Our Government is finally admitting what seems to surprise only them, that we are in a recession and have been for some time-"Duh"?!
The following is a reposting of a previous entry on this blog originally dated July 11,2008. Read in today's light it seems like a 1,000 years ago and a lot more unsettling....
I just got back from a trip to California, going from Mexico to San Francisco ,and other than the shore line, it is one big brown state. And the smoke, when you see all that dry dessert grass on the mountains, you get an understanding of their fire risk and why that state won't stop burning.
In Mexico I learned two things I didn't know. First California was named by early Mexican natives and it means "hot oven" and second it is a statement of accepted fact there that the US is in a recession. My personal, though admittedly limited, international focus group collection data revealed that our international neighbors throw the fact of our recession around pretty comfortably and seem unaware that our own administration states we aren't in one.
("Oh Amigo, tourism is down due to American recession" ; "The artisans will barter as business is down due to the American recession").Is it important what the rest of the world observes about our economic health? I think so.
But what really got my attention is that Warren Buffet has stated his opinion that by common sense definition we are indeed in a recession. Now that's the straight talk express! Your only as sick as your secrets folks, and its time to review some sad truths.
The British pound is exchanging 1.99 to our US dollar (that a penny shy of two to one!)
The Euro is 1.50 to one US dollar. The Canadian dollar at 1.01 is worth a penny more than us!
Even the Mexican Peso is gaining on us, at 10 cents to the US dollar - its at its highest exchange rate ever.
Oil just hit 150.00 a barrel and we are behind the curve in alternative fuel developement.
Back in 2002 when I was in Europe the Euro was between 90 and 95 cents to an American dollar, the British pound around 1.25-1.30 and the Peso was pennies on the dollar. Currently the Australian dollar, the Japanese Yen, the Swedish Krona, and the Swiss Franc all trending strong.
Here at home the stock market is "correcting" (translation- trending down) and the housing market has birthed a new word-”stagflation” Why?;-Banks and home sales are imploding from loans that should have never been granted and whose legacy was to ”overstimulate” with artificial money, the checks and balances of supply and demand, buyer and seller, that normally drives the housing market which resulted in a bumper crop of overextended homeowners tumbling into foreclosure. A house of cards that has collapsed. Again-Why?-Well… where do I start.? To begin with my financial pundit buddy tells me that since 1985 the US dollar has devalued 48% because our federal reserve has been printing more money out of thin air than all predecessors back to 1913 combined. This means more US dollars chasing less supply. Now this is when the economists jump in and explain why mere mortals don’t understand this isn’t as negative as it sounds. And this is when I filter it through a lens I can understand.
So how did we get here? Ask an Econ Professor, Financial wizard, or CPA and you’ll get macroeconomics, statistical trends, and charts. When you muddle through the dizzying facts you learn there is plenty of bipartisan blame to go around. You learn that like most things stupid, it didn’t happen overnight.
I’m not a financial wizard , but I am fairly well educated, a life long learner, with a doctorate in the school of hard knocks and a PH.D in common sense and my common sense meter is off the chain!
To begin with you can’t just throw money around globally in a big way with unabated bravado and not expect to hit the wall financially sooner or later. We are hemorrhaging money in Iraq to the tune of billions a month. Bush’s Folly is as much an economic nightmare as is the rest of this war.
Add to this the slow drip of money, jobs and resources being taken from our country from outsourcing, unbalanced trade agreements, and unchecked immigration and we are becoming more anemic every day, bleeding from every orifice the life’s blood of our economy. The heart and lungs of our economy are laboring to keep us upright and the strain is getting acute.
Now that gas has hit four bucks a gallon in Central Virginia with no sign of relief,
we need to hunker down and as Bette Davis quiped
"Hold On boys - Its Gonna be a Bumpy Ride"
As far as what to do? Conserve, reevaluate your expenses and portfolio, shop wisely, try not to panic but don't be apathetic,by believing you are helpless. And remember this is a very important election!- VOTE!
Posted by www.EileenDavis.blogspot.com The Davis Report - The Voice of Central Virginia and the Capital City. at 9:58 AM
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