Always so enlightening to read Stirling Newberry….
Welcome to the Bungle – The Smirking Chimp
Our real macro-economic policy is “keep the rich Arabs and profitable Asian Central Banks happy.” The numbers are good, and right now, it is really good to be a rich oil baron.
What these people want to see is that you are getting the shaft. It is official policy of the US Federal Reserve that workers cannot get ahead, and if they do, the Fed will tighten money supply until they stop getting ahead. In investing we have a saying, that saying is “Don’t fight the fed”. Right now, everyone who draws a salary or an hourly paycheck that has less than 7 digits to the left of the decimal point, is fighting the fed. Bad idea. Losing play. No wonder John Edwards calls it “a war on work”.
The reason for this is that Arabs and exporting sweat shop countries are loaning us money to buy their oil and manufactured goods. So they don’t want to see you getting ahead, because the only thing they really care about is control over the economy, and if you are getting ahead, that means they have less control. As long as the American worker is digging into debt up to their eyeballs, that means that there is less competition to bid up the prices of stocks, real estate and so on. There’s an economic war, and it isn’t about whether your job goes to Shanghai, it is about whether your retirement money goes to Dubai.
And you are losing that battle. The reason you are losing the battle is not that we are buying so much from the outside world, but because various countries in that outside world – particularly places like China and Saudi Arabia – aren’t buying as much from us as we are from them.
So how do we fix this?
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