Be Warned, again

We were warned before, but it did us little good. We are now being warned again. If you are wise and lucky, then you may be able to minimize your personal losses. For others with little, like myself, there is little we can do to prepare for the next chapter of economic disaster.

I caught just a few minutes of my favorite radio host talking with Ravi Batra, and what little I heard was disturbing. They were in agreement that a new economic bubble was going to burst not long from now. When exactly that may be, they could not say, other than certain powers that may be could keep sticking their fingers in the dike until the next election cycle is completed. I suspect that they are correct, because they are smart educated men who have no vested interests in profiting from the losses of the masses.

They contented that no structural changes have been made in our financial system while speculative investing has inflated commodities such as gold and oil. Meanwhile, the national debt has never been greater nor has the debt burden of Americans ever been so great. One-third of mortgages are under water.

I don't think one needs to be an economist to understand Batra's wage- gap theory. It's pretty simple. If productivity outpaces workers wages, then nobody will have enough money to buy much stuff. Supply and demand. Productivity= supply, Wages= demand. You don't need to be an economist to figure out that supply and demand need to be relatively balanced for the economy to be healthy.

I guess it's about time for me to add some more labor into Moore's Law, less work, but I digress.

Back to Batra, or about him, "on the eve of the Great Depression, 1 percent of the people in this country owned 36 percent of the wealth — the highest wealth concentration in this country, up to that point. Currently, the richest 1 percent of U.S. households have 38 percent of the wealth, according to Edward Wolff, professor of economics at New York University.
In 2005, the Fed chairman’s continued love affair with debt and rising productivity at the expense of wages led Batra to write Greenspan’s Fraud, a searing critique of Greenspan’s economic policies since 1987." which I lifted from here.

If I had any money in stocks, I sure as hell would get it out. The stock market is not a good place for middle-class money which includes retirement accounts. I would not invest in gold either.

The wealthiest 5% own about 75% of stocks. Let them take the losses, they can afford it. The bottom 80% of wealth holders only own about 4% of the stock market. If that bottom 80% took all their money out of stocks, it would hardly matter. It wouldn't create a run and collapse the financial system. Don't let the propagandist talking-heads fool you. By the way, I got those figures here. You can find more up to date information at the Economic Policy Institute.

I sure hope Batra's optimistic predictions come true and we witness The New Golden Age: The Revolution against Political Corruption and Economic Chaos.

In the meanwhile, get ready for a rough ride that may last a few years. It looks like a return to Depression Economics.

Here is a great article outlining the history of how we got here.

Near the end of January 2010 we witnessed the Dow Jones drop more than 500 points in reaction to President Obama's call for financial reforms. I consider this shot across the bow as another example of how a small minority of financial elites can produce big results. Too big to fail should be too big to exist, but the giants do exist and will not go gently into the night.

As I write, I am watching Meet the Press and it appears that a lie of omission will be committed by ignoring the big story of fascist victory in the Supreme Court. We shouldn't be surprised, NBC is a big corporation owned by another bigger corporation. Face the Nation on CBS sure devoted lots of time to the matter, good for them.

Alan Grayson appears to be aligned with main street, but I doubt his legislative proposals to save our democracy will get any traction....at least not without your help. Until then it will remain a democracy for the few, as it has always been.