US Economy Continues Its Downward Slide
July 16, 2008 2 Comments
With three more financial outlets collapsing under the economical meltdown last week, queues of angry people outside banks with no access to their money, inflation at its highest rate for 27 years and scores of economists predicting a recession may tip into a full blown depression, president Bush reacted by declaring that the economy is still fundamentally sound.
“I think the system basically is sound, I truly do,” Bush said. “And I understand there’s a lot of nervousness. . . . But the economy is growing, productivity is high, trade is up, people are working. It’s not as good as we’d like, but . . . to the extent that we find weakness, we’ll move
US inflation accelerated at its fastest pace in 17 years in June, official figures have shown, driven higher by surging energy prices
June’s annual inflation increase was the highest since 1991 while the monthly jump is the sharpest since September 2005. At the same time as inflationary pressures are rising, the US faces a severe housing slump, a credit crunch and financial market turmoil stemming from the collapse of the sub-prime mortgage market
“Inflation comes from the unwise increase in the supply of money credit….to argue that we can continue to debase the currency, which is really the policy of that you’re following, purposely debasing value of currency – which to me seems so destructive….it just puts more pressure on the federal reserve to create capital out of thin air in order to stimulate the economy and usually that just goes into mal-investment,” said US Congressman Ron Paul.
Americans are now witnessing the fallout from this destructive economic system that The Fed, the president and the White House still refer to as fundamentally sound. No where has this been more evident than outside branches of failed IndyMac banks across America where furious customers have queued for hours in order to get access to their money, to no avail. Some have even been threatened with arrest for becoming agitated.
This could herald the new image of America with news that “U.S. regulators are bracing for dozens of American banks to fail over the next year.”
According to an International Herald Tribune report, “Troubles are growing so rapidly at some small and midsize banks that as many as 150 out of the 7,500 banks nationwide could fail over the next 12 to 18 months.”
Sources: Infowars, BBC News