The Seventies Revisited

Apparently, President Barack Obama believes that Jimmy Carter’s leadership style is a model worthy of imitation.  The economy continues to spiral downward with rocketing unemployment numbers and huge deficits and the President is meeting foreign relation problems with Carter diplomacy, which equates to pandering and a loss of security.  The Obama presidency has mirrored several presidencies – Woodrow Wilson’s and Franklin Roosevelt’s to name a couple – but Jimmy Carter’s presidency is the one we will feel the most in the upcoming months.

During Carter’s presidency, interest rates skyrocketed.  Right now, the Federal Reserve has our interest rates parked at nearly zero, but that is about to change.  The rampant printing of currency with no backed value and our increasing debt load has lead countries away from buying our debt and we have been forced to monetize our debt.  The end result is increased interest rates to manage the debt.  And these interest rates will continue to rise as long as government waste continues.  Increased interest rates will affect all Americans as we have to pay more for homes, cars, insurance, etc.

Inflation will rise as well and will increase at such a rate that it will be referred to as hyper-inflation.  This also will affect everyone as groceries staples and big ticket items all rise in price.  The devaluing of the dollar will help lead to this inflation as well and it will not only “cost” more for products, but more dollars will be needed.  In Germany, before Hitler too power, people were literally using wheelbarrows to take their money to the store.  It was not that bad during Carter’s one term, but the price of milk and bread was outrageous.

Gas prices are already on the rise.  There is also no hope that America will begin drilling here and now for our own oil reserves which could lead to a shortage of oil.  We watched this happen last year and can expect the same result as we meander through this summer.  Increased gas prices and a shortage of fuel leads to long lines at gas stations.  Who can forget the pictures of lines at gas stations during the seventies.

Obama is using the kind of diplomacy that Carter implemented which lead to Americans being taken hostage (can anyone say North Korea?) and terrorist regimes growing and taking over more power, which ultimately lead to 9/11.  We cannot play nicey nice with our enemies and expect them to do what we want.  We only look weak and our enemies have always taken advantage of us when we appear weak.

This Obama presidency really is beginning to feel like a seventies flashback.  The music was great, but I can really do without money and security woes.

3 responses to “The Seventies Revisited

  1. I tend to agree that Obama is a disaster of epic proportions who’s damage will be wide ranging. Recovery will be slow and almost as painful.

    But I’m not so sure about the inflation and interest rates. There has been such monsterous destruction of money supply due to the loss of wealth that Fed money printing and Treasury deficit spending has not been able to keep up. If you investigate the money supply numbers for M0, M1, and M2 (the only numbers available since M3 is no longer published), you will see that very little actual change in the money supply has taken place — that’s why we’re not seeing inflation to date. The price increases that we ARE seeing are mostly fuel-related because the dollar has once again started to fall on foreign exchanges, but only to a small degree relative to other currencies (who’s governments are doing the same stupid things as ours). Oil is also rising because it’s a commodity and a relative safe haven for investment right now.

    Likewise, interest rates won’t rise dramatically anytime soon because Obama recognizes that to allow that to happen will put even more pressure on the economy (along with higher taxes and higher unemployment).

    I believe that Obama isn’t a stupid man politically and will do anything to avoid the Cater troika: high unemployment, interest rates, and inflation. He knows that if he repeats that, his political future, and the Democratic Party as well, is done. If there’s any chance for him to gain re-election, he can’t allow the really bad stuff to happen until after the 2012 election.

  2. Interest rates and gas prices? Is that all ya got?
    Rates have to increase, they’ve been kept artificially low for too long already, every economist will tell you that. And gas prices will inevitably rise and fall, but right now they’re like a buck lower than this time last year.
    Better luck next time…

  3. Good post! The countries lending us money are concerned about our economy, and demanding higher interest rates. Bernanke is trying to keep a lid on things.

    President Obama just won’t stop spending. Since the stimulus so far has been a complete failure, he is supposedly going to speed up the spending. But there is no evidence that stimuluses work. This one was particularly clumsy since it was just left up to Congress to enrich their contributors.

    So far, only 5 percent of the $787 billion has been spent, and informed observers say that more than that can be lost to just plain fraud.

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