy. Many say it will not work but I hope it does. My answer to,”When is the economy going to get better?” is “It’s not going to get better; it is going to get different.” Meaning, the economy will not return to what we have grown to consider “normal.” There is going to be a new “normal.” This is not a recession, a dip or a temporary very bad economic condition. We are witnessing a “hard right turn” in a new direction on a global scale. Many of the jobs lost in this downturn will be gone forever. A couple of changing industries I can think of are financial services and the automotive sector. The good news is that people are going to be forced to live within their means. Almost everybody rich and poor will consume less and save more. There is going to be a new age of frugality and that, as Martha Stewart says, “Is a good thing.” Thrift is the new black and this mindset is going to be in vogue for a generation or more!
Most people I come in contact with do not understand what is unfolding right in front of them. You can’t really fault them because, after all, look at the recent conflicting message President Obama sent out. He just signed the biggest spending bill in history and is now calling for the return of a Pay as you go Policy. This bill was passed without budget cuts or increased taxes. On top of that, the Treasury has a trillion dollar plan to “fix” the banking sector. Where are we getting the money for all of this spending? We are borrowing and printing it at the moment. In Senate testimony yesterday, Chairman Bernanke was asked a simple question, “How much money will it take to fix the banks?” Bernanke said that the Senator would have to ask, “The Treasury or the FDIC.” This was the answer from the man who is in charge of monetary policy for the United States. In my opinion, he either does not know or is afraid to give a number. My guess is the amount of money it will take to “fix” the banks will be many trillions of dollars and that is a down right scary repair.
I am not the only one who is concerned. George Soros, renowned billionaire investor, recently said, “We witnessed the collapse of the financial system…It was placed on life support, and it’s still on life support. There’s no sign that we are anywhere near a bottom.” I do not profess to be able to forecast the future but I do know that given the circumstances surrounding the biggest economic mess in history, one thing is for sure. Forget about the economy you saw in the past, we are not going back there. Everything in the future is going to change and that includes the value of our money.