I don't have much time so I'll make it short.
We all liked bubbles when we were kids. But now that we're older bubbles have become ominous markers for economic disaster.
Historical and recent examples are;
* Commodities bubble (1970's caused by the Fed pumping money after coming off the gold standard and resulting in 14 % interest rates and double digit inflation) Great lesson in the governments ability to regulate the economy.
* The Dot Com bubble (everyone knows its cause)
* The Housing bubble. (A direct result of government regulation through GSE's FANNIE MAE and FREDDIE MAC forcing financial institutions to make bad loans under threat from the United States Justice Dept. and develop tools to cover liability. This pumped money into the housing sector artificially inflating its value.)
Now the Fed through QE1 and QE2 has done it again.The central bank buys government bonds and other financial assets, with new money that the bank creates electronically. Over $1 trillion total by the time they're done.
Pumping up the bubble. The Obama Administration with all it's deficit spending on ARRA, TARP and Obamacare and so on has accumulated to date 14.4 trillion. That is one big ass bubble!
The assumption is that the government and its policy wonks, many of whom know squat about business, are smarter at spending 14 trillion dollars than the private sector
Stifling oil exploration is really just another tax on the American PRIVATE SECTOR tax payer and it was and is unnecessary. Only one or two permits have been issued for deep well drilling in the gulf since the BP oil spill and the moratorium's lifting.
I have called bull shit on methods used by the Labor Dept. to quantify unemployment and economic data in general in the past. Now I'm also stating the obvious that our Fed Reserve doesn't know its head from its ass either.
The Feds "Beige Book" for example,
http://www.federalreserve.gov/FOMC/BeigeBook/2011/20110413/default.htm,
paints a much more optimistic economic assessment than the reality most folks see on the ground staring them in the face.
Let's take a look see at their latest April 13th summary;
"The U.S. economy continued to improve across all regions at the end of February and through March, with most of the Federal Reserve's 12 districts reporting widespread gains, the Fed said Wednesday.
In its latest beige book, the Fed said the weak jobs market was also doing better, with hiring still strong in manufacturing, a sector that continued to lead gains."
The Fed survey of regional economies, which was prepared by the Richmond Fed based on information collected before April 4, will be used at the Fed's next policy-setting meeting April 26-27. Top Fed officials have in recent days signaled they will keep credit cheap because unemployment is still high and inflation, while rising, is expected to remain subdued.
Now let's look at the BLS numbers released this morning;
"Initial jobless claims increased by 27,000 to a seasonally adjusted 412,000 in the week ended April 9, the Labor Department said Thursday in its weekly report. The prior week's figures were revised up to 385,000 from an originally reported 382,000.
Economists surveyed by Dow Jones Newswires had forecast claims would rise by 3,000 in the latest week.
The four-week moving average of new claims, considered a more reliable indicator because it smooths out volatile weekly data, rose by 5,500 to 395,750 in the week ending April 9.
The claims data gave another sign of the economy's struggle to pick up the pace as it tries to recover from the 18-month recession that ended in June 2009."
The fatal error here is assuming the recession is over just because the Fed Reserve and stratospheric deficit spending since June of 2009 stopped it. Keynesian theory assumes this strategy will jump start our economy and eventually the private sector will struggle back to its feet standing on its own.
Folks I'm telling you straight up. All that has been created here is the mother of all bubbles. Higher taxes on "the rich" or anyone else for that matter will only expedite the inevitable and intensify the certain catastrophic results which lies dead ahead.