Lori's Latest: What is BO smoking???

It seems these stories finally start to emerge after the damage is done. Did you realize the White House "Prediction" (what is he a fortune teller?) of $9.05 Trillion is based on the ASSumptions of a brisk economy for ten years? What is he smoking? According to Pimco (Allianz) we are looking at a sorry state of affairs for 10 to 20 years. I am sure he is being optimistic on that since it is in a report to investors.

"Well, the surprise is that there’s been a significant break in that growth pattern, because of delevering, deglobalization, and reregulation.

All of those three in combination, to us at PIMCO, means that if you are a child of the bull market, it’s time to grow up and become a chastened adult; it’s time to recognize that things have changed and that they will continue to change for the next – yes, the next 10 years and maybe even the next 20 years. We are heading into what we call the New Normal, which is a period of time in which economies grow very slowly as opposed to growing like weeds, the way children do; in which profits are relatively static; in which the government plays a significant role in terms of deficits and reregulation and control of the economy; in which the consumer stops shopping until he drops and begins, as they do in Japan (to be a little ghoulish), starts saving to the grave."

It is not as if Pimco is at odds with the obama administration either...

"1) Global policy rates will remain low for extended periods of time.

2) The extent and duration of quantitative easing, term financing and fiscal stimulation efforts are keys to future investment returns across a multitude of asset categories, both domestically and globally.

3) Investors should continue to anticipate and, if necessary, shake hands with government policies, utilizing leverage and/or guarantees to their benefit.

4) Asia and Asian-connected economies (Australia, Brazil) will dominate future global growth.

5) The dollar is vulnerable on a long-term basis."

The administration predicts that while GDP--a measure of all goods and services produced in the economy--will shrink 2.8 percent this year, it will begin growing again sharply by 2011, reaching 4.3 percent by 2012 before leveling out at around three percent through 2019.

However, data from the federal Bureau of Economic Analysis (BEA) suggest that this may not turn out to be the case. While the economy typically rebounds after a recession, it rarely maintains that higher level of growth.

Gary North- Deficits WILL Matter

The Office of Management and Budget has released its annual mid-session review that updates the budget projections from this past May. They show that this year, Washington will spend $30,958 per household, tax $17,576 per household, and borrow $13,392 per household.

Think about that. For every American household – about a hundred million – the Federal government will spend $31,000.

Wait a minute. The typical American household makes about $46,000 a year. Are we to believe that the Federal government will spend, in the name of the American people, $31,000 per household? That each household will be taxed – income taxes, Social Security taxes, corporate taxes, etc. – $17,000? That is what the figures say. Dividing $46,000 by $17,000 is 37%. Can that be possible? Add to this another $13,000 in debt. That is what the government's statistics report. Anyone who thinks an extra $13,000 in household debt doesn't matter is living in la-la land. This includes economists.

I am thinking he is back on the Cocaine I wouldn't think that someone smoking a little Mary Jane would be as far gone.