14 Apr
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Great Recession, Round 2

Careful reading of the news this week points conclusively to a worsening economy.  A brief review is in order:

April 14, 2011 — MarketWatch
U.S. jobless claims surge above 400,000
The increase puts claims at their highest level since mid-February

April 14, 2011 — CNBC
Inflation ticks up, again
“U.S. core producer prices rose slightly faster than expected in March and the increase from a year ago was the largest since August 2009, pointing to a broadening in pipeline inflation pressures.”

April 14, 2011 — Yahoo Finance
“Emerging market-powers” meet to discuss a post-dollar world?
“The BRICS group of emerging-market powers kept up the pressure on Thursday for a revamped global monetary system that relies less on the dollar and for a louder voice in international financial institutions…What was needed, they said in a statement, was “a broad-based international reserve currency system providing stability and certainty” — thinly veiled criticism of what the BRICS see as Washington’s neglect of its global monetary responsibilities.”

April 13, 2011 — CNBC
Bank Face $3.6 Trillion “Wall” of Debt: IMF
“The world’s banks face a $3.6 trillion “wall of maturing debt” in the next two years and must compete with debt-laden governments to secure financing, the IMF warned on Wednesday.”

April 12, 2011 — Gallup
U.S. Economic Optimism Plummets in March
“Americans’ optimism about the future direction of the U.S. economy plunged in March for the second month in a row, as the percentage of Americans saying the economy is “getting better” fell to 33% — down from 41% in January. It is also down three points from the 36% of March 2010.”

April 12, 2011 — Bloomberg
Q1 GDP Growth Revised down to 1.5% by Morgan Stanley, Barclays
“Morgan Stanley lowered its tracking estimate for gross domestic product in the first three months of the year to a 1.5 percent annual pace from a 1.9 percent forecast prior to the data. Barclays Capital in New York lowered it to a range of 1.5 percent to 2 percent, down a half point. GDP climbed at a 3.1 percent pace in the last three months of 2010.”

April 12, 2011 — AP
Yellen sees no rush to start tightening credit
“The Federal Reserve’s second-highest ranking official on Monday said the economy is not strong enough for the Fed to begin tightening credit, countering a vocal minority of members who argue the central bank’s stimulus programs are contributing to higher inflation.”

April 12, 2011 — Reuters
Big banks are government-backed: Fed’s Hoenig
“Big banks like Bank of America Corp and Citigroup Inc should be reclassified as government-sponsored entities and have their activities restricted, a senior Fed official said on Tuesday… “That’s what they are,” Hoenig said at the National Association of Attorneys General 2011 conference.”

Meanwhile, as the nation approaches the fiscal cliff, our gutless president is castigated by the Wall Street Journal for his less than presidential response to Rep. Paul Ryan’s budget:

Mr. Obama’s fundamentally political document would have been unusual even for a Vice President in the fervor of a campaign…. Mr. Obama ludicrously claimed that Mr. Ryan favors “a fundamentally different America than the one we’ve known throughout most of our history.” Nothing is likelier to bring that future about than the President’s political indifference in the midst of a fiscal crisis.

Anybody who keeps up on the news knows that we’re supposed to be in a recovery.  This was always a lie, perpetuated by a news media desperate to give Obama his due.  The truth is that there can never be a meaningful recovery when America is running a $1.65 trillion annual deficit, and when our Federal Reserve is pumping hundreds of billions of dollars into banks in order to temporarily prevent total stagnation.  These are the actions of desperate politicians who are in over their head and trying to keep their own jobs.

There is no problem with the American public.  There is a problem with our political class, especially Obama and his Democrats, who refuses to let the market operate.  This has led to crisis, unemployment, debt, and now inflation.  Boehner has a stronger case to make and no reason to keep compromising our future.

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