John Bougearel – author of Riding the Storm Out

Bernanke and other officials have officially declared in Sept 2009 “mission accomplished” the recession is over.  We are now on the road to recovery.

First, if you believe this script of history as written by the powers that be, the Fed and US Treasury rescued the economy from the financial crisis that no one could see coming and now they have put us on the road to recovery with their unprecedented fiscal and monetary stimulus. Or is this so-called road to recovery merely the “road the serfdom” whereby in return for protecting us from the abuses of the financial system that the powers that be created, the average American gets the right to work the rest of his life to pay down housing-related and consumer-related debts that they were encouraged to take on. We risk becoming a society of serfs through necessity to pay off our debts, and through the higher taxes we are going to incur as a result of this debt-laden credit crisis. We have created the conditions necessary to build the road to serfdom for ourselves. Not only have we bound ourselves to serfdom through our debts, but we have bound our heirs to serfdom. Our heirs will inherit our debt through higher taxes and such.

So much for this much ballyhooed economic recovery. It is the most surreal absurd thing ever heard of by main street America, where roughly one out of every ten Americans are unemployed as reported by the BLS’s U3 figures and whereas roughly one out of every six Americans are unemployed by the BLS’s U6 measurement.

Now, back to the title “Mission Accomplished.” Agora Financial’s Bill Bonner, noted this is exactly what George Bush said days after his “shock and awe” invasion of Iraq. To state the obvious, if the mission was accomplished then what the hell are we still doing there? If we’re on the road to a sustainable economic recovery, then why the hell is the Fed still printing money for the government to borrow to finance this damn recovery? Why are millions still losing their jobs. Why is the public debt spiralling out of control to finance this wonderful recovery? Why are there ghost fleets of Merchant ships floating off the coast of Singapore laden with goods without a home, no place to go. Magilla gorilla is for sale, but no one is buying Magilla gorilla’s anymore. 12% of the global merchant fleet is idled off the Singapore coast. Over the next two years, a total of 25% of the global merchant fleet is expected to be idled. Now that is a hell of an economic recovery. By Q3 2009, GDP can be said to be growing because of cash for clunkers and other such stimuli. Officials can thus pronounce the US is back in recovery. But after the cash-for-clunkers program ended on August 24 2009, US demand for distillates, jet fuel demand, gasoline demand, and total energy products immediately began contracting again. Moreover, total demand for energy products remain roughly 10% below the 5 year average demand for this time of year. No, no, Mr. Carpetbaggers selling snake-oil economic recovery stories, until energy demand picks up and begins to close the gap on the 5 year average demand, this recovery story is at best a story of hope, at worst, it could be a smoke and mirrors sham intended to mislead the public.

The more cynical amongst us might call these monetary and fiscal policies just a huge transfer of wealth from Americans.