From The Ramparts

Welcome To The Horrors of Bu$honomics

Welcome To the Horrors of Bu$honomics

“The Street is betting the FOMC meeting this month will bring lower interest rates. That is based on lower economic numbers, a continuing credit squeeze at banks and Greenspan’s comment that the real estate crisis and house prices will fall a lot further than people think. Cheap money is now history. The days of big leveraged buyouts are over because the CLO market is dead. Banks won’t lend to each other for more than a week. The current situation is more systemic than the crisis in 1998. It effects far more institutions and will have a far greater impact on the global economy. Those who believe we will get a recovery as in 1999 are mistaken. We are facing a property collapse and hyperinflation. This is also worse than October 1987. This time the dollar has hit record lows and gold and silver are rallying in spite of official suppression. This is January 2001 all over again or October 1929. The US is the biggest debtor in history with external liabilities reaching 35% of GDP. Foreigners are not buying our Treasury paper and that means the Fed will have to buy the bonds, monetize them, and we will have even more inflation. Dropping interest rates won’t work – only a purge will and the elitists do not want to face that. Thus, they will inflate until they cannot anymore.” Bob Chapman’s The International Forecaster 10-06-07 http://www.theinternationalforecaster.com/item.php?articleid=201&topicId

On the macro-economic level the Fed and its fellow central banks around the world are attempting feverishly to stave off a collapse of the economic system as the worsening US mortgage crisis spreads around the world. Alas anything they do will be too little too late and will have a devastating impact on the micro-economic level. This means it will effect our pocketbooks in a very painful way. The picture now and the forecast for the short and intermediate terms are not good. We already see how hard it is to make ends meets. In fact the ends are getting even farther apart every month. “NEW YORK (AP) - The calculus of living paycheck to paycheck in America is getting harder. What used to last four days might last half that long now. Pay the gas bill, but skip breakfast. Eat less for lunch so the kids can have a healthy dinner. Across the nation, Americans are increasingly unable to stretch their dollars to the next payday as they juggle higher rent, food and energy bills. It's starting to affect middle-income working families as well as the poor, and has reached the point of affecting day-to-day calculations of merchants like Wal-Mart Stores Inc. (WMT) (WMT), 7-Eleven Inc. and Family Dollar Stores Inc. (FDO) (FDO) Food pantries, which distribute foodstuffs to the needy, are reporting severe shortages and reduced government funding at the very time that they are seeing a surge of new people seeking their help. While economists debate whether the country is headed for a recession, some say the financial stress is already the worst since the last downturn at the start of this decade.” http://apnews.myway.com/article/20071019/D8SCH2701.html
Anyone who is remotely self-sufficient working and on their own, married with a family or head of a household knows, this is not a news flash. Scuffling and scratching to make ends meet is not something new for Black folks. When white AmeriKKKa was experiencing an economic updraft in the late ‘90's, for the most part we missed it. While there have been major improvements in the bank balances of many Black folks, for the most part we missed out on the rise in millionaires and we tend to be on the minus side of the widening income divide. “Income inequality grew significantly in 2005, with the top 1 percent of Americans - those with incomes that year of more than $348,000 - receiving their largest share of national income since 1928, analysis of newly released tax data shows. The top 10 percent, roughly those earning more than $100,000, also reached a level of income share not seen since before the Depression. While total reported income in the United States increased almost 9 percent in 2005, the most recent year for which such data is available, average incomes for those in the bottom 90 percent dipped slightly compared with the year before, dropping $172, or 0.6 percent. The gains went largely to the top 1 percent, whose incomes rose to an average of more than $1.1 million each, an increase of more than $139,000, or about 14 percent. The new data also shows that the top 300,000 Americans collectively enjoyed almost as much income as the bottom 150 million Americans. Per person, the top group received 440 times as much as the average person in the bottom half earned, nearly doubling the gap from 1980.” US Income Gap Is Widening Significantly, Data Show by David Cay Johnston http://www.commondreams.org/archive/2007/03/29/163/
The ruling elites have rigged the game so they and their cronies live large while the masses are forced to scuffle just to keep their heads above water. Bu$h’s tax cuts for the super rich our Congress critters made permanent have done irreparable damage to AmeriKKKa’s fiscal health and stability. But this is part of their program to radically restructure the wealth-poverty imbalance in favor of the super rich. To accomplish this the Bu$hites have cut appropriations to Social Welfare programs while providing the most generous government largess (corporate welfare) to their friends in the, banking, telecommunications, pharmaceutical, defense and security industries. Even the Congress knows this is true. “Under the Bush Administration, the ‘shadow government’ of private companies working under federal contract has exploded in size. Between 2000 and 2005, procurement spending increased by over $175 billion dollars, making federal contracts the fastest growing component of federal discretionary spending. This growth in federal procurement has enriched private contractors. But it has also come at a steep cost for federal taxpayers. Overcharging has been frequent, and billions of dollars of taxpayer money have been squandered.” Dollars, Not Sense: Government Contracting Under the Bush Administration http://oversight.house.gov/story.asp?ID=1071
Couple the open private contractor hole Bu$h’s wars without end are shoveling our tax dollars into with the waste, fraud and corruption that has become the hallmark of the Bu$h administration and you can see why the government is broke! “Federal procurement spending is highly concentrated on a few large contractors, with the five largest federal contractors receiving over 20% of the contract dollars awarded in 2005. Last year, the largest federal contractor, Lockheed Martin, received contracts worth more than the total combined budgets of the Department of Commerce, the Department of the Interior, the Small Business Administration, and the U.S. Congress. The fastest growing contractor under the Bush Administration has been Halliburton. Federal spending on Halliburton contracts increased over 600% between 2000 and 2005. Dollars, Not Sense is based on a review of over 500 reports, audits, and investigations by government and independent bodies, such as the Government Accountability Office, the Defense Contract Audit Agency, and agency inspectors general. It also draws on interviews with experts, the Special Investigation Division’s own extensive investigations, data from the Federal Procurement Data System, and investigative reporting. In addition to analyzing the mammoth increase in federal contract spending, Dollars, Not Sense provides the first government-wide estimate of the number and value of “problem contracts” under the Bush Administration. The report is accompanied by a searchable database of problem contracts.” Dollars, Not Sense: Government Contracting Under the Bush Administration http://oversight.house.gov/story.asp?ID=1071
On the personal level AmeriKKKans are incurring more and more debt until we are now defined by the mounds of debt we owe. Granted part of it is our fault for trying to keep up with the proverbial “Jones” and purchasing ourselves into oblivion. But we have been duped and programmed into it by the government, the banks, credit card companies and the media. “ Having been miseducated to the point where they cannot think rationally, Americans began using their houses as cash machines, refinancing as they went. In 2005, private households raised $1,080 billion through mortgages. Of this amount, they only spent $95.1 billion on higher-priced homes. Spending on goods and services rose in total by $539.9 billion, relative to an increase in disposable income of only $354.5 billion. In other words, about one-third of the increase in consumer spending was based on home mortgage borrowing.
The real estate bubble began to burst in the third quarter of 2005, with mortgage borrowing peaking at $1,225.9 billion per annum. Falling steadily, by the second quarter of 2006, borrowing on home equity was down to $819.6 billion. Some of this sharp decline was also caused by increases in consumer credit costs.” Economic Cannibalism http://www.new-enlightenment.com/econ_crash.htm
The ruling elites are juggling the interest rates in an effort to prevent the major banks around the world from going belly up. But their actions will sink the US dollar even further. What this means is the few dollars we possess will be worth less and less so we will need more and more of them (hyperinflation) to buy a fraction of what we used to be able to purchase. We see this now as we experience skyrocketing prices, especially for food and energy. Couple this with stagnant wages and rising unemployment (the government’s unemployment figures are deliberately under reported) and the economic picture for Joe and Jane Sixpack is ominous; so you know Pookie and Shaneyney are catching holy hell. Unfortunately this is going to get progressively worse. When you couple hyperinflation with the, mortgage crisis, the credit crunch and daily stock market roller coaster rides you will probably see many of your 401K and pension funds decimated, and the future begins to look really bleak. The ruling elites know this, that is why they are gearing up mercenaries and private armies for domestic use just in case folks get a little too upset and take their angst and frustration out on the government.
Now the ruling elites and their Neocon puppets find themselves between the proverbial rock and hard place economy wise. The situation is especially tenuous for them now as much of the world seeing the imperialist fascism gripping the Bu$h administration is wisely moving to protect themselves economically by replacing the sinking US dollar as the world’s reserve currency. Watch as more and more countries like Russia, China and Latin American nations forge economic, political and military alliances to protect themselves from the ravages and rapine of Uncle Sam and distance themselves from the US dollar as the AmeriKKKan empire implodes. The masses in AmeriKKKa are caught in a vortex of economic Karma that must play itself out. Unless there is a major paradigm shift on both the macro and the microeconomic fronts, it really doesn’t look good for working class and poor people in AmeriKKKa. This is the real skinny on Bu$honomics the talking heads in the corporate media will never tell you.

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posted by Junious Ricardo Stanton @ 6:25 PM