Wednesday, May 30, 2012

Grow your own food, if you can

As the Republican/Teabaggers try to elect a Mitt Romney who believes Americans should suffer mightily to benefit those who created our current Depression. European financial wizards are playing Austerity Roulette which is like Russian Roulette with an automatic pistol. And now we get to watch China runs its own stimulus program to return its economy to growth.
Spooked by a sharply slowing economy, China’s leaders have begun opening the financial spigots to build still more roads and airports and subsidize consumer purchases, reprising measures that enabled the nation to sail mostly unscathed through the last great global recession.

But the leaders are signaling that the latest round of stimulus spending will fall far short of the four trillion renminbi, or $585 billion at the time, that the government poured into the economy in 2008 and 2009. That spurred a torrent of bank lending, part of it for dubious projects that many experts say will wind up bankrupt in coming years.
But whether or not this will be enough, another very troubling cloud is on the horizon.
India’s coalition government just celebrated the third anniversary of its tenure with a self-congratulatory banquet that could not have been more poorly timed: India’s currency, the rupee, is falling; investment is down; inflation is rising; and deficits are eating away at government coffers.

While short-term growth has slowed but not ground to a halt, India’s problems have dampened hopes that it, along with China and other non-Western economies, might help revive the global economy, as happened after the 2008 financial crisis. Instead, India is now facing a political reckoning, as the country’s elected leaders must address difficult, politically unpopular decisions — or risk even deeper problems.
With rising economic and political woes in the world's two largest economies, the US and Europe no longer enjoy the luxury of acting stupid with their economic policies, but they probably will. And we will all be up that creek without a paddle.

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