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    • Mon Jun 23rd 23:46 PM
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      High Likelihood of a Market Crash
      How can people villify Obama, when the so-called pro-business President, Mr. Bush has moved this country from a prosperous nation with a surplus budget to a nation where most citizens are struggling with cost increases in the basics: fuel, food, and healthcare.

      Mr. Bush is a not-very, bright, previously rich kid, a business failure, who rose to power on the strength of his Dad's position/connections, a likable personality, and a good sense of humor. But who's laughing now?

      We financed a war with money borrowed, largely from China and Japan. We enjoyed an artificial climate of prosperity, the foundation of which was the squandering of home equities, pumped up by bad Fed Reserve policy. What happened to Liberty bonds, rationing coupons, the draft, and other hardships the nation willingly endured during past wars. Oh, that's right, Japan, China, and Germany were not offiering to supply us with cheap goods, and use the profits to finance our wars in 1941. We had to pay for the war ourselves, then! How old-fashioned! Easy credit wars are so much cooler! But, surprise!! Now the bill comes due at the gas pump and the super market.

      The Fed discount rate of 2% is absurd in a world of galloping inflation. But if they raise it, financial institutions will fall under the weight of all the ARM-mortgaged properties out there, which will go into foreclosure. Because if these so-called prime mortages, which are adjustable and pegged to prime rate or US financial instruments, start to go under, then the so-called sub-prime crisis will have been just the tip of the iceberg. Our econonmy will dive like the Titanic. So we have to suffer the low interest rates and inflation, as the alternative is catastrophe.

      As far as restraining speculation in oil goes, be careful what you wish for, you might just get it. The strong oil market is soaking up a tremendous amount of US dollars, a large portion of which comes from China/Japan/Gemany, and goes into the pockets of the various Arab states, who then recycle the money back into the US ecnonomy, not just by buying US debt, but by financing captial acquisitions, such as the sale of the Penn Turnpike to a Spanish-led venture, and the sale of Anheiser-Busch Belgian interests. It is only this recycling of US money that prevents the collapse of the US dollar, which would otherwise sink like a stone under the wieght of current 2% Fed reserve policy.

      Raising interest rates would sink the real estate market under the weight of foreclosed properties, which would sink the banks, making foreigns investors extremely unhappy, and they would sink the markets. Banks lent money to people, who were never qualified to pay it back, and in many cases committed fraud on their loan apps, while the banks turned a blind eye to obvious fraus, in order to make a quick buck on loan fees. Now we all have to pay at the pump for the greed, fraud, and hysteria of some of us.

      There is a pressure built up in the system, due to all the egregious errors of the past 7 years. The high price of oil is where the pressure is getting blown off. If Congress could force the price of oil down, the dollar would sink with it. The damage has been done. There are no easy fixes.


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