8 Reasons Why Obama Will Not Solve This Crisis

JS Kim does it again! With his unorthodox assessments and predictions (that often come true, i have to say!), here are 8 reasons why he thinks the Obama administration will not pull America and the world with it, out of its current economic throes, by the end of this year!

(1) Consider that President-elect Obama voted FOR the horrible $700 billion bailout plan that accomplished less than zero in fixing the global economy while only transferring wealth from people that were struggling the most to the unethical financial executives that created this problem.

These were my exact words in October, 2008, verbatim, about the eventual effect of the bailout plan: “Don’t believe the media spin. This will fix nothing. Even if and when the government overpays Wall Street and US banks by 300%, 500% and 1000% for their toxic assets, this temporarily recapitalizes these financial institutions but only creates A MUCH BIGGER PROBLEM for the future.”

If I understood why the bailout plan would most definitely fail, and the next President of the United States could not, that is a scary thought. On the other hand, if President Obama understood that the bailout plan would likely accomplish nothing but the transference of wealth from hard-working citizens to corrupt financial executives and still voted for the bill, then this action needs no further discourse.

(2) The problems afflicting the global economy still have not yet been addressed by any Central Bank or government in any intelligent manner and thus, are not on the path to recovery. No single man, no matter how competent and no matter how much goodwill he possesses worldwide, can fix this current crisis without severely overhauling the current fiat monetary system. There has been zero evidence thus far, that the Obama administration wishes to address the root problem of this crisis – an unsound monetary system.

(3) This crisis is being misreported by virtually every finance journalist in the world due to an education system that teaches an unsound Keynesian economic model at every top university in the world. From the Obama administration’s actions thus far, it is clear that he is taking a Keynesian approach in his attempt to fix the problem, which is to spend your way out of an economic meltdown. The only problem is that any “fix” that may result from such an approach will be 100% illusory and only result in further destruction of wealth by ensuring future devaluation of the world’s major currencies.

(4) Thus far, President Obama’s cabinet appointments do not reflect, in the slightest manner, the enormous change that he spoke of during his campaign. On the contrary, his talk of change, quite honestly, appears to be 100% rhetoric. A clear example of this is President Obama’s appointment of Timothy Geithner, the former President of the New York branch of the U.S. Federal Reserve, to the U.S. Secretary of Treasury, and his appointment of Paul Volcker (Chairman of the Federal Reserve Board, 1979-1987; Chairman of the New York investment banking firm, J. Rothschild, Wolfensohn & Co.; Chairman of the Board of Trustees of the Washington-based financial advisory body, the Group of Thirty; founding member of the Trilateral Commission; and Chairman of the Board of Trustees of the New York-based International House) to head his economic advisory board.

A further inspection of Obama’s economic advisory board reveals a who's who of executives from the institutions that created this current mess!

Furthermore, Volcker was highly instrumental in ensuring one of the worst decisions in economic history, the U.S. decision to suspend gold convertibility in 1971 that subsequently allowed a 100% fraudulent monetary system to spread globally, and consequently almost resulted in the collapse of the U.S. dollar in the late 1970s. Obama’s cabinet appointments are perhaps the most damning evidence that he is strictly about maintaining the status quo and not at all about change when it comes to Wall Street.

(5) For a historical example of how the Obama experiment is likely to turn out, please research the election campaign of Mexican President Vicente Fox (Mexico’s President from 2000-2006). Vicente Fox was largely perceived as a savior among the Mexican general masses because he was the first opposition candidate to defeat the PRI (Institutional Revolutionary Party), a party that had ruled Mexico for more than 70 years. Fox’s election campaign, full of slogans like “Vote for Change" and “Enough!", could have served as a blueprint for Barack Obama’s masterful election campaign. By the time Fox’s six years of Presidency had expired, he was widely regarded as a huge disappointment for failing to implement almost every major plan of change he promised during his campaign and doing very little to change the status quo.

(6) Don’t let President Obama’s professed anger regarding the $165 million of bonuses slotted for AIG executives fool you. The U.S. government clearly changed security laws at their whim last year by making short selling of financial stocks illegal for periods at a time to artificially force financial stock prices higher and thus, help out financial executives, with little opposition. Thus if the President and U.S. Congress’ anger about these bonuses are real, it seems to me that they would just implement new laws to end fraudulent bonuses. They would just “do” instead of keep “trying.”

(7) Why wasn’t the expressed outrage of the Obama administration regarding $3.6 billion of bonuses that Bank of America (BAC) paid to Merrill Lynch (MER) executives, a figure that dwarfs $165 million, equivalent to the outrage being expressed over the AIG bonuses? Something tells me that because AIG is not a pillar of Wall Street it is receiving harsher treatment. I’m not arguing against this harsher treatment by any means. I’m merely illuminating that the hypocrisy in these different standards is an indictment that Wall Street firms’ ties to the U.S. government are so strong that they are still being favored despite the rhetoric.

(8) Remember when former U.S. Treasury Secretary Hank Paulson’s original $700 bailout bill was a 3-page document and he promised that no money would be spent without extremely close supervision? Remember how this 3-page bill mysteriously morphed into a 450-page $850 billion bailout, and loopholes galore were snuck into this new bill last minute so that billions of the bailout money could be allocated for executive bonuses although Paulson promised us such shenanigans would not occur? Remember that Obama voted for this bill!

Here you have it. Time will tell whether his views are proven valid. If indeed correct, it is a scary thought that the world economy will take some more beating before the dust finally settles.

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