Decrease Odds of Robert Weidemer (Aftershock author) Economic Collapse Prediction
Trade Deficit takes 3% of our GDP:
Imagine how much more 3% GDP would enhance our economy – growing at 5% annually instead of 2%. Almost this entire 3% gap equates to imported energy and trade gap with China. We must encourage our national leaders to allow drilling for newly found vast sources of oil and natural gas.
in past few years to our pleasant surprise we lean we have new oil reserves for at least 40 years and natural gas for at least 100. We are not touching that. If we would develop that and use it internally our trade deficit would decrease tremendously. We also must aggressively persuade China from manipulating their yuan and pirating our software leading to huge $300 billion trade gap with them.
Tariffs and import controls? Only in extreme situations and our China trade deficit is extreme. China does not play fair and pirates our software products. So they get some of our products for free; hence – yes we slap tariffs until they play fair.
Remember that every dollar the Government wastes is a dollar the much more productive private sector looses out on. And it is the private sector that largely creates self sustaining jobs that also create ancillary and new jobs (and increased Treasury revenues).
Eliminate HUD, Energy , Education Depts + more …
HUD mandated 55% of all Fannie and Freddie finances handle substandard mortgages. HUD contributed to mentality to loan to many at zero % down, seriously damaging the housing market. Where is the ROI? Energy Dept ever since its beginning in 1979 has done nothing to increase our dependence on foreign oil and lately has squandered over $10 billion in attempts to jumpstart alternative energy – ventures no private investor would touch because most private investors understand how to evaluate potential of investments. Ahhh – successful venture capitalists like Mitt.
Also imagine if Bain Capital would run the federal government. Entire useless departments such as Energy, HUD, and Education (sorry a local responsibility) would be eliminated. HUD and Education together total $155 billion per year. Money loosing Post Office and Amtrak would be sold. Freddie and Fannie Mae would be privatized. Pipelines would be built while energy from algae would be laughed out of the boardroom. High-speed trains to nowhere would not be funded. Money wasted on electric cars that catch fire would be shifted to research on shale oil extraction technology. In sum then to better ensure critical services receive the priority they should, continue persuading our Governor to continue on the path he has set and vote for a most successful venture capitalist for President instead of a radical community organizer over his head. Yes – Mitt Romney, in 14 years turned a $37 million investment into $66 billion and created over 100,000 jobs with a 70% success rate on his investments.
Near Future Perspectives (1-2 years out or less):
Our Treasury rates remain low because the dollar right now is safe haven (at least in minds of most investors) due to Europe’s woes. Eventually Europe will have a solution or one will be imposed on most of Europe (ex: Germany + IMF) – 1 to 2 years, maybe in months. This solution will likely decrease the standard of living substantially in Europe except Germany, Sweden Switzerland. Then the attention will focus on the US. Dollar will no longer be safe haven. Interest rates will rise; Fed will print more, inflation will increase well over 10%. If our debt reaches 120% of GDP (close to 105% right now), US dollar may collapse and bring upon the end game Weidemer envisions. Hence it is critical we act now to decrease our trade deficit, government debt, and grow our economy much more strongly.
*** Expect more on this blog regarding Robert Weidemer’s Aftershock and his current up-to-date economic perspectives. And if you live in New Jersey, and I am able to access an appropriate forum I will then conduct an in depth analysis of the core of Weidemer’s analyses and apply that to our current economic status. Expect specific recommendations to fix our economy – some of which are listed here and in other parts of my blog. Please advise of your interest.
Ted Hruzd, ‘Economics501’
June 10, 2012