Why is This Man Smiling?
It doesn't look good for the US economy, but you wouldn't know it by listening to Fed Chairman Ben Bernanke.
According to a new report released this morning by the National Association of Realtors, the average price of a home dropped 12.5 percent over last year, while August's existing home sales declined for the first time in four months. The dollar, meanwhile, has continued its steep decline in 2009, taking another hit yesterday as the world's 20 largest economies eyed a plan that would weaken the dollar even further and encourage foreign investors to seek other markets.
On top of everything, the Treasury Department's top watchdog for the Troubled Asset Relief Program told the Senate Banking Committee today that not only will the government not recoup its bank bailout money, that money "may never fulfill certain policy goals."
Economist Steve Blitz, of Pangea Market Advisory, is calling the Fed a "true believer" in wake of today's statement. Conservative financial advisor Peter Schiff, who is running for Senate next year in Connecticut, says Bernanke has "once again gotten it wrong."
"If the Fed really thought the economy was sound, why does he have it on life support?" Schiff said. "If he pulls the plug, our sick economy is going to die."
An absence of bank credit growth, a nascent housing recovery and fears that a global overhaul could weaken the dollar even further aren't supporting Bernanke's outlook, and Wall Street apparently saw through his attempt to drive stock prices higher by saying the economy was recovering rather than leveling off.
Bernanke, it appears, is drinking from President Barack Obama's Kool-Aid container. They both seem to believe that by merely saying things are improving, things will actually improve. There is no question that Bernanke knows what's going on.
As for Obama, he is simply spread way too thin to effectively address the economy right now. His desperation for health care reform reached its zenith this weekend as he paraded from one TV talk-show to another in an attempt to Jedi-mind-trick the public into jumping on board with it. At the same time, he has apromised to forge ahead with immigration reform, and his environmental agenda is in full swing, as well.
The president's sole focus right now is the security of the liberal agenda, as his recent interference with New York politics plainly exhibits. Until Obama puts the welfare of his country before the welfare of his party, the US economy will continue to flounder ... regardless of the image he and his minions try to portray.
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