Tedbits: 2012 Outlook, Part 1 - When Leverage Fails
The saga continues as we head into 2012. That saga is the demise of Ponzi finance and an ASSET-backed economic model in the developed world. We do not know whether the currency and financial system extinction event will occur this year or ten years from now. The questions we hope to answer in this 2012 economic analysis regard only the unfolding of short to intermediate-term ups and downs in economies, financial systems and societies. We will be covering different sectors of the 2012 economy (stocks, bonds, precious metals, commodities, real estate, etc.) over the next several editions of TedBits; this is part one -- a global-macro Austrian overview, the BIG PICTURE so to speak. Don’t miss future issues; subscriptions to TedBits are FREE at www.traderview.com/subscribe/
What we do know is that the demise of the DEVELOPED world’s currencies, financial systems and economies are set in stone, just as one’s fate is sealed when they slip below the EVENT horizon of a cosmic BLACK hole. This time the black hole is INCOME destruction from centrally-planned economies, runaway welfare states, crony capitalism, regulation, taxation and endless MONEY printing out of thin air… a toxic cocktail of wealth destruction.
A DEPRESSION has been written into law in the United States by the Socialist-progressive, legislative supermajorities of 2008 to 2010 in the form of (1) Permanent government expansion (20-25%) via the misnamed STIMULUS Bill, Obama Care (which is no more than NATIONALIZING, further politicizing and tax goodies for sale to the highest bidder/campaign contributor) along with the health care industry, and finally Dodd Frank (more financial regulation for sale and political allocation of credit).
These bills are wrapping themselves like PYTHONS around the largest economy in the world. And (2), SQUEEZING the life out of the economy via 80,000 pages of new regulations a year (sold to the highest bidder from K Street, aka lobbyist row and the biggest campaign contributors), poorly written and in haste by unelected bureaucrats who have no experience in the industries and businesses they are regulating.