Barack Obama, the first black President, has been in office just nine months. People like left wing comedian Janeane Garofalo have wasted no time in accusing anyone in opposition of the administration as being a racist. It is one thing for a regular citizen to make that claim, but it is quite another for a former president. Jimmy Carter doubled down on the race card when he said on NBC Nightly news,”I think an overwhelming portion of the intensely demonstrated animosity toward President Barack Obama is based on the fact that he is a black man…”
Michael Steele, the first African American RNC Chairman says, “President Carter is flat out wrong. This isn’t about race. It is about policy…Characterizing Americans’ disapproval of President Obama’s policies as being based on race is an outrage and a troubling sign about the lengths Democrats will go to disparage all who disagree with them. ”
There is no doubt that the Democrats are frustrated. They have to compromise on health care reform even though they have an overwhelming majority in Congress. Some Democrats felt they had to give up the “public option” because of a very intense opposition to government run health care. Carter and others cannot grasp there is a genuine opposition to what some say is a costly and bad idea. There is not a shred of evidence to back up the former President’s assertion of racism. I also find it odd that NBC let that comment go on the air unchecked. I thought the interviewer, Brian Williams, should have pressed Carter on what is an absurd and unprovable comment.
The health care debate is really all about money. The President says it will cost 990 billion dollars over the next ten years but will be deficit neutral. The Congressional Budget Office thinks health care will add 239 billion dollars to the deficit in the next 10 years. Michael Tanner of the Cato Institute says, “If the new health care entitlement were subject to the same 75-year actuarial standards as Social Security…” the bill will add an additional 9.2 trillion bucks to the deficit over the next decade. No matter where you stand on the cost, real money is going to be spent to get this done. I have always said health care reform is all about who pays and how much?
Even a big Democratic Senator like Jay Rockefeller ripped into the health care bill because he sees “a big, big tax” on his West Virginia coal mining constituents. Is that racist? No, that’s also absurd! Being opposed to health care reform is as racially motivated as what Kanye West said to Taylor Swift at the Video Music Awards.
What West said was stupid and insensitive but not racial. What Representative Joe Wilson said when he yelled out “You Lie” during a Joint Session of Congress was stupid and insensitive but not racial. Remember, to the Presidents credit, he accepted Wilson’s apology and moved on. Bravo Mr. President for being, well, Presidential. I’ll bet you Barack Obama wishes Carter kept his remarks to himself! To risk blow back and distraction on a phony race issue is foolish, especially considering the financial crisis and geopolitical problems the country is facing. I look at Barack Obama as the President of the United States, period.
I am not a gold bug, but I can spot a warning sign when I see one. Gold is near an all time high and this is no fluke! High prices are the result of big demand from monster players who are afraid of a dollar crash. My fears all center around Fed Chief Ben Bernanke’s announcement in mid-August of plans to end Quantitative Easing. QE is a program where the Fed used more than 300 billion in “printed money” to buy Treasuries to artificially hold interest rates down. The Fed wants this program phased out by the end of October. Oh really! Bernanke is going to stop buying debt and allow interest rates to spike! Not a chance. Interest rates could go up dramatically, and any homeowner with an adjustable rate mortgage would be hit with higher payments…much higher. I, and many other people, think The Fed will be forced to keep “printing money” and that creates an even bigger problem for the dollar. Martin Hutchinson at the Prudent Bear revealed his prediction in a recent article called “October Surprise,” …” Given the current predilections of the world’s central bankers, it is likely that when the T-bond bubble bursts, they will rush to the printing presses, the Fed buying Treasuries in a frantic attempt to stabilize the bond market. In all but the shortest term, that is unlikely to work; it will cause a spiraling increase in gold, oil and other commodities…” Hutchinson goes on to say,”If October 2009 fails to produce a full-scale T-bond rout, it will not be long delayed thereafter…”
He’s not the only one feeling something bad is coming. New York University Professor Nouriel Roubini, who predicted the financial crisis, said recently,“If markets were to believe, and I’m not saying it’s likely, that inflation is going to be the route that the U.S. is going to take to resolve this problem, then you could have a crash of the value of the dollar.”
