In January I did a post on economy “It’s the economy, stupid” mindful of the 1992 Clinton campaign buzzword. Developments at the stock markets shortly thereafter made me pick up the topic again, here, here and here. Today’s record gold price of $1’000 per ounce and the unbridled slipping of the US$ against all major currencies. On top of that a $111 barrel oil price, and no end in sight. I guess it’s time to revisit the topic.
What’s on the news today?
- Six Hedge Funds are on the brink, totalling a net worth of $4 billion in assets. Hedge Funds are “snapping like twigs” according to a Private Equity executive.
- The US retail sector takes a battering. Consumer spending tumbled and shows clearly, that the US economy is in recession.
- Home foreclosures rose 60% and bank seizures more than doubled in February.
- Number of workers on unemployment benefits highest in two and a half years.
What is considered a remedy may in fact even worsen the problem. Rate cuts are increasing the inflation.
Above all, hover the mindboggling costs for the Iraq war:
Much of the problem, economists say, is that every month of combat adds more than $10 billion to a U.S. debt that now tops $9 trillion.
At some point, government debt comes due and the Treasury Department either must pay it off or roll it over and pay more interest, just like a family facing monthly credit card bills.
The issues will increasingly play a role in the next general election. The Pennsylvania primaries will most likely be about economic issues, too. Bloomberg takes a look at Senator Obama’s and Senator Clinton’s tax plans. The candidates better be prepared for more scrutiny.
Speaking of the primaries: It took a dogged blogger to point out to the mainstream media, that they have their delegate numbers wrong. Barack Obama gained more delegates in California, than reported and add to that Texas, which, as we know was won by Senator Obama, not Senator Clinton, all votes considered. Speaking of bloggers, our fellow critter “gorn” has predicted the Texas outcome a full week before the Best Political Team on TV!
I wish you all a good and healthy day!