Wednesday, January 23, 2008

Economy

Paulson states that the economic fundamentals going forward are solid. Paulson has an agenda, and I can’t figure it out. But the fundamentals are not at all solid; in fact, they are unprecedented in modern history:

1. Two-thirds of government money is spent on social programs and we now live in a one-man, one-vote democracy. Our system of government will surely bankrupt itself within a generation.
2. Workplace rules and regulations have pushed our manufacturing base overseas. High tax individuals are already starting to follow factories.
3. Money will continue to be printed to keep the banks afloat. This will cause commodity inflation, specifically mentioning food and fuel.

The thing to watch is the US’ credit rating. Moody’s has already given the government a warning. When the first downgrade eventually comes, things will accelerate.

Property rights will be secure in the aftermath of any collapse. The power structure is intact; the dependent classes are fractured along ethnocentric lines. The middle class could get a lot smaller.

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