Friday, 20 March 2009

What the Pros Say: US Is Now 'Bankrupt'

Global stocks traded higher, as did the dollar against the euro, Thursday after the Federal Reserve's surprise announcement it would buy $300 billion in US Treasurys in order to help the ailing economy.

But experts tell CNBC they have concerns over the Fed's latest move and that the current national balance sheet is a disaster

The recent rise in the stock price is just due to unwarranted hype. The stock market falls will continue since the US economy is not going to improve anytime soon. More companies will go bankrupt as their profits and sources of finance dry up. There is no fundamental reason why things should magically get better.

Also note that the price of gold remains high meaning hedging vs a weak US dollar and a weak US economy remains strong.

[Posted at the SpookyWeather blog, March 20th, 2009.]


steven andresen said...

That the country is bankrupt seems to me to have been obvious for awhile.

One question is what one should do about it.

Some argue you have to borrow money and give it to people so they can buy necessities right now so they don't starve.

Others point out that you can't keep borrowing money without having the ability to pay it back.

I think both positions are correct.

The problem with Obama's plan is that there is nothing that he's done that will create jobs in the long run in a broader part of the population than just construction and road workers.

And, he's done nothing to change the oversight and other laws to prevent the same thievery from happening again.

Fixing the executive bonus money problem won't fix any of the problems that got us into this mess.

SpookyPunkos said...

I agree.

I like to post repeated stories on the condition of the US economy, even though it may seem obvious, so that any new reader will catch the headline and realise just how much worse the situation is than reported in the mainstream media.

It is good to note that CNBC is at last reporting on the bankrupt nature of the economy when others had been warning, for a long time, about the dangers of excessive debt and leveraged financing.