The End of the Recession as We Know It
Next comes the depression—and I feel fine. Want to know why?
By Robert Morley
When you look at economic news, is it hard to tell what the reality is—what is real and what isn’t?
Recovery, you say? What recovery? Two of my friends are out of work, Grandma is on food stamps, and my job is on a razor’s edge.
But that’s not what the “official” numbers reflect. The bailout saved us.
Faced with economic collapse, the feds did the only thing they knew how. They pulled out the checkbook and went to town doling out taxpayer dollars. It was perhaps the biggest gamble of all time—$12 trillion worth. But did it work?
The little ball is still bouncing from red to black. Where will it land?
Economists, gamblers, climatologists: They are all one and the same. Inflation? Deflation? Recovery? No recovery? Nobody really knows for sure. Food prices up. House prices down. Oil? Up and down. Gold? Soaring.
The only thing certain is that uncertainties are multiplying. And that never before have so many Americans been unemployed. One in 10 can’t find work according to the government’s “official” count—but the real rate is one in six, some say one in five!
Yet there is good news! The latest government report indicates that the economy added 431,000 new jobs last month. Maybe all the stimulus money is starting to pay off after all.
But what does the report actually say? It says the little roulette ball just landed on green. We all lose.
Of the 431,000 jobs the economy supposedly created, 411,000 were temporary workers hired by the federal government to conduct the 2010 Census. The real economy only generated 20,000 jobs.
We borrow trillions in stimulus money from Asia or create it out of thin air—with the consequences to be dealt with later—and all the economy can manage to create is an amount of jobs equivalent to a rounding error. Now those trillions have to be paid back.
If government employment is the answer, why didn’t economists think of this rock-solid solution long ago? Instead of paying hundreds of thousands of people to go door to door collecting data on its citizens, why doesn’t it employ millions? Better yet, the government could hire people to wash dirt off rocks all over the country—why only on Louisiana beaches? America could have full employment!
If only it were so easy.
The problem is that America has passed the financial point of no return. This country has reached debt-saturation.
When the government spends money, the gross domestic product (gdp) goes up. That is why politicians love to spend. It makes it look like the economy is growing. But you can only build so many bridges to nowhere before you start paying the price.
Every time the government hires an additional employee, it must find money to pay the salary—usually by borrowing. Each dollar borrowed incurs additional cost that has to be repaid after accounting for next year’s salary, health-care benefits, pensions, etc. And it is not as if government employees produce lots of wealth. These jobs that are created don’t pay for themselves.
So while government spending, gdp and political egos go up, the real economy goes down to pay for it all.
Last week, the stock market rallied on the news that top Wall Street banks like Morgan Stanley, Bank of America and JP Morgan made a cool $51 billion in pretax income in 2009. The recession must be over!
How did they do it as 1.5 million Americans concurrently went bankrupt and millions more lost jobs and defaulted on their mortgages?
Two factors made the big banks incredibly profitable last year, according to Forbes. The first—you probably guessed it—was government largesse. How can you not make money when the government literally gives it to you? America’s biggest banks are allowed to borrow money from the Federal Reserve (which creates the money out of nothing) at close to zero percent. These banks then turned around and lent the money to the United States government for up to 4 or 5 percent and pocketed the difference. Don’t you wish you could be a big bank?
The second factor making the banks so profitable is that apparently they are near perfect stock market traders. In fact, several banks are so good that they go for months at a time without a single daily loss. In May, Goldman Sachs and JP Morgan reported that they recorded trading profits on every single day during the first quarter of this year!
Drilling beneath the headlines, you find an astounding fact. As America’s top six banks were raking in the chips—the next 980 banks in aggregate lost money.
No wonder the Federal Deposit Insurance Corp’s list of banks on the verge of failure has grown to 775—up from around 700 at the beginning of the year.
The big banks with Washington connections are living it up, but America’s smaller banks are dying. And as the small banks are left to collapse, who picks up the pieces? The big banks—the same ones that blackmailed taxpayers to bail them out lest financial Armageddon arrive.
How is that for an unforeseen side effect?
Yet, as America heads from recession into depression there is reason for hope.
Eventually all the corruption and greed will be wiped out. America’s great collapse will ultimately be positive because it will allow for a new economic foundation built on solid fundamentals.
Look forward to a time with no Federal Reserve, no corrupt fiat currency, no national debt, no bought-and-paid-for politicians, and greatly increased prosperity for our children. The book, The Wonderful World Tomorrow—What It Will Be Like by Herbert W. Armstrong describes in detail how this revolution will be brought about. Here is a teaser:
Utopia? Why not. Why should it be an imaginary or impossible pipe dream? There is a cause for today’s world chaos and threat of human extinction. That cause will be supplanted by that which will bring a utopia that is real, that is successfully functioning!
Why today’s world evils? How will they be ended? What will cause this world to erupt into peace, and plenty? How will such incredible changeover be brought about?
And what will this World Tomorrow be like? How will it be governed? Who will rule?
You are going to take a sober look at the conditions, facts, causes and trends in today’s sick, sick world.
You are going to read what world leaders, scientists, technologists and educators say about today’s trends, and what they envision for the next decade or two.
And then you will be given a surprising, excited look into what is certain in the transformed World Tomorrow, what really is ahead—and why.
Today there are three views—two widely held by world leaders. Only one is going to happen. And it’s the best big news ever reported in the history of mankind. What is actually going to be the outcome of all this, for our frenetic, entertainment-crazed, gadget-buying, yet chaotic, divided and sick world, is something totally unseen by statesmen, scientists, educators and world leaders. …
[T]he peaceful, happy, joyful World Tomorrow.
That’s why I feel fine—despite the coming depression. The “end of the recession” really is almost here—and for good. •