I’ve been thinking about oracles. Actually I’ve been thinking about predictors, money, politics, the economy, and the “recovery.” I remember back to Rochelle High School Latin classes when I TH*NK about Oracles --- most specifically the Oracle at Delphi. The ancients in particular depended on soothsayers’ prognostications from their readings of the fires, the smoke, the waters and the apparitions which appeared to them. We are beyond that in the second decade of the 21st Century... or are we?
You see in times of change and danger when there is a growing quicksand of fear and uncertainty, people look to predictors for insight into what will come to be. (They want an inside edge.) I have been writing this weekly column for almost a decade now and I’ve done fairly well on what I’ve told my readers. I stand by what I write because it comes from a lot of study, research, and experience. I’ve been wrong about some timing of events, but the substance of coming problems has been right on the money. I am no oracle, nor am I an “expert” which comes from the Latin “ex perto” – a forced drip of water. In my career of public and forensic accounting I have specialized in failures – bankruptcies, debtors in possession, divorces, and litigation support work product. Having a unique and defined body of knowledge or experience, a “specialist” if you will, is less negative and certainly explains me. I mean... you all know how I am “never” negative... (Yeah right, Fred!)
Last week was ripe with stories of the impending demise(s) of the US Dollar and the Euro as the leading currencies on the planet. The US on so many fronts is drowning in debt and the dollar itself is an instrument of debt. Dollars are fiat money which are created/ printed when the US Treasury authorizes the Federal Reserve Bank to issue more Federal Reserve notes. There is nothing substantive behind the buck... no gold, silver, copper... whatever. If the myth/fiction of “full faith and credit of the United States of America” stands for anything, it is the future power of our government to tax its citizens. Taxation is a bad word anytime, so the politicos promise to lower our taxes, but continue to deficit spend. They borrow to fund our unconscionable wars and social engineering programs. The US National debt stands (for now) at a record $12.4 TRILLION. The current Obama proposed US budget of $3.4 TRILLION is also a record! Look for our country’s debt to exceed $18 TRILLION in only a few years.
If our primary global debt holders chose to dump the US Dollar as their reserve currencies, just where would they go and who would buy them out? Predictions of the Euro as the successor just aren’t possible as the number of Euros is limited by the Treaty of Maastricht. Right now economic woes in Spain, Portugal, and Greece are EACH a major threat to the stability (and very existence) of the Euro. There is presently no currency out there big enough to replace Dollars as the world’s reserve currency.
I have said that elections in 2010 should be something to watch closely. Now I am not so certain about that because I don’t “oracle” (from the Latin “orare” to see) any rising candidates following thru on their campaign promises. In the last 25 plus years both major parties have disappointed the electorate with their subsequent actions, or lack thereof. It has been a week since the Illinois Primary and we still don’t have a Republican candidate for governor. One of the Lieutenant Governor “candidates” is being asked to step down, or rather pull out, for unfolding improprieties. This is a new one even for Illinois as our political corruption should wait to surface after the election. Our “second ago” EX-Governor is already in jail and our most recent EX-Governor just had another indictment added to his coming trial.
“It’s the economy stupid” was the mantra for the Bubba Clinton campaign. The irrational exuberance of a rising stock market run amok gave the illusion of growth and prosperity. It looked like we were doing great. Not so! We have since learned that this was smoke, lights, and mirrors. Removing the final financial limitations placed on Wall Street and the big domestic money center banks after the Great Depression in the 1930’s proved foolish and escalated our current messes. The Obama Administration is now seeking to restore the New Deal regulations eliminated by Carter, Reagan, Bush, Clinton, and Bush. I don’t see that happening particularly given the recent change in campaign funding.
The 2010 election mantra should be: “It’s the jobs, stupid!” We are not going to see any recovery without a major turnaround in employment. Last week’s “revelation” of a January loss of 20,000 jobs when the five previous weekly increases to unemployment were EACH over 400,000 is laughable. 400,000 times five is not even close to being 20,000 – even with “NEW MATH!” Just how stupid do they TH*NK we are???
I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.
Copyright 2009 Questions, Inc. All rights reserved. Fred Cederholm is a CPA/CFE, a forensic accountant, and writer. He is a graduate of the University of Illinois (B.A., M.A. and M.A.S.). He can be reached at email@example.com.
Republication or redistribution of Baltimore Chronicle content is expressly prohibited without their prior written consent.
Baltimore News Network, Inc., sponsor of this web site, is a nonprofit organization and does not make political endorsements. The opinions expressed in stories posted on this web site are the authors' own.
This story was published on February 8, 2010.