With the Obama administration now showing a complete “do nothing” approach to the oversight crisis in US banking, it appears Goldman Sachs (also known to many as “Le’violette main d’Israe’l”) not only has succeeded in gaining a set of personal keys to the US Treasury Department, but has its tentacles in a complete squeeze of the entire government itself. This feat has been blessed by the Federal Reserve Bank; who together have created an even larger bubble in bank stocks, since before the crash! In any other country in the world today, this would be known as “a conspiracy”.
Their current practices are now creating an extremely dangerous “triple bubble effect”. Bubble #1 is each time the Treasury’s money machine turns to secretly purchase large US bank stocks, it in turn is making $1 stocks trade up to $3.50, $8 stocks to trade at $25 and Goldman Sachs stock of $60 to trade at $140. Bubble #2 comes when that same printing press of paper money is currently being used to, get this “purchase it’s own government debt securities”! Imagine what the true worth of that actually is. The 3rd bubble comes in the very action of the present US Treasury’s money machine printing any money at all. Each time it now does the true value of its currency decreases times 3, leading the US dollar to peso-like levels if an honest audit could be held today! All in all, putting your funds into “anything” in US markets makes a mine field seem inviting at the present time. If there ever was a time to “dump American”, today would not be a bad one.
This all comes against a backdrop of some pretty startling statistics which are causing the United States to slowly cease being as it ever was intended, while unintentionally decoupling itself to an even greater degree from any stable international economy. Industrial production in the US is still in free falling double digits, while for the first time in 50 years; its GDP rate has decreased for two back to back quarters. Defaults in corporate debt haven’t slowed, with some 40 issuers in April alone having fallen prey. By March 2010 Moody’s expects this rate to be a whopping 14.3% and no one seems to be paying attention to that ever growing “higher taxes cloud”, looming still over potential consumers.
The seasoned professionals who have some of the highest percentages of accuracy in their forecasting outlook, are now leaning heavily toward the consensus that the US will likely experience a double-recession. If you go back to the years 1980 and 1982 the characteristics have very growing similarities with the current rhythms setting the stage for a rise in commodity prices over an environment of monetary easing and a falling dollar.