fuTuRe sHOcK

Ilargi
The Automatic Earth
“There ain’t no cure”
I know that whatever hope a new administration may evoke in the hearts and minds of Americans and people across the globe, one thing still stands. There is an untold number of trillions of dollars that needs to be sucked and wiped out of the global economic systems. These are toxic trillions. Toxic, as in: the longer they are permitted to remain within the body ‘financic’ and the body ‘politic’, the more damage they will cause.

Millions upon millions of jobs will be lost in the US alone within the next 12 months. Obama’s task will not, because it can not, be to lead his nation back into prosperous times. Certainly not before 2012, but in all likelihood not even within our lifetimes. If he wishes to prove himself to be a true leader, his mission will be to soothe the pain, to stem the bleeding, to minimize the suffering of the herd, and most of all to stop the lying and cheating that has come to define the nation, at the latest ever since Greenspan took over the Fed in 1987.

That is a role which is 1000 times harder than leading a people into prosperity. But there are no alternatives available: no-one can turn this economy around, not before it’s run its course, not until all the losses have been absorbed and many souls have perished as a result.

There will be enormous pressure on the new president to follow the path set by the IMF and the World Bank, whose solution has always been to live off the misery of people in far away corners of the planet. We can but hope that Obama has the guts to shut off access to that path. But I’m not sure of that by any means: it has been the American modus operandi for far too many years.

I see a bank merger in England, between Lloyd’s and HBOS, in which $27 billion needs to be raised in order to cut 20.000 jobs. Is that crazy or what? Moreover, the numbers pertaining to the US deficits are starting to boggle even my feeble brain. I saw yesterday how the Bush administration is being complimented on its preparations for the transition to a new government come January. And I’m thinking how I can totally imagine why they would want to transfer responsibility for all that’s in the pipeline before January 20, as soon as they can.

As soon as there’s a new president, they’ll wash their hands. However, not before they’ve run the deficit into the stratosphere. I doubt that many people still have the stomach, in the face of all the losses so far recorded, to think about what it means for the US government to borrow $2-$3 trillion in one single year, 2009. Until now, there’s never been a deficit larger than $1 trillion, not even close actually.

The new president will be left with a legacy of last-minute, legally binding, Bush, DIck and Colon commitments that will not only cause immeasurable grief on the streets of America, it will simultaneously hammer, pound and pulverize the status and value of US Treasury bonds, making it exponentially increasingly hard to finance what is needed just to keep day-to-day operations running. Treasuries are the last game left, and they too are a game that is over.

The markets will be up for a bit, hard to say for how long, but after that they will plunge in a way not seen since the 1720 South Sea Bubble. And Obama won’t be able to do anything, provided he would want to, except hold the hands of those who are drawing their last breath. He won’t be able to heal his people, or cure what is ailing the nation’s economy.

There ain’t no cure. More

Tags: America, HBOS, Lloyd’s, obama, united-states, US