By Peter Andrew
Leading the way Right with unique & fun
Conservative American Views.
Obama’s Lost Decade
President Barack Obama and his economic team have decided to follow Japan’s economic path… the same one that resulted in Japan’s “Lost Decade!” Obama wants to be re-elected so badly, that he and Ben Bernanke at the Federal Reserve Bank are proceeding with methods they think will improve the economy quickly. That’s the catch though, this quick fix (if it even works) leads to long-term nightmares. Obama gains, U.S. pains.
While the President meets with 20 nations in South Korea to discuss the global economy,…
“G-20 officials — whose countries comprise 85 percent of all economic activity — have pledged not to use their currencies as trade weapons. But tensions reignited last week when the U.S. Federal Reserve announced a $600 billion bond buying plan that angered many trading partners. Obama… defended the Fed’s move as a way to hasten a narrowing of huge gaps in trade and investment by engineering a weaker U.S. dollar — thus putting pressure on countries with large trade and foreign exchange surpluses. Other countries complain excess cash may flood into their markets seeking higher returns, pushing their currency values higher, squeezing their exporters and inflating bubbles in stocks or other assets that could destabilize their financial systems.”
So while Obama pressures China not to do things to weaken its currency, he turns around and takes steps to do just that at home! Steps that will result in inflation, inflation on purpose!
William Patalon the 3rd is Executive Editor of Money Morning and the Money Map Report.
”If you think the “Lost Decade” Japan endured during the 1990s was deep and painful, stick around: As the global financial crisis that was jump-started by the meltdown of the subprime mortgage market continues to unwind, the U.S. economy is headed for a financial Ice Age that will make Japan’s 10 wasted years seem like a single chilly night …It’s going to get worse. Much worse. And here’s why.
Just look at what happened in Japan. Success in the export markets – coupled with a strong tariff policy that protected the home market from imports – pumped up the yen and led to a massive buildup of cash in both Japan’s corporate coffers and among its consumers. That spawned an era of easy credit, and that fueled a frenzy of stock-and-real estate speculation unrivaled since the U.S. Great Depression.
…On Dec. 29 of that year, the Nikkei 225 Index topped out at 38,957.44, before closing at 38,915.87. By the following September, it had nearly been halved – and there was still much more bloodletting to go (despite several subsequent rallies up over the 20,000 threshold, the Nikkei ultimately bottomed at 7,830 in April 2003. It closed yesterday – Wednesday – at 12,760.80, still down 67% from its trading high 19 years ago). ..houses were selling at 1/10th their peak value, …an estimated $20 trillion in stock market and real-estate wealth had been vaporized..
As horrific as the damage Japan suffered through that damage sounds, here’s the thing: The U.S. financial crisis is much, much bigger, and the resultant “Lost Decade” is arguably going to take much longer to work through.
Patalon says Bernanke has essentially thumbed his nose at the free-market system. True that. Things are changing. Did you know Dubai owns the NY Chrysler building?! These changes could make the economic nightmare we’re in now merely part one of a two-part movie. Read Patalon’s entire article here.
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