The world’s financial systems are succumbing to fear and negative in exponentially increasing spasms that threaten shatter to more than 200 years of economic development.
Major US corporations are now on the precipice of surrender with GM’s price plummeting and GE quietly informing SEC that it fears it will not be able to obtain cash needed to maintain operations.
The Dow Industrial Average fell more than 600 points today and has lost almost half of its value since its all-time high. The Japanese Nikkei is down 11 percent in early Friday trading, leading indices across Asia into a free-fall.
The combined loss of wealth and confidence threaten to plunge the world into an economic depression not seen since the 1930s. From the International Monetary Fund’s Outlook released today:
The world economy is now entering a major downturn
in the face of the most dangerous shock in mature
financial markets since the 1930s. Against an exceptionally
uncertain background, global growth projections
for 2009 have been marked down to 3 percent,
the slowest pace since 2002, and the outlook is subject
to considerable downside risks. The major advanced
economies are already in or close to recession, and,
although a recovery is projected to take hold progressively
in 2009, the pickup is likely to be unusually
gradual, held back by continued financial market
deleveraging.
A majority of Wall Street Journal’s economists now predict a recession in the US to extend at least 9 months–the longest in 50 years.
Some steps I would take:
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Fire Henry Paulson and Ben Bernanke. Each time either man speaks, people around the world lose confidence in the financial systems. However stupid or corrupt they might be is irrelevant at this point. They are net drains on the world economy.
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Rapidly indict executives of Fannie Mae and Freddie Mac. These two companies are primarily responsible for the meltdown in economic value and the inflation of real estate the fueled the collapse. People want someone to fry for this, and Jim Johnson, Franklin Raines, and Jamie Gorelick are the perfect candidates.
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Leave the stock market closed for two days next week. Let people take a breather.
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Stop throwing new policies at an information-overloaded public. The $700 billion bailout bill following the $200 billion Fannie/Freddie bailout and the AIG bailout, and the myriad other bailouts and schemes have not even begun to work. No mas, at least until we see the results of actions already taken.
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Shut down all federal government programs begun after 1930. A loss in faith in the US government’s credit worthiness now would flood the world with US dollars, kicking off inflation at the 300 percent annual level.
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Stop all payments to foreign governments and the UN.
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Ratchet up military spending to prepare for a 4-million man force. Our enemies will use our economic hardship as an opportunity to attack. Skyrocketing unemployment will make many people eager for a job in uniform. Spending on weapons and supplies will offset stagnation in the private sector. This combination will make the military the best use of the dollars the federal government has left.
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Begin developing plans for a WPA type program. We are likely to see unemployment rates between 10 and 20 percent beginning in 3Q09 and continuing for several years. Welfare doesn’t work–people must earn a living.
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Do NOT elect Barack Obama and a Democrat Congress. They will institute a Marxist-style government using the economic calamity as justification. If this happens, you will not a free country back in your lifetime.
Sorry for the bad news, folk. I hope and pray that I’m wrong, but everything tells me I’m right.
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