Europe’s austerity policies nor America’s growth policies have worked. In Europe, governments collectively spent 44.8% of GDP in 2000. Today it is 49.2%. That’s not austerity, that’s stimulus, according to Bill Bonner.
Americans' wealth has shrunk so much that, in 2010, median family net worth was no more than it had been in 1992 after adjusting. According to the Fed's report, two decades of accumulated prosperity had vanished, mainly due to falling home prices.
Bonner takes on "zombies" in the social security system, health care and now the Department of Defense. A new computer virus, allegedly developed by the US and Israel, has him worried about what might happen if it falls into the wrong hands.
Argentina's hard-charging president Cristina Fernandez de Kirchner has instituted new policies that place stringent controls on foreign-currency purchases, while insisting citizens convert their US dollars to pesos. The Daily Reckoning team is skeptical.
Funded by cheap credit and government spending, Bonner foresees an impending war ahead between the zombies — people who take money from the productive sector of the economy and transfer it to themselves — and the productive parts of the economy.
Both gold bugs and stock market bulls are counting on the Fed to come through with another economic stimulus. And it probably will. But the money won't benefit those who really need it.
The reason we want a collapse on Wall Street is that it’s only way for the economy to get back on its feet. If the feds would just leave well enough alone Mr. Market would have handled the whole thing. And we’d be out of this Great Correction by now.
The Daily Reckoning's got nothing against Japan. But the Japanese economy has gone essentially nowhere in the last 22 years. And now, it has the largest pile of debt in the entire world. Who would want to emulate that?
The feds pay for GIs to go to school. They give grants to the schools themselves. And they hand out hundreds of billions in loans, at low teaser rates to students; sometimes to students who are unqualified and unlikely to get much out of it.
With no sign of a real recovery in sight, Bonner wonders who will come out the winner when the dust finally settles. Will it be the gold bugs, holding on to cash, the savvier stock traders, or perhaps, could it possibly be bonds buyers?
An overall retreat from the US stock market, coupled with worries of a global recession and bear market has Bonner predicting investors won’t be getting off the hook very easily. The odds are high enough for him to advise wise investors to start looking for cover.
Data released this week may show new signs of a global slowdown. But one analyst isn't surprised. From the tech bubble burst to the housing collapse to the resurgence of gold, he's been (mostly) right. Not that he's saying 'I told you so.'
The failure of Facebook's public debut may signal the end of the pie-in-the-sky tech start up, as well as the possibility that the post-crisis recovery rally is screeching to a halt.
Eduardo Saverin's timely renunciation of his American citizenship is no reason to keep him out of the US. People should be able to move where they want, when they want, for any reason.
The financial industry was 2.5 percent of the economy when World War II ended. Now, it is 8.5 percent. How did it get so big, and what are the costs?
The rich are roundly blamed for the country's economic woes. But the problems the economy faces run deeper than tax code matters.
The United States may be headed for the same belt-tightening austerity that has caused an uproar across Europe. Done right, it could actually work.
The Federal Reserve's role should be to protect the value of the dollar. But the dollar has been in decline for most of the last century.
Yesterday it was widely reported that Spanish banks held more delinquent loans than at any time since 1995. The world seemed to be waking to the realization that when you pour bad money after good money, you end up with no money.
As long as the economy keeps growing on a foundation based on debt, the bull market cannot last.