They really are attempting to convince all that the worse is behind us, the economy is coming back to life and quite soon it will be running full speed with all four cylinders humming just fine. Four? It is the new, and improved, "green economy!"
Yes sir, the networks are working overtime informing us how things are looking better, though this might be a jobless recovery. And the current administration wants to convey to us that the stimulus package is beginning to do the trick.
If truth be known, everyone from network presidents right up to the Federal Reserve chief himself is scared to death. Why? Because the forces behind this post World War II economy are not stepping back into the fray. No, they are actually closing purses, stashing wallets and purchasing with cash or debit card rather than credit. And to make the situation all the more muddy, many an American is actually becoming downright irritated that the government itself refuses to learn to live within its means, as the general public is beginning to realize it must.
And really, what has changed since the great downfall began in August 2007?
The bailouts were meant to help unlock credit markets, but why should we expect the U.S. banking system to suddenly decide to throw off caution and start lending as in past days? The toxic sludge that nearly sank these ships of commerce (and actually tanked Lehman Brothers) still sits upon their books, likely to burst forth like an uninvited and wholly intoxicated guest who spews forth malice and self-loathing at anyone within earshot at your party.
Nothing has really changed but the regime in Washington and its penchant to run up deficits no prior administration dared even consider in its wildest exuberance. It does so at the behest of a Congress laid low by the pettiness of partisan politics and a national media now so spineless that American news organizations of the 19th century showed more stamina and wherewithal. The major networks no longer report, but merely regurgitate the dribble that flows out of the West Wing. And how do a people counter such duplicity and blatant disregard for basic reporting skills? They find alternative sources, much to the chagrin of those in powerful positions or the party that is in control.
It is this same kind of change in attitude which probably spells trouble for the economy. The American people are not likely to heed a command to go out shopping, be it wrapped up in patriotic wares. The driving force behind the rise in the markets has been the goosed price of banking shares, organizations that somehow are showing a profit as a result of "cost-cutting measures," done at the expense of their workforce being given permanent walking papers and more jobs shipped overseas.
Meanwhile, the net worth of Americans as a whole is down by about $12 trillion. And wouldn't you know it, during the past two decades American debt has risen to more than $13 trillion, the government now closing in on $60 trillion for future obligations (such as Social Security, Medicare, etc). The richest people on Earth?
Robert R. Precherter Jr., published a book in 2002 entitled "Conquer the Crash: You can survive and prosper in a Deflationary Depression." It is a good read for preparedness. But in one part he advised that the Fed is under no obligation to "save banks, print money or pursue any other rescue." Its "legal obligation" is to protect the U.S. currency.
As we now know, the Fed has done everything it had no obligation to do, and most likely at the expense of the U.S. dollar. Which brings about the question — as Americans what do we do since our government and many non-elected officials seem hell bent on fighting this downturn even if it will eventually make matters much worse?
The first rule is to accept the fact that government cannot be the answer to most of our problems, since chances are they might actually be part of the problem. If the Fed was really created back in 1913 to protect our currency, it has failed the test of time. If the Fed fails to mop up all the liquidity it has flooded our financial system with, we could actually witness the onset of serious inflation within two to three years, if not sooner.
We must take our cue from the Boy Scouts and "Be Prepared." Don't buy into the current drumbeat that things are getting better, and start living life as if things will stay the same for a long time or could even take a turn for the worse. Pay down your debt. Don't take on any new obligations, and learn to love thrift. If possible, pay off your house, your autos or those pesky credit card loans. Start saving like you are your own Social Security Trust Fund, because chances are you will be.
Don't be afraid to invest world wide, or even to open savings accounts with several different safe banks in the world. Research banks and credit unions here in the states to determine which ones have the least exposure to toxic debt, be it sub-prime or commercial loans or derivatives, those "weapons of mass destruction." Take a page from the Church of Latter Day Saints (read Mormons) and set aside space for two years worth of food and water, because we could face a new reality of shortages and social upheaval when the proverbial poop hits the fan.
We are in uncharted waters with this economy as well as with the political scene. With tens of thousands marching on Washington and in other major cities across the country, the rest of this year and 2010 could get very interesting, and very weird.