Wednesday, December 03, 2014

Recent encouraging events…

What could possibly go wrong?

It is the season of the year to turn our thoughts from the discouraging events that have occurred throughout the year and focus on some of the positive and encouraging happenings that have recently taken place.

Here is a listing of some of them, along with an open-minded, realistic assessment of how truly “encouraging” these event might really be.

The election: 

Republicans won the Senate.  Whew.  Allelujah!  Finally we can reverse Obamacare, secure our borders, reunite with our allies, pay off the national debt, become energy independent and admit Islam is an evil subversive political ideology.

The reality:   Look at what the Republican House is doing now:  promoting amnesty legislation.  Look at what Romney just said:  “We have to swallow hard” to pass amnesty legislation.  Even when the newly minted republican majority convenes, they cannot overcome either a presidential veto or a senate filibuster.  The choices will be either government gridlock or compromise which is most likely to favor more illegal immigrants, more government spending, more debt, and no oil pipeline and no energy independence. 

Here are a few current Drudge Report headlines on immigration:

SESSIONS: Republicans On Verge Of Breaking Campaign Promises...
LEFT MOCKS: 'War' on Obama's immigration order lasted about 5 minutes...
'Symbolic' Vote on Amnesty...
Gutiérrez presses 'millions' to get documents ready...
Mayors plan summit to implement...
Guatemala paper reports Obama decree has increased illegal immigration to USA...

The result:  Expect more talk but don’t expect very much change.

The Ferguson Grand Jury decision:

No charges were brought against officer Wilson of the Ferguson PD.  Yippee.  Justice is served.

The Reality:  The President invites thugs, rioters and mob members to the White House to discuss the implication of Ferguson.  The media and our federal government continue to distrust and disparage our legal system, rule of law, results of the Ferguson Grand Jury and police departments nationwide.  The punks, racists, and hoodlums are being coddled and celebrated.

The result:  Expect a further breakdown of civility in our cities.

Gas prices:

Gas prices are down to around $2.60 from a high close to $4.00 in the past year.  That is a result of an oversupply due in most part to our burgeoning shale oil industry.  Yippee.  We’re turning the corner on energy independence.

The reality:  Prices are lower because of reduced demand and increased supply.  Demand is lower because of less consumption due to recessions in a number of nations.  Supply remains high because Saudi Arabia does not want to lose market share.  So they are purposely pumping at a steady rate to create an oversupply that lowers prices to a point that will destroy the profitability of our shale industry.  They will do everything in their power to discourage the US from becoming energy independent. 

The result:  Unless the profitability of the US shale oil industry is maintained by subsidizing the difference between the market price and cost of production plus a reasonable profit, that industry will wither and die.

Stock prices:

Stock prices are at record highs.  Things are looking good.

The reality:  Stock prices are at record highs because interest rates are at record lows.  This is a temporary condition that is impossible to perpetuate for two reasons:  The price to earnings ratios do not support the current stock prices and the US dollar cannot long survive record low interest rates.  In fact, the pattern of the market of the past several months is mimicking the pattern leading up to the collapse of 2008.

The result:  Look for a significant collapse of the stock market within the next year.

Unemployment rate:

The unemployment rate is down to below 6% from a high of near 10%.  Wow!  This is great!

The reality:  The Labor Force Participation rate is at its lowest level since 1978.  Most new jobs are part time and lower paying.

cotd lfpr

The result:  “Despite monthly job growth that has surged well over 200,000 this year [mostly part time/low wage jobs], average annual wage gains remain stuck at 2% — barely enough to keep pace with inflation. Employers' failure to provide bigger raises has crimped consumer spending, which makes up 70% of the economy.”

Source:  USA Today

And finally, Google searches for “economic collapse” increased 152% during this past week.

There you have it.  I have successfully turned what appears to be a variety of silk purses into a number of sows ears.  Sorry about that.  But that is reality.

No comments: