O the wild charge they made!
All the world wondered.
Honor the charge they made,
Honor the Light Brigade,
Noble six hundred.
Charge of the Light Brigade
Alfred Tennyson, 1870
Today the Department of Treasury is sending out its economic stimulus checks to the US taxpayers. Each taxpayer will receive a tax rebate of $600 with additional amounts of $300 paid for each household dependent.
As a taxpayer I welcome the small relief from the burden of excessive taxation. As a business owner, I welcome the infusion of money into the economy with the hope that some of the dollars will find themselves into our corporate coffers. Though many deride the amount as just a small token, (after all what can one do with $600?) when viewed in the aggregate we are taking about a major cash infusion into the slowing US economy.
Sounds great but these types of financial gymnastics of our “managed economy” can in the long run produce some ill effects that will prolong and deepen economic malaise that we are all looking to avoid at any cost. In classic economics, pumping money into an economy is highly inflationary. Lots of money chasing goods drives prices up. This is happening on a global scale. In the case of the US dollar, more dollars in circulation will put additional pressure on the value of the dollar and may drive it lower.
This could be the Treasury Departments objective. The package will help to reset market driven interest rates, stimulate consumer demand at home and make US exports more attractive because of a cheap dollar. This might work but some think the cure is worse then the illness. The fear that the economic stimulus will spark an acceleration of inflation and add to the massive budget deficit of the Federal Government is real. Many critics are suggesting that the stimulus package is borne more from political expediency that does not address the systemic and structural issues that lie at the root of the countries current economic problems like shrinking manufacturing, crumbling infrastructure, wasteful spending, unfunded budgetary commitments and misplaced investment priorities.
So as Americans eagerly wait for the merry mailman to arm them in the current war against recession, General Paulson will be watching to see how his armies perform on the battlefields of the Malls of America.
Sony Hi Def TV’s to the right
Life Good GPS in front of me
Black berries in the rear..
Rode on the $600…
Risk: inflation, behavioral, consumerism, deficit spending, interest rates
As the price of gas hits $3.50 a gallon and sure to climb near $4.00 as the summer driving season gets into full swing, Henry Ford’s and Robert Moses’ worst nightmare is coming to life, American’s can’t drive their cars because they can’t afford to pay for gas.
That’s ok, some will say, American’s can cash their economic stimulus check at the local MSB, hop a plane and head to Europe. But the weak dollar even makes a Tijuana taxi ride just out of the reach of most Gringos so travel to exotic far out places just won’t happen.
The rising price of gas and diesel will tend to keep people closer to their home barbecues. People staying home will hurt the nation’s tourism industry and popular destinations may experience sparse attendance. The tourism and entertainment industry is a major component of our economy (we offshored our manufacturing) so if tourism does take a hit this will stoke recessionary pressures in the economy.
With less American’s traveling abroad America’s cultural and psychological isolation will grow. This isolation compounded by a building resentment toward the foreign oil Cartels and the belief that they continue to hold America hostage by manipulating oil markets is a dangerous combination that may spur mobilization sentiments as the summer of 2008 chugs along.
You Tube Video: The Cadillacs, Speedo
Risk: oil, energy, military, tourism; xenophobia
I love Chinese food. And apparently so do many of my fellow Americans. You can’t walk down a main street in this country or roll into a strip mall without spotting a little Chinese takeout joint.
My favorite is Tommy Cheng’s. I probably stop there about once a week to pick up a takeout order to bring home to my family. I’ll spend about 50 bucks for my order and my family and I look forward to being together enjoying our weekly repast.
Being creatures of habit I usually get the same dishes. And I am growing concerned about rising rice prices and how it will boost the cost of my quart of roast pork fried rice? If the price of rice doubles I’ll have to pay almost $12.00 for my fried rice! OUCH!
Come to think of it, I’m wondering if Tommy Cheng will continue to throw in a quart of white rice with my order of General Tso’s Chicken.
We’ll have to consult the tea leaves on this one.
Risk: Inflation, retail, commodities, entertainment, fast food, small business
You Tube Video: Louis Jordan, Ain’t Nobody Here But Us Chickens
Fears grow over rice supplies the FT Weekend reports on a front page story.
The price of rice has risen 50% in the past two weeks. Speculators and hoarding are fattening the pockets of profiteers and are heightening concerns about political instability and social unrest. Consider the implications of a rice starved Philippines, Thailand and Myanmar or dare we say China? What will be the political impact of an acute rice shortage in North Korea? How will this regime react if it feels it’s not getting sufficient attention and relief from the global community? Will it stoke up its atomic reactors and aim a nuclear missile at the worlds head to hold it hostage until it extorts its fair share from the worlds dwindling rice bowl?
This is a chilling threat to global stability and peace. We submit that the power elites of the new world order need to focus its talents and treasure to address this potential powder keg. As Americans, we would like to suggest to our President Mr. Bush that these types of problems and issues are more worthy of your attention then spending a considerable amount of political capital to maneuver ICBMs into former Warsaw Pact counties.
You Tube Music: The Dragons Backbone
Risk: Political, Economic, Inflation, Commodities