Nassim Taleb, author of the runaway best seller “The Black Swan,” said in mid-August on CNBC ,”The risk is still there and we are probably worse off than we were before.” You definitely cannot call Taleb a market cheerleader and he is clearly not comfortable with this so-called “recovery.” You can check it out in the video below.
I think when Taleb says, “worse off” , he means the economy is worse now than when Secretary of the Treasury Hank Paulson told members of Congress last year that there was risk of “systemic failure.” Right after that Congress voted for TARP money to bail out the banks.
Even easy Al Greenspan is a little worried about the dollar. “Unless we roll in this whole degree of expansion, we will be in trouble,” the former Chairman of the Federal Reserve told a conference in Mumbai via videoconferencing. “I am not talking 3-5 per cent inflation, I am talking double-digit inflation in the US.”
Finally, there is John Williams at shadowstats.com. Just last week, he correctly predicted there would be a “negative surprise” with the unemployment number. He was right on target, it was worse than expected. Now he says,”With both the economic and systemic solvency crises, I believe the worst
still is ahead of us.”
How far ahead of us is my question? Famed gold investor Jim Sinclair thinks the dollar will take a big hit,”in the middle of the fourth quarter.” Sinclair also thinks the Fed will once again be forced to “print money” to buy Treasuries when the QE program ends. When that happens, the dollar will fall hard and all hell will break loose.
Just like the famous book “Something Wicked This Way Comes,” there will be horror. Who knows how it will all turn out, but there will be no happy ending and gold will sell at a much higher price.
As I watch the News out of Washington today, I see the heads of our nation’s biggest banks being grilled in Congress on the causes of the economic problems we are facing. None of those guys can say they are there because their bank is flush with cash and great investments. The banks and the economy are in the shape they are in because of greedy incompetent bankers who paid lobbyists to erase all regulation to allow them to make reckless highly leveraged investments into toxic assets. Now taxpayers are being asked to clean up the mess and pick up the tab. Many people are asking what is going to happen next?
One of my jobs as a journalist is to break things down so people can understand what is going on. I don’t always hit the mark, but I can sure appreciate people who can do that task well. What is going to happen next was brilliantly summed up recently by Martin Armstrong an investment pro. He says, “We are headed into the debt tsunami that is of historical proportions unheard-of in history.” Succinctness and clarity all rolled up into one sentence. That is the simple truth.
A lot of that tsunami is coming from distressed homeowners facing resets of mortgage payments. Last year while I was working for CNN, I asked a 76 year old woman whose mortgage was resetting to higher payments why in the world she agreed to an adjustable rate mortgage when she knew the resets would force her into foreclosure. She told me the mortgage lender promised when the higher payments came she could simply refinance. Multiply that logic by millions of Americans and you can see where the flood of bad debt is coming from. The simple truth is best summed up by Richard Benson,” We got here because far too many loans were priced based on the probability of being refinanced and not the ability of being repaid! As long as liquidity was flowing, bad loans could be rolled over into bigger bad loans, but now the music has stopped for refinancing these loans.”
To address the economic crisis we are facing, the new Treasury Secretary Tim Geithner is proposing the taxpayer to commit up to a trillion dollars for the Fed to guarantee more illiquid loans. He admitted to Brian Williams this week on CNBC he did not know how much money it would take to fix the financial problem. Geithner has been widely criticized for announcing a “plan” this week with few details on how it would work. I did not find the simple truth in anything Geithner said this week. I just saw deep black water.
At the same time the bankers were being grilled to well done on Capitol Hill, the House and Senate were putting the final touches on a “stimulus bill” that is now headed for the President’s desk. Susan Collins the Republican Senator from Maine was one of three who broke ranks with the GOP and negotiated a compromise with the Democrats. She announced the bill was only “789 billion dollars” which was billions less that the House or Senate versions. Then with a straight face, she said the bill was “fiscally responsible.” Fiscally responsible is how the biggest single spending bill in history is characterized. I hear water.