Tuesday, December 8, 2009

The Hits Just Keep On Coming

For this citizen, Tuesday the Eighth had to rate as one of the more surreal days of the last few months. On this day, two days before accepting his Noble Peace Prize, President Obama decreed that, in order to jolt Main Street back to life, more stimulus must be provided to the tune of an estimated one hundred and fifty billion dollars. "The U.S. must spend its ways out of a recession." Yes, Mr. President, and the drug addict must shoot his or her drug of choice into their veins so as to achieve good health.

And pardon me if I am bit confused, because, according to the government, the recession ended earlier this year. I mean, it's been in all the papers and on T.V. Why do we need more stimulus for an economy that is already, well, stimulated? A few questions pop out. Will the Obama Administration manage to send the bulk of the proposed one hundred and fifty billion dollars primarily to red states as was done with the original stimulus package? Equally, I wonder if Congress will pack the pending stimulus package with the same amount of
pork as they did the last one? And perhaps, most importantly, I can't help asking if the next stimulus package will just simply flat out kill the patient?

I must admit that I have a somewhat different concern than Meredith Whitney, who believes that the government is out of bullets with which to address our rather appalling predicament. Or perhaps more precisely, I imagine a different outcome than Ms.Whitney does. Where she imagines no ammunition, I imagine projectiles that kill. But I digress from the discussion of surrealism as it pertains to today's announcement. Which brings me to: Gold.

Somehow the yellow dog managed to get flattened even in the face of more evidence that argues strongly that Uncle Sugar will continue to spend, in large amounts, money he doesn't have. Markets do move in ways that often defy reason, at least for a time- and occasionally for a very long time-but generally they sort out what is what. With that in mind, it is hard not to believe that investors will not be sorting out that owning coins and bullion fabricated from the barbarous relic will almost certainly be a better bet going forward than investing in a currency that is so absolutely mired in IOUs that a one way ticket to oblivion is more certain than January snow in The Rockies.

1 comment:

Anonymous said...

Certainly the government thinks it has enough bullets to keep the Fed's free money machine gun going.

But I agree it's all a joke. I could've supported Keynesian stimulus in principle if I had any confidence that they wouldn't deploy it in utterly idiotic ways.

So what did they do with the first outlay? Stupid, reactionary ad hoc crap like cash for clunkers and housebuyer tax credits. Yeah, reflate that bubble and help zombie GM stagger along another few steps! It'll drum up some temporary phony numbers you can crow about.

And that business about many of the best-stimulated districts being Republican-held! WTF is up with THAT?!

These idiots can't even get to-the-victor-go-the-spoils right!