Okay; the financial markets have had better days. I haven’t heard of any one jumping out of a window yet but the rumor is spreading fast that America is heading for a recession. Nasty word recession; especially if everyone you meet has a different definition for it. Couple to that, the ugly word of inflation and before you know it, financiers around the world are running into the streets yelling, “The sky is falling, the sky is falling!”
As of late we have seen global markets buoy on the good news that in India a company raised one billion dollars in less than a minute for a power company and only days later sink in despair because American Bankers pulled off the biggest fraud in history by lending billions to people who couldn’t afford to pay them back! The rush to lend was so great that it appears half the banks in the world got in on the action. Reports of Banks from Germany to Japan posting losses because of the Americas sub-prime debacle have filled headlines in newspapers the world over. Lest we forget every one of those loans charged points, and points as we know it are the way Banks make money on loans up front; icing on the cake. Well now the cake has turned out to be fruit cake! Some stuff in there, no one likes!
Of course not to worry our President and his newly formed posse’ of Capitol Hill Wranglers is coming to the rescue. Initial reports show they are planning to inject the economy booster upper, directly where it can help them the most; your wallet. Plans call for them to borrow – oops, did I say borrow? I meant to say, prestidigitate with slight of hand anywhere from eight hundred to sixteen hundred dollars into your pocket. They will raise these funds by selling magic dust and I told you so’s! Needless to say imaginations are running wild all across America as to what we will do with this new found wealth.
The boring and mundane of course will by bread, milk and eggs; some will invest it, while others will take a deep breath and pay a bill or two. Like their health insurance ! Most American paid roughly $12,100 dollars last year for health care. Another idea; pay the next two months of your gas or electric bills. Costs have risen in the last few months due to higher energy transportation costs. Not only are we paying more at the pumps in taxes and for product, creation and exploration but now we are paying to have it delivered.
Bottom line; in the long run one can best sum this, “injection” up as, too little to late. No ones house is going to be saved or bankruptcy postponed; at least not for long. What good the money will do the economy is pretty hard to say unless we all go out and try to buy the same refrigerator? But what is actually going to happen is that the present administration will get something they have wanted for a long time. The tax cuts that they gave to the richest of Americans are going to find their way to the bargaining table. Watch for a last minute deal to be signed approving the permanency of those tax cuts as you sit there paying three fifty for gas! Don’t be surprised when you hear the news announcer on the radio make light of the fact that although we all got a check, we all still had to pay taxes on it ! At least some of us will…..