The Federal Reserve is trapped like the dirty rats they are. There is no turning back now. They’ll continue to debase the currency until it collapses. Talk of tightening is bogus hogwash. And I might add, I do not think 2.6 percent growth in the 4th quarter amounts to escape velocity of a sustainable recovery.
The economy will benefit from an ephemeral lift to the dollar as investors from around the world attempt to escape the collapse of the financial system. But as the dollar strengthens, and I’ve prognosticated such previously, American exports will become less competitive. I seriously doubt the American consumer at this stage can carry the world economy on its back.
I might also add, the U.S. is losing its battle with Russia. First the Ukrainian government and its Nazis are losing to the rebels. Secondly, Syriza is likely to bolt the EU and join the BRICS which might very well spark a stampede. Which is to say, NATO is likely to implode. The banksters are actually just gangsters, so let’s call them such. Like any other form of criminality the gangsters’ bankerism has undermined the world financial system–It is clearly kaput.
First the Euro zone will implode, followed by Japan, and the Swiss economy will fall into recession. The United States will linger for a tad bit longer, but will also collapse as it enters an economic death spiral.
Lackluster Christmas retail sales were a sign of a lack of effective demand, that will lead to a downsizing of brick and mortar stores. Lack of demand, I might add, due to the ongoing debasement of the currency. Retail stores will in turn reduce orders to suppliers, leading to layoff in manufacturing. As idle factories in China indicate, there are problems in the designated comsumer of last resort–the Americans. But this will also eventually hurt U.S. manufacturers as well leading to cascading layoffs. But as retailers and manufacturers layoff to weather the storm, this is but another nail in the coffin of effective demand.
Unemployed people have a very difficult time going on a buying binge. And by the employment/population ratio, the number of people in the labor force has diminished markedly (by approximately 21 million). So this downturn should take the employment/population ratio below its lows, making it worse than 2008. The real intractable problem will be in the capital goods and equipment industry, as manufacturers begin to cut back on investment. During the last Great Depression, this sector was very hard to restart–so there will be intractable problems in Germany and Japan the key suppliers of capital goods that will destabilize both. Remember the last time Germany was destabilized. A word to the wise: watch out! Pegida is just the warm up to some real fireworks. Japan, as I type, is already rearming.
All the handiwork of the gangsters’ bankerism. There is not going to be any new world order, but a replay of World War II on a vastly more destructive scale. Beyond hope and tragedy, the gangsters print even while they’re buying their blast proof bunkers in New Zealand and Patagonia. They know what they’ve created: “It’s alive, alive!”