But somebody is still buying things; like the Fed, for instance, which bought up $1.4 billion in government debt last week! Hahaha! In fact, the Federal Reserve (which is, if you recall, just a private bank that, in an almost-deserted Congress on an infamous Christmas Eve in 1913, was given extraordinary powers to create debt and money), now admits to owning $782 billion in U.S. government securities! So, it looks like the Federal Reserve created more credit in the banking system, which they themselves borrowed to buy government debt for themselves! Hahaha! What a scam!
But this little Fed flimflam aside (which is hard to say five times quickly!), without new money coming into the system through the banks, the only way that the stock market, or the bond market, or the housing market, or any market, can go up, is for the new buyers to get the money by selling something else - or if some other country's central bank is supplying the new money. Either way, this is definitely not how to achieve "economic nirvana".
And even if the laughable lie that, "you can make enough money to retire by investing in the stock market over the long term" was actually, somehow, miraculously true, and if the Fed was somehow almost justified in creating all this money, debt and inflation, it would make no difference! CNNMoney.com now reports, "Nearly half of all workers saving for retirement have savings that fall short of the $25,000 mark." Yikes!
"Predictably, the youngest workers (ages 25-34) dominate this group - 68 percent of them have less than $25,000 earmarked for their later years." Ahhh! The kids! That makes it look a little better! But just as I was starting to breathe a little easier, I get hit with, "But so do half of workers age 35 to 44 and a third of workers age 45 to 55 and over"! Gaaah! Now I'm freaking out again!
Even worse, "Overall, 40 percent of respondents said they are not currently saving for retirement while 34 percent said they didn't have any retirement money saved whatsoever."
The absolute Worst Of All News (WOAN) is that, "A full 25 percent said they had no savings at all - retirement or otherwise." A quarter of workers have nothing! Anywhere! Zip! Zilch! Squat! They spend everything! If we have any economic downturn at all, even a mere blip in the economy, a quarter of Americans will not have enough money to sustain them through the first weekend!
And not only do they have nothing, but these are some of the same idiots who are up to their ears in personal debt, credit card debt and mortgage debt. And they're on the hook for their share of city, county, state, and national debt, too! They owe hundreds of thousands of dollars each!
And this, "hundreds of thousands of dollars" assumes that neither the citizens themselves, nor their city government, nor their county government, nor their state government, nor their federal government, will ever, ever go farther into debt by so much as another lousy dime. And it also assumes that interest rates will constantly stay at abnormally low levels, and that they will have a job that pays higher and higher wages forever, too. Hahaha!
Well, that ain't the way things work in real life. Perhaps America should take a look at a cartoon from Bizarro.com - the one where a teacher is standing in front of his History 101 class and tells his students, "Bottom line: Pay attention in this class and you won't be as easily fooled as your parents."
And when you constantly live hand-to-mouth like this, you are always acutely aware of the smallest change in prices. Perhaps that is why a new Bloomberg/Los Angeles Times poll found that "Six in 10 who were surveyed predicted a recession, similar to the 64 percent who anticipated the economy would contract in a December 2000 poll by the Los Angeles Times three months before the last decline." Brrr! Did you feel a cold wind on the back of your neck, like the sharp, cold steel of a guillotine blade rushing towards it? Me, too!
Just yesterday at the Democratic debate, John Edwards was defending his involvement with hedge funds by saying that hedge funds have something to teach us about financing universal health care. It is like Bush and co. saying social security should be replaced partially by workers investing in the stock market through mutual funds and the like. Both presume that the economy will continue to grow and that companies will continue to generate profits. If Bush is a moron when it comes to the economy, so is John Edwards.