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October 31, 2011
Obama Lecturing On Euro Finance? Give Me a Break
Say what you will about George Soros, at least he has enough expertise as a slimy financier to put forth a solution to the Euro Zone crisis.
In what has to be the most vaguely pathetic advice column of the year, President Barack Obama has offered recommendations on what global leaders must do to stop the Euro crisis from spreading to America. You know you are in trouble when a man who has never held a productive job in his career (children are capable of community organizing) is lecturing on finance.
Even more ironic is how the political leader taking us down the pathway of Greece is now issuing a warning on fiscal calamities. Does the President know no bounds? (Don't answer that). From the Financial Times:
Yes Mr. President, after George Bush ruined the world, you presided over the continued bailing out your campaign donators. We have heard this narrative before and it makes no sense no matter how many times you repeat it. The crisis occurred in late 2008, more than two years ago, and all you did during that period was win an election with empty phrases, a coal powered teleprompter, and a Hollywood smile. Fed Chairman Bernanke and the New York Fed did most of the leg work to prop up the banks; that which certainly shouldn't be deemed a "rescue." Heroine junkies aren't cured with another fiat injection of dopamine.
Thank goodness another European vacation for world leaders funded by taxpayers is occurring. Since all the world's problems seemingly melt away at G20 meetings, I expect gum drops to rain from the sky and free puppies for everyone at the close of the latest charade.
Correction: Because of massive government intervention in response to fiscal disasters caused by previous government intervention, the U.S. ONLY added 2.5 million private sector jobs. Had there been no stimulus and passage of such atrocities as Obamacare, private job growth would have been much more robust.
What Obama is really saying is that in order for the U.S. economy to lead the world, he needs to be reelected. The best way to do this is the passage of a short sighted jobs plan that will slightly bring down the unemployment rate till after November 2012. The American Jobs Act is essentially a bail out of his own floundering presidency.
If you believe this proposal for one second, put on the "dunce" hat and proceed to the nearest corner.
Since European leaders put a gun to the head of Greece bondholders and forced a 50% haircut and the European Financial Stability (bailout) Fund was increased to 1 trillion euros, world markets have calmed down. The haircuts were hilariously labeled "voluntary" when nothing government imposes is ever voluntary. Greece bond losses will end up being more than 50% and the doubling of the EFSF won't be enough to shore up a crisis with French banks, but the can has been kicked for the time being. Time to celebrate.
If the crisis hits the U.S., which it inevitably will, banks here may see significant losses. This means less money for Obama's reelection campaign and less government funding outside Federal Reserve monetization. With his lackluster handling of the economy, all the President has left is buying votes.
Obama is referring to China but not by name. Since trade imbalances are the natural consequence of trading in general and the dollars lost find their way back to the U.S. in the form of other purchases, what the President really means is that China should drop its currency peg so Bernanke's printing press can work its magic. China has been leading the world's currency race to the bottom long enough; it's now time for the U.S. to have its turn at the front of the pack. Little does the President realize that China's enormous property bubble, fueled by its artificially low currency peg and cheap credit, is now in the midst of popping.
Yes, because crony capitalism for green energy always turns out well.
The world economy was "saved" by bailouts and liquidity injections from central banks around the world. Structural problems weren't actually fixed but politicians love taking credit for miracles. This opinion article penned by the President, but most likely written by a White House intern, is no different. Expect empty pronouncement of "coordinated action" and fantasy solutions from the next G20 meeting. In other words, expect nothing and you won't be disappointed.
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