June 28, 2011 at 1:07 PM
As pictures of civil unrest in Athens are broadcast today in the U.S., we are being assured by the MSM that Greece has little in common with America. That’s why it is up to me to inform our clients that U.S. deficits and debt as a percentage of GDP are at the same level today as what Greece displayed just a few years ago. But that fact—if it is being acknowledged at all—is quickly dismissed, because we are also told that the U.S. has a single currency and a printing press that can save us all. What complete nonsense! Once the bond vigilantes come to America and bond yields surge, our saving grace is going to be inflation? Yep, that’s our government’s long term strategy. To boost GDP growth, strengthen our dollar, increase foreigner’s faith in our debt market and lower our borrowing costs we are going to use Al Capone’s printing press.
Meanwhile, back in reality, N.J. now finds itself in such a dire fiscal condition that it has resorted to seek a $2.25 billion bridge loan from a commercial bank to tide it over the first few weeks of the coming year. The highly unusual move is being sought to buy some time while the state hopes to prepare for a late-summer bond offering.
Not to worry, once again our government has a plan. How about releasing more oil from the Strategic Petroleum Reserve! The move on June 23rd proves in order to qualify to serve in government you must first receive a degree in economics from the school of mentally challenged single-celled organisms. Last Thursday, the Obama administration announced the release of 30 million barrels of oil from the SPR, which amounts to less than two days’ domestic consumption. This insane attempt to temporarily manipulate oil prices is completely misguided. Wouldn’t it make more sense to raise the value of our currency instead? That would be a more permanent solution to high oil prices and it wouldn’t reduce our emergency supply of oil.
By the way, oil prices are higher today than where they closed the day after the decision to raid the reserves was made.