Politics, Europe and your money

Hi Gang,

It’s the Saturday after Thanksgiving and most of the shopping insanity has happened. Largely the situation is rapidly approaching normal as the pre-Christmas season gets.

Everyone is busy with being busy.

Mostly no one is watching what is going on in the world, but it is getting ugly out there. I can’t believe that no one is paying attention. I am beginning to understand how Hitler began to consolidate power.

Europe is in big trouble. The southern countries are heavily socialist and have been quietly using the strength and productivity of the northern countries to sell debt at favorable rates and with the cover of a strong common currency. This may not stand. Remember, the Euro (currency) has only existed since January 1, 1999, only a dozen years. It was envisioned as a stepping to stone to a United Europe, similar to the USA and USSR. The latter, I remind you collapsed in 1991, only 20 years ago. The Political Union of Europe didn’t come to pass and the financial Union is under severe strain. It, too, may collapse. Why we think our Union will survive without care and attention is beyond me.

Currently we are a leaderless country, not in appearance but in reality. Barrack Obama has failed to lead the country, or more importantly the Congress toward improving the American experience. Most people ask themselves the same question every four years before they vote. “Am I better off now than I was four years ago”? Based on what I hear and see, yes including the ‘Occupy’ movement, I would venture that most people would say NO. Is it President Obama’s fault? Yes… and no. He made some rookie miss-steps. He trusted Nancy Pelosi too much and she was the leader of a part of Congress with an approval rating in the single digits. Really not the place to build upon. She pushed a liberal agenda and forced it through creating a lot of the hate and discontent now evident in Congress.

Since then, and even since the midterm election, she remains, along with Harry Reid, committed to protecting the well-intentioned but poorly written health care program. Rather than to admit that the plan is severely flawed, they have granted waivers to a large number of corporations and special interest groups, including themselves. Really if it’s that good, why is everyone (except Joe lunchbox) trying like crazy to get a waiver? And if it’s so good, why are they getting those sought after waivers?

Occupy should change its chant to throw the bums out. Maybe if we elect an entirely new Congress and Administrative leader in the White House, we get started making some real progress. We need a real pay-go rule. If you want it, you must fund it. No hanky-panky. If it applies to American citizens it must apply to members of Congress exactly the same. Social Security, Medicare, all of it.

Before you declare me ill informed, I know that not everyone is up for election at the same time. But in a four year cycle, we could have the opportunity to make meaningful changes in the makeup of Congress and its sense of mission.

The people I talk to around Washington have a smug, nothing is going to change attitude. They are in control and they will not permit real change. That is the attitude and perhaps they are right.

Military budget cuts may come, but watch where they hit. It won’t be the big military vendor machine. It won’t be the power brokers; it will be cuts that hurt the soldier. Less support for their families, retirement, health care. All the things we, regular Americans, think these people who sacrifice so much for us should get. These are the things that will quietly be taken away. Not one big military supplier will get damaged. Just watch, see if I’m wrong. I hope I am, but I’m betting I’m not.

Oh, and one other consideration, when the soldiers support programs are cut, what happens to the concept of an all-volunteer military? And what happens if the manpower volunteering isn’t sufficient to maintain critical size? Well, I believe we’ll be back to my childhood days of every man (today in the interest of equality perhaps everyone) over age 18 will be eligible for the draft. Forced to serve two to four years. Failure to report punishable by prison... military prison.

Moneywise, if Europe has a major default, and the odds are arguable but substantial, the fallout in the banking system there and here will be as bad, maybe worse, than 2008-2009. Are you ready for that again? It may well be time to be putting money, gold or other valuables away to tide you over. It could crush the housing market if you can believe that. If no lending is available the economic rebound we have seen in car sales and other big ticket items could stop. Unemployment could jump up again. This time well over 10%.

It is said that those who fail to learn from history are doomed to repeat it. Did you learn anything from 2008-2009? Will you be prepared if it happens again? Do you believe the government has any cards left to play if it does?

IF we have to borrow more, will the oil rich Russians, the expanding economy of China and the cash of the Arab world force us into a beggar nation? President Reagan spent a lot of money on Space and expensive weaponry and basically won the Cold War by forcing the USSR into economic disaster trying to keep up. That was in 1988. By 1991 the USSR collapsed. Today the shoe may well be on the other foot. We no longer have a significant space program, the Russians do, as do the Chinese. We are borrowing Trillions of dollars from others to pay our bills. How hard would it be for the Russians and Chinese to bury us making us try to keep up?

Mr. Putin is a smart man. He knows exactly what he is doing. He has control of the political situation in Russia and can lead from power both at home and in the world at large. The Chinese, on the other hand, are about to go through a government in transition and like much of the changes in the Arab world, we have no idea where that will end up.

On that same note, how chaotic was Europe in the 1930's when Adolf Hitler rose to power? What shape was the USA in? Oh, right we were in the Great Depression. Eerily familiar?

We need a leader who will tell the truth, who can lead people, who is willing to be held accountable and who will hold others accountable for results. Unfortunately I don’t see that person on either side of the aisle today. Maybe by the next election cycle someone will rise to the top like cream, but by then it may be too late if the American voter doesn’t get serious and get involved, informed and active.

I won’t bet against the United States but I’m not a lemming either. I am concerned, you should be too.