Lie of the day: "I dread looking at Wall Street," "It's not going to be a pleasant sight." Senate Majority Leader Harry Reid.
Does anyone really think Harry Reid cares what the stock market does? I don't. The stock market was down several hundred points in the morning, but has recovered substantially since. Even the market realizes this isn't the end of the world. The automakers should go into bankruptcy reorganization like the airline industry did, and other industries that have failed. When an industry becomes non-competitive because of onerous unions and lousy management, it's time to start over. Reorganization will make the automakers come out stronger in the end. Isn't this exactly what chapter 11 reorganization for?
The Democrats are all about saving the unions. It is not about saving the auto industry.
Instead, our socialist president Bush wants to bailout the auto industry too. "The current weakened state of the economy is such that it could not withstand a body blow like a disorderly bankruptcy in the auto industry," said White House press secretary Dana Perino. And, now they want to use part of the 700 billion dollar package as a loan to the auto industry. If congress won't approve a bailout, let's go through the backdoor. How does this happen? Congress says "no" to the bailout and Bush goes ahead and does the bailout anyway. Did someone annoint him king?
I wonder if I borrow a lot of money, fail to pay it back if the government will bail me out.
I just purchased treasury inflation protected securities, (TIPS), because with all this money the government is printing, 7 trillion dollars and counting, we are sure to end up with hyperinflation in the same way Argentina and The Weimar Republic did. In the Weimar Republic the exchange rate for the German mark was 4.2 to 1 dollar at the outset of World War 1. By August 1923, it was 1 million to 1. How is that for inflation? In Argentina, From March 1989 to March 1990, inflation reached over 20,000 per cent. Citizens ran to buy their groceries in the morning trampling down neighbors and friends because in the evening the prices would triple. Are we headed in the same direction? You often hear that we are in a deflationary cycle, but printing money is inflationary, so we will see inflation return with a vengeance if we do not soak up all this excess liquidity in the marketplace. I predict TIPS could yield 8% in the next couple of years.
We need to get our act together or this economy is doomed.