There Will Be No Double-Dip Recession

What we face is far worse. The global economic system is crumbling and it will take down governments with it. Each of us will be impacted. "Taxing the rich" as the answer to U.S. problems won't happen. Rich and powerful people and their corporations control the government and fund the politicians who only raise it as an answer to get the support of voters who will never see it brought to realization. And it is only a distraction from confronting the real issue, which is the U.S., much of the Euro Zone and Britain are insolvent from their wasteful spending and their generous contracts with and bailouts of giant corporations. And as they fall, they will take Asian and other markets with them.

Is there a more optimistic scenario? Yes but it would take enormous backbone politicians have not shown. The U.S. for example would have to end all its wars, close its 1,000 global military bases and slash its military spending. It would also have to ask its people not to borrow and spend money they don't have to buy foreign made goods they can't afford but instead ask the cooperation of China and other creditors to help America reestablish U.S. production.

The likelihood of this happening is nil. So governments and Central Banks will continue to offer assurances, but as we just saw with the new pathetic U.S. Fed stimulus, they are out of good options. So in their insolvency, they make empty promises. The situation is so desperate, some large investors are buying U.S. T-Bills for their "safety" because they don't know where else to put their money.

The jobs and real estate markets will continue to tumble and social services will keep being slashed. If you haven't already done so, please take protective actions such as paying down your credit cards and reducing your overhead by selling whatever you don't use that costs you money to keep, such as a boat or an extra car. And if you still have a full-time job, cross train so you have more to offer your employer.

Dick
For more economic information, please see "Markets Swoon on Recession Fears," The Wall Street Journal http://online.wsj.com/article/SB10001424053111903791504576587150257111860.html