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Obama’s Presidency and the ‘extreme’ Keynesian model will remain.

Posted by Adrian on November 6, 2008

Our leaders, those hopeless flunkies that have their own interests in mind; personified arrogance of creating ‘order’, yes we have heard it all before, so many times in history. That political interest overlapped in self importance and ‘duty’ to control and ‘rule’ over the population. More notably George Bush Snr ‘new world order’ attempt (mimicked by his crazy son). Order in the markets? This is the reason we are all in the mess, an artificial attempt at pumping wealth into society and it has back fired, big time. The thing is, Barack Obama (now the US president, in case you didn’t know) is going to try and control the markets, by utilizing the most problematic economic model possible – which is Keynesian economics

The extreme volatility that’s occurring is a very good example of government, central bank meddling in the markets. The euphoria of a ‘feel good’ stock market rally when Obama gained Presidency was overshadowed when the market sank (the following day), the Dow dropped 486.01 points (9625.28), the NASDAQ even further. Asian and European markets also all went south.

Barack Obama will do everything he can, although inexperienced and possibly naive in regards to the global financial crisis and a looming severe recession, to keep the equity markets pumped. This ‘inexperience’ and ‘naivety’ will of course lead to volatility right to the point of the world falling into sharp slump (going into 2009). The volatility created now and future will be that ‘false’ confidence in the market, money printing and extended bailouts. Taxes will rise and the consumer is going feel the squeeze on continued higher prices, especially food and utilities. The Federal Reserve believes they have inflation tamed, which is of course a false dichotomy, as does the European Central bank. As I wrote ( albeit briefly) You might as well “write off” the whole Japanese economy, Japan could be that economic dead zone that the world is going to face. The concern would be, with a loose money printers and low rate policy from the Federal Reserve (that has created a precedent around the world); it will inevitably be inflation that will flatten economies into dust. That’s the worry, and since government’s are ‘blowing’ their surpluses (commodity producing countries) sending their and/or sovereign funds into deficit on bailout, stimulus payments and so on. Countries will have no cushion to fall back on, hence countries going bankrupt will be a global epidemic. Hungry, Ukraine. South Korea, Iceland, Argentina are a handful that are close to bankruptcy. The exception of Iceland that did go bankrupt. Point is the leaders and their economic advisor’s have failed, Obama will continue to encourage the Keynesian economic model; maybe more so in a extreme way. To aplease a government that is too large with too many players, the US could be be in big trouble – in the sense the country could go broke very soon.

Like japan, the US could go into a slump (economically) that will last decades. This of course will change the whole axis of geopolitical and economic power in the world.

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