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Posts Tagged ‘Financial Crisis’

Financial Crisis

“In his book…A Christian View of Men and Things [Gordon] Clark comments that the growth of government is the greatest tragedy of the twentieth century.”

    – John W. Robbins, “The Growth of Government in the United States

The thesis underlying this series of posts and reflected in the series’ titles, is that the 2008 financial crisis never really went away. Yes, the stock market has recovered and gone on to hit new highs. Yes, we don’t see massive layoffs taking place or people standing in bread lines. So the visual cues that we expect in a financial crisis are not present.

Further, we see announcements in the press stating how strong the American economy is, and various statistics are brought forth to prove this, perhaps most notably a low unemployment rate.

Donald Trump has been very aggressive at touting the strength of the American economy. The day after the worst stock market plunge of 2019, the President tweeted, “The United States is now, by far, the Biggest, Strongest and Most Powerful Economy in the World, it is not even close! As other falter, we will only get stronger. Consumers are in the best shape ever, plenty of cash. Business Optimism is at an All Time High!”

Now at least some of this is likely true. Objectively speaking, America has the world’s largest economy as measured by Gross Domestic Product (GDP). But there are reasons to doubt some of the President’s other claims.

For example, while the President says that consumers are in the best shape ever, the very next day CNBC ran a story announcing that Americans are more indebted than ever before. This hardly supports the President’s claim that consumers are in the best shape ever.

And if the economy is doing so well, why, according to the Bureau of Labor Statistics, has the labor force participation rate never recovered to the pre-crisis level?

If everything is so great, why has President Trump publicly called for more Quantitative Easing (QE) and interest rate cuts? QE is a radical money printing scheme which was used by the Federal Reserve as an emergency measure to save the financial system in the 2008 crisis. Since QE is an emergency measure that was used to stave off financial collapse, why is it that, on the one hand, President Trump is telling us that the economy is doing great under his leadership, but, on the other hand, is calling for emergency QE as if the financial system were collapsing again?

Another item contradicting the official narrative that everything is awesome with the economy is the calls for interest rate cuts. In the link above, Trump was calling for the Fed to lower interest rates. In a strong economy, demand for money is reflected in rising, not falling, interest rates. If the President is calling for the Fed to lower interest rates, by implication, he is saying the economy is stalling out, not charging ahead.

In the opinion of this writer, the struggles of ordinary Americans to find work and to make ends meet are reflective of a financial system in disarray, not one experiencing rapid growth.

Further, it is my view that the economic problems roiling America stem from the fact the American government and financial elite have refused for more than a decade now to deal honestly with the serious financial crisis facing the United States. At the root of the problem is the Fed, America’s central bank. Central banking is inherently immoral, unchristian, and destructive of the legitimate interests of the great bulk of the American people.

One of the great evils that flows from central banking is another great plague of modern society: Big Government.

In the quote at the top of this page, John Robbins noted that Gordon Clark thought that the growth of government in the United States was the greatest tragedy of the twentieth century. Considering all the evils of that century, Clark’s statement is remarkable indeed.

It is the contention of this author that America is going bankrupt as a result of big government, a great evil which itself is the child of the prior great evil of central banking. Yet there is no serious attempt on the part of elected officials of either party to address this situation.

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Financial CrisisTrump touts ‘strongest economy in the world’ after disappointing jobs report,” ran a recent headline that managed to capture both the official line of the Trump administration and the contrasting reality portrayed by many recent underlying economic data points.

The February 2019 jobs report, released in early March, was expected to show a gain of 190,000 jobs, but instead reflected a gain of only 20,000. That’s a big miss in anybody’s book.

Now one could argue that President Trump’s statement is not negated by the disappointing jobs report. The US could indeed have the strongest economy in the world – depending on how one defines “strong” – and still do a face plant when it comes to the production of new jobs. All that is required for these two ideas to be true at the same time is for the rest of the world to be in a bigger mess than the US.

