More happy talk from Bill Gross: “The standard of living in the US is likely to go down with the dollar, as “we’ve spent too much” over the past 20 years…

Well that is what MiM has been saying, that our standards of living will go back to the 70s under this economic policy! Ugh! Are you ready for your Carter on steroids malaise?

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CNBC:

(…) “The new normal basically recognizes that we’re in an economy that’s de-levering and that we’ll move to an average level that’s lower than before,” he said. “We’re de-levering, loans are going to be less available…homeowners are going to have to put 20 percent down now, as opposed to zero.”The standard of living in the US is likely to go down with the dollar, as “we’ve spent too much” over the past 20 years, according to Gross.

The government likes the weaker dollar, despite the support for a strong currency it shows publicly, and other protectionist tendencies are visible. “Let’s face it, a lower dollar is basically a protectionist barrier,” he said.The Federal Reserve is likely to keep rates at the same level for a while, because the economy would need to grow by nominal rates of 4 percent or 5 percent to prevent debt from destroying growth, he said. “They (the Fed) have to stay low because the embedded cost of debt in the economy is 67 percent,” said Gross.

The bill to reform the financial sector is worrying, because it looks like politics will have a greater say in capital markets, he warned.

“To the extent that some powers were taken from the Fed and given to the Treasury and other bodies… you have a market that becomes more political, that’s a danger,” Gross told CNBC.

That is the other TERRIFYING shoe to drop, if TOTUS reappointed Gentle Ben with some ‘understanding’ and since TOTUS gets to appoint 2 more FED Govs, if the FED does NOT TIGHTEN soon enough, how the hexx can we NOT have hyperinflation? The big wigs say inflation is too many dollars chasing too few goods and inflation shows up in wages, but if the dollar is plummeting and the Fed does not withdraw liquidity, that IS too many dollars worth not enough chasing too few goods, so how can we NOT have hyperinflation? Commodities are pegged to the dollar, so when it goes down Oil and Ag prices go up, thus consumer prices go up, that is INFLATION!!!!

October 28, 2009. Tags: , , , , , , , , , , , , , , . Economy, Finance, Housing, Obama Administration, Politics, Unemployment Statistics, Wall St.

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