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The Fed upgraded its view of the economy Wednesday, declaring: "Economic activity has picked up following its severe downturn."
But forget all the talk about recovery, V-shaped or otherwise. The economy is actually worse today vs. during the depths of the recession, according to Peter Schiff, president of Euro Pacific Capital and author of Crash Proof 2.0.
"Ben Bernanke is keeping his record of perfection intact of never getting anything right. Once again he's gotten it wrong," Schiff says. "If the Fed really thought the economy was sound, why does he have it on life support? If he pulls the plug, our sick economy is going to die."
Although the Fed never said the economy is "sound", Schiff is referring to the FOMC's renewed pledge that "economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."
Nothing that's occurred in the past six months has changed Schiff's view that America's economy is headed for disaster. In fact, he's even more convinced a true "currency crisis" awaits, and that China will soon stop enabling our reckless borrowing, the basis our "phony" economy. The coming collapse of the dollar and bursting of the Treasury bubble will have devastating consequences for ordinary Americans, and any investors based in dollars, he says.
The economy today is "worse [because] we are much more deeply indebted than in March," Schiff declares. "We've dug ourselves a deeper hole."
Why is Schiff one of the few who "gets it"? Are all our economists stupid or just gutless wonders? I can't understand why I can grasp the problem and they can't.
On May 23, 1933, Congressman, Louis T. McFadden, brought formal charges against the Board of Governors of the Federal Reserve Bank system, The Comptroller of the Currency and the Secretary of United States Treasury for numerous criminal acts, including but not limited to, CONSPIRACY, FRAUD, UNLAWFUL CONVERSION, AND TREASON. The petition for Articles of Impeachments thereafter referred to the Judiciary Committee and has YET TO BE ACTED ON. www.apfn.net...
Structural Adjustment Policies are economic policies which countries must follow in order to qualify for new World Bank and International Monetary Fund (IMF) loans and help them make debt repayments on the older debts owed to commercial banks, governments and the World Bank. Although SAPs are designed for individual countries but have common guiding principles...
SAPs generally require countries to devalue their currencies....
SAPs often result in deep cuts in programmes like education, health and social care, and the removal of subsidies designed to control the price of basics such as food and milk. So SAPs hurt the poor most, because they depend heavily on these services and subsidies....
SAPs encourage countries to focus on the production and export of primary commodities [food and agriculture]
By devaluing the currency and simultaneously removing price controls, the immediate effect of a SAP is generally to hike prices up three or four times, increasing poverty to such an extent that riots are a frequent result
The US is too dependent on Japan and China buying up the country's debt and could face severe economic problems if that stops, Tiger Management founder and chairman Julian Robertson told CNBC.
"It's almost Armageddon if the Japanese and Chinese don't buy our debt,” Robertson said in an interview. "I don't know where we could get the money. I think we've let ourselves get in a terrible situation and I think we ought to try and get out of it."
Robertson said inflation is a big risk if foreign countries were to stop buying bonds.
“If the Chinese and Japanese stop buying our bonds, we could easily see [inflation] go to 15 to 20 percent,” he said. “It's not a question of the economy. It's a question of who will lend us the money if they don't. Imagine us getting ourselves in a situation where we're totally dependent on those two countries. It's crazy.”