It is the contention, however, of this author that, in spite of all the talk of a booming economy coming from the Administration and from various sources on Wall Street and in the media, the US economy is not doing well and, in fact, is very likely headed into recession. It may actually be in recession as of this writing. Below are thirteen reasons why this author thinks so.

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2019 year in review

Better late than never, or so goes the old saying. I’d hoped to get this 2018 wrap up posted last week but, as usual, my ambition was greater than my reach. But late or not, it still seems good to me to take a little time and reflect on the year in blogging that was as well as to look ahead to 2019.

As always, I’d like to give a big thank you to my readers and commenters. It has been my prayer that you’ve found the work on this blog edifying in your Christian walk. We live in an age where it seems that almost everything is fake. But the words of Jesus Christ and the words of all Scripture are as real and true today as when they first were written down so long ago. It has been my endeavor to apply those words to the events of our own time, not only to help readers see the world through the lens of Scripture, but also to encourage.

Sometimes it can seem as if our problems are such that no one in any previous age ever saw their like. And yet as the Apostle Paul wrote, “No temptation has overtaken you except such as is common to man.” Yes, it’s true that we face a world of problems, but God has not left us in darkness without hope in the world.

If there is one idea that I hope to impart to readers of this blog, it’s this: No matter how great the struggles we face in our personal lives, no matter how great the crises we face as a nation, the Word of God makes us complete and thoroughly equipped to address them. As Gordon Clark and John Robbins rightly taught, the 66 books of the Bible have a systematic monopoly on truth. Further, it is the ignorance, perhaps even knowing rejection, of this simple idea that had led the formerly Christian West to the brink of disaster.

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FNN-Fake-News-Network-900While reflecting on the big story this past week, the name Mike Tyson came to mind. Now that’s a name you probably didn’t expect to see, but go with me on this one.

From those under the age of 40 or so, I suppose the name Mike Tyson evokes more snickers than anything else. But trust me, it wasn’t always so.

Tyson took the boxing world by storm back in 1985. Tyson didn’t just win fights, he didn’t just knock guys down. He didn’t settle for mere knockouts either. No, Tyson devastated his opponents. Quite simply, I’ve never seen anyone hit harder or attack more ferociously than Tyson in his prime.

By the age of twenty, Tyson was the heavy weight champion of the world.

So why do I bring up Iron Mike? Because this week James O’Keefe of Project Veritas delivered what amounted to a journalistic version of a Tyson uppercut to CNN.

In the segments released so far, O’Keefe’s exposé has caught a CNN producer admitting that the whole Trump-Russian collusion meme is a bunch of hooey (the producer used a different word) and that the only reason CNN spent so much time on it is that it’s good for ratings. CNN anchor Van Jones was caught on tape admitting the much the same thing, that the Russian collusion story is nonsense (he used a different word, too).

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david-stockman

David Stockman

This time last week it was 75 degrees and sunny. Today? Well, let’s just icy roads and accidents made the morning commute a little more exciting than usual. How can the weather change so much in seven days?!

 

Well at least one thing hasn’t changed over the last week, and that’s the dicey state of the nation’s economy. With the stock market hitting records level, that may seem like an odd thing to say. But the economy is not the same things as the stock market.

In fact, the past several years have seen an almost inverse relationship take hold between the performance of the Dow Jones and S&P indices and important economic indicators. In a normal, rational economy, if corporate earnings decline or unemployment spikes signaling a economic slowdown, the stock market should decline.

But in today’s Keynesian casino markets, bad economic news is good news from the markets perspective. Why is this? It all has to do with the Federal Reserve’s interest rate policy. You see, bad economic news means big money speculators believe the Fed will continue its policy of suppressing interest rates to near zero to stimulate economic growth. On the other hand, if the economy appears to be doing well, the market starts to think the Fed may hike interest rates, making stocks a less attractive opportunity. Thus the stock market goes down.

In short, it’s a stupid economy that rewards fraud and punishes success.

And after over eight years of stupidity such as near zero percent interest rates, we are now faced with simultaneous Fed created bubbles in stocks, bonds and real estate, which will all at some point burst. And that leads me into today’s story…

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