In Asia, incomes rise with prices, but in America, no such luck
It's hard to get in the spirit of the 'economic recovery' when America is still dealing with so many financial woes
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3) The increasing scarcity of cheap energy, land, water and raw materials.Skip to next paragraph
Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning (dailyreckoning.com).
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4) The decline (suicide might better describe it) of the American Empire.
5) The approaching end of the dollar-based world financial system.
There are probably a few more we forgot to mention. Each one on its own might be fairly easy to decipher and predict. But they work together…and at cross-purposes. It’s hard to figure out what is really going on…or what is causing it.
For example, the correction tends to depress prices. But the big expansion in the developing world tends to increase them.
And there’s one more major pressure on prices – the feds. The US controls the world’s reserve currency. And the US is working hard to inflate the world’s supply of dollars. That too should increase prices, eventually.
The trouble with inflation today is that it is the worst kind of inflation. It makes prices go up…but not incomes, at least not in the US. Incomes are rising in Asia. So, people can buy more cars and more meat – and push up prices. Then, Americans pay higher prices…while their incomes don’t rise.
Why don’t their incomes rise too? Because the US is in a Great Correction. It spent too much and borrowed too much in the boom/bubble years. Now, it’s paying the price. That’s why so few houses are being built; we built today’s houses yesterday. And it’s why so little money is being borrowed and spent today; we already spent it.
The Fed seems to have no idea what is really going on – probably intentionally. So, it tries to combat the correction by issuing more credit and printing more dollars – as if we didn’t have enough already. This extra money further pushes up prices, adding to Americans’ misery.
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