OBAMA DOCTRINE: MIDDLE EAST CHAOS, SOARING OIL PRICES SPARK GLOBAL RECESSION FEARS

The turmoil in the Middle East, the Federal Reserve's decision to further devalue the U.S. dollar through a third round of "quantitative easing" (QE3), and rising oil prices are combining to create a toxic economic brew that could send the global economy into recession. 

That was the assessment of International Energy Agency chief economist Fatih Birol. "I see the [oil] prices today, in this economic context, as unbearable for consumers," said Birol on Friday. "High prices together with other factors could push the global economy back into recession." 

Mr. Birol's comments come as U.S. oil prices hit a four-month high on Friday:

Since late June, the price of crude oil has climbed about 25 percent, fueling a 16-cent increase in the average price of regular gasoline and adding to the economic headwinds facing President Obama in the final weeks of the election campaign.

Industry experts believe that President Barack Obama may use the Middle East uprisings and soaring fuel costs to justify tapping the nation's 700 million-barrel emergency Strategic Petroleum Reserve, similar to what Mr. Obama did last year to no lasting effect.

But it was the Federal Reserve's decision to pump $40 billion so-called "stimulus" dollars a month into the U.S. economy in the form of buying mortgage-backed securities that ultimately may prove to be the match that lit the economic powder keg. As the value of the U.S. dollar goes down, oil prices go up. That means slower economic growth and higher consumer prices. 

As Reuters explains, the confluence of all these economic factors is producing a chain reaction of higher consumer prices, plunging industrial production, and soaring gas prices:

Highlighting the risk to the economy from surging oil prices, a jump in gasoline costs pushed up U.S. consumer prices in August at the fastest pace in more than three years and squeezed spending on other items, threatening to slow economic growth.

Industrial production dropped 1.2 percent in August, the biggest decline since March 2009. The consumer price index increased 0.6 percent, the first rise in five months and the biggest since June 2009.

Gasoline prices, which also recorded their largest increase since June 2009, accounted for about 80 percent of the rise in consumer inflation last month, the Labor Department said.

Via: Breitbart
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U.S. CREDIT RATING DOWNGRADED AFTER FED PUMPS MORE MONEY

A prominent ratings firm downgraded the U.S. Government's credit rating from "AA" to "AA-" one day after the Federal Reserve announced it would pump more money into the economy by buying more than $40 billion of mortgage-backed securities per month until the economy improves. 

Ratings firm Egan-Jones said it cut its credit reating on the U.S. government because it felt the Federal Reserve's quantitative easing "would hurt the U.S. economy and the country's credit quality" by devaluing the the dollar while doing nothing to "raise the U.S.'s real gross domestic product."

The ratings firm said the Fed's action would increase the cost of commodities and reduce consumer purchasing power.

This is the second time this year Egan-Jones downgraded the U.S. government's credit rating. In April, the ratings firm downgraded America's credit rating from "AA+" to "AA" and gave the country's credit a negative outlook.

The ratings firm's pessimism then was correct, as Obama has mismanaged the country's economy like he has its foreign policy, spiraling the country into more debt and potentially taking it over the so-called fiscal cliff that looms after the November elections. 

Via: Breitbart

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US Credit Rating Cut by Egan-Jones ... Again

Ratings firm Egan-Jones cut its credit rating on the U.S. government to "AA-" from "AA," citing its opinion that quantitative easing from the Federal Reserve would hurt the U.S. economy and the country's credit quality.

Getty Images

The Fed on Thursday said it would pump $40 billion into the U.S. economy each month until it saw a sustained upturn in the weak jobs market. (Read more: Fed's 'QE Infinity' — Four Things That Could Go Wrong)

In its downgrade, the firm said that issuing more currency and depressing interest rates through purchasing mortgage-backed securities does little to raise the U.S.'s realgross domestic product, but reduces the value of the dollar.

In turn, this increases the cost of commodities, which will pressure the profitability of businesses and increase the costs of consumers thereby reducing consumer purchasing power, the firm said.

