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United States of America = Banana Republic?

On October 22nd 2009, Sen. Judd Gregg (R-N.H.), ranking Republican on the Senate Budget Committee , says that the U.S. economy faces a future as a “banana republic” if current federal fiscal policies continue. " Congress works for the next election, not for the next generation." In April 2009, Missouri Republican US Senator Kit Bond likened Barack Obama 's administration to a banana republic if they proceed to hold public trials on the issue of torture, giving the term banana republic a bimodal definition in the context of the ongoing US torture investigations. [23] In May 2009, Paul Krugman, columnist for the New York Times , referred to the state government of California as a banana republic. He was commenting on the state's tax system, in which taxes cannot be raised even in an emergency without a two-thirds majority. The state constitution requires that the budget be balanced, denying it the ability to borrow, while gerrymandering has turned many dist...
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FOOD FOR THOUGHT: All That Glitters Might Be Gold

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by Charles Maley Although Gold might be a bit stretched in the short term, it is not hard to see where it could go a lot higher in the long run. I found some interesting charts on Agora Financial website that fall into the “a picture is worth a thousand words” category. First, let’s look at the expansion in the monetary base. The monetary base is not only in a vertical ascent, but also without precedence. We have never seen anything like this. The monetary base is essentially the Federal Reserve Bank’s currency and reserves. Now, with an expansion like this you would think inflation would be rearing its ugly head, but as hedge fund manager John Paulson points out “that’s because this base money has not yet been lent out and multiplied throughout the economy. Yet the monetary base and money supply are highly correlated, almost 1-to-1 between the two.” So what does this mean? I think it means that soon or a later the money supply will follow, and if money supply grows faster th...
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This Could be the US within Years

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This Could be the US within Years Let’s see… Greece is having trouble with unfunded liabilities, runaway debt and constituents that demand they live off the public largess while much of the world recognizes that the current situation as unsustainable. I don’t see how the US is much different. While there are rosy projections that we’ll eventually be decreasing our deficit over the next few years if all goes well, what’s clear even in the most optimistic government models is that in 2030 and beyond we have a runaway situation. We’re seeing states and municipalities struggling to control debt and most of it stems from the overly generous pension and healthcare obligations they’ve made to generations of public-sector workers that is unsustainable. While the private sector has cut jobs, real wages and forced increased employee contributions to benefits for a decade, public workers have pretty much maintained the status quo as if they live in a vacuum. I can’t blame the worke...
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