In April, Egan-Jones cuts the U.S. credit rating to "AA" from "AA+" with a negative watch, citing a lack of progress in cutting the mounting federal debt.

Via: CNBC

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JOBLESS CLAIMS JUMP TO 382K

New claims for US unemployment insurance benefits headed higher last week after the previous week's drop, underscoring the continued frailty of the US jobs market, data showed Thursday.

As markets awaited a decision by the Federal Reserve to aid the weak economy, the Labor Department said that initial jobless claims rose to 382,000 for the period to September 8 from the previous week's 367,000.That pushed the four-week moving average higher to 375,000, the department said.

Via Breitbart
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Obama’s Thursday Night Secret About Jobs

When President Barack Obama takes the stage Thursday night at the Democratic convention, he’ll probably know a secret about the economy that you don’t: the contents of Friday’s employment report. But don’t expect easy clues in his big speech.

ZUMAPRESS.com

Friday’s jobs report, one of only three before the Nov. 6 election, could prove more influential in shaping perceptions about the economy than anything Mr. Obama says in Charlotte when he accepts his party’s nomination. Payroll numbers have been choppy throughout the year, and Friday’s data — released at 8:30 am Eastern time — might help clarify recent trends. (The report will also tell us whether the unemployment rate changed from July’s 8.3% and it could help the Federal Reserve determine whether to launch a new round of bond-buying next week.)

Mr. Obama doesn’t have to wait until the formal release to see the numbers. Under a decades-long practice, a select group of U.S. officials learns the contents of each month’s jobs report on the Thursday evening before its release. The Bureau of Labor Statistics delivers the information sometime Thursday afternoon to the White HouseCouncil of Economic Advisers, which analyzes the data and prepares a memo for the president. (The CEA chairman or director of the National Economic Council often informs the president in person.)

The routine is governed by a directive from the White House Office of Management and Budget. It allows top government officials — like those at the White House,Treasury Department and Fed — to know about an important report that could shake global markets. Employees of the executive branch aren’t supposed to comment publicly on the data until at least one hour after the official release on Friday morning. That’s why we don’t hear the White House’s spin on the report until 9:30 a.m., almost an hour after the opposing party has spit out its own statements. (The White House has gotten more careful in recent decades. Back in the 1960s, President Lyndon Johnson caused a stir more than once when he commented on favorable numbers before they were released.)
Via: Wall Street Journal

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The Childishness of the American Left

The American left is the most self-indulgent, arrogant, and spoiled group of people on the face of the earth.  They live in a nation facing national bankruptcy and societal upheaval -- a country presently subsisting on the residue of past economic achievements.  Yet the only things that matter to them are their lifestyles and imposing their self-determined superiority on rest of the American people.

The true indebtedness of the United States now exceeds $222 trillion.  Appearing on National Public Radio in August of 2011 Professor Laurence J. Kotlikoff of Boston University said:

If you add up all the promises that have been made for spending obligations, and subtract all the taxes we expect to collect, the difference is $211 Trillion.  This is the fiscal gap.  That is our true indebtedness.

Since that interview, the indebtedness has increased by another $11 trillion.  Yet these estimates do not include the full impact of ObamaCare, which could add another $17+ trillion.  On the other side of the ledger: the annual Gross Domestic Product (the value of all economic activity in the U.S.) is $15.6 trillion.  The indebtedness to GDP ratio is a staggering 14.2 to 1 and guaranteed to further accelerate if Barack Obama is re-elected.

The United States is not facing bankruptcy, it is bankrupt.  The primary factor that has kept the nation afloat over the past four years is that the dollar, albeit temporarily, remains the world's reserve currency, thus allowing the Federal Reserve to print enormous sums of money to cover the Obama budget deficits and flood the global market with near worthless cash.  Today itrequires $100.00 to purchase the same goods $10.00 purchased in 1950.

Via: American Thinker

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