Wall Street Weekly | 10/09/2009 12:45 pm
Sinking Dollar Fair Warning to Obama, by Liz Peek

Image: WhiteHouse.gov
Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 10/5)
Editor’s Note: Liz Peek is a financial columnist.
The New York Times ran a story this week about the art that the Obamas have chosen for the walls of the White House. Featured in the piece was a painting by Ed Ruscha. The chosen canvas has a red background with the words "wait a minute," "maybe yes" and "maybe no" floating across the space. What an appropriate choice for our young president, who is suddenly irresolute about Afghanistan. Having once pronounced Kabul as central to the war on terror (oops! make that the Overseas Contingency Operation), the president is now angling for a Goldilocks position: not too little, not too much, responding to polls that show waning support for our activities in that desperate country.President Obama is uncertain not only about our military options, but also – dangerously – about economic choices. He recently affirmed while addressing a Wall Street crowd that "I’ve always been a strong believer in the power of the free market." That was good to hear, because almost none of his proposed programs suggest a love affair with capitalism. Instead, he has offered up one measure after another that substitutes government fiat for market economics – most notably in autos, health care and energy. The newest entry is the proposed Consumer Financial Protection Agency whose czar will be empowered to decide on "the manner, settings and circumstances for the provision of any consumer financial products or services." Moreover, he has revved up his antitrust department, sanctioned pro-labor policies burdensome to American employers and started a trade war.
This litany of business-unfriendly stances is taking a toll, not only on the president’s popularity, but on the dollar. The dollar took a sizeable hit this week (and gold soared) when the Australians boosted their key interest rate, signaling a recovery in that country. While earlier this year global investors drove the dollar briefly higher in their quest for safety, they have since had second thoughts. The euro, for instance, has gained 18% in value compared to the dollar since March. You don’t have to read the tea leaves to find reasons to sell the dollar – you can simply delve into the budget projections.
To put things in perspective, note that budget deficits in the U.K. are about to sink the Labour Government. The IMF puts the U.K. budget deficit this year at 11.6% of GDP and at 13.2% next year. The net public debt of Great Britain is expected to amount to 92% of GDP in 2014, up from 58% today and 38%in 2007. (The Obamacare folks should note that the IMF has called for the U.K. to rein in their health-care program, a leading budget-breaker.) The Brits are alarmed about this state of affairs, which is why they are about to junk their existing government. David Cameron, the Tory leader most likely to take over as Prime Minister, has warned that the country is in for tough times – severe cuts in social spending and higher taxes. That is not the usual campaign rhetoric, but the country is looking the future square on, and does not like what it sees.
Here’s the sobering news for the U.S.: we’re not that far behind the U.K. Our budget deficit will total 12.5% of GDP this year according to the IMF, and our national debt will soar to 85% of GDP by 2014. These figures are spurring talk that the dollar will no longer be the world’s reserve currency and that oil producers may move to price their product eventually in a basket of currencies.
Read more about: Barack Obama, David Cameron, Economy, Ed Ruscha, Government, Liz Peek, Money, News, Politics, The New York Times, United Kingdom, Wall Street Weekly























249 Reader Comments (so far…) Sign In or Register to comment
starr Nite, you are staying up too late and based on your post at 4:00 a.m. you may need more sleep LOL!! You, in no way, are qualified to state that Liz Peek’s credibility is zero. No where close. You are personally attacking her and have absolutely nothing to back it up.
Shame on you!!!! : (
In that case, suggested reading for Liz would be ; "Arguing With Idiots" by Glenn Beck. That would be the only way for her "wake up" the chronically Obamanated.
Like many Americans who watched their savings nosedive in the market crash of ‘08, I’ve had to retrench, rethink and re-strategize my retirement plans. One course I’ve considered is to spend less and save more. The second is, somehow, to get a nickel for every time some Liberal said or wrote something like this:
The last time the top income tax rate was 39%, the United States enjoyed a booming economy, rising incomes, low unemployment and expanding budget surpluses.
Unfortunately, that simple truth has been ignored by Republican propagandists and mainstream media alike during the debate over President Obama’s stimulus plan and budget proposal.
Well, there’s certainly a lesson here for Obama and the Democrats, and for Republicans, too. Surprisingly, it’s the same lesson, and a lesson neither expects.
But first, a brief digression to dispel the Liberal claim that only "the rich" benefited from the Bush tax cuts: The graph is here: http://www.americanthinker.com/2009/10/liberals_and_taxes_the_big_que.html
Deber, Thanks for the link! I am totally with you on the money!
I think Obama and Michael Moore are coming, at the same time, on having a " Love affair with Capitalism!" :-)
phyllis, as you are weary of Liz Peek’s talking points that in my estimation raises valid points on the direction Obama is leading this country, we, on the right, are extremely weary of the "unconditional love brigade" on the left who never question Obama’s decisions. It is, indeed, frustrating, I’ll certainly give you that. As I do agree with Obama on taking more time to assess the situation in Afghanistan, I do not agree with him that he is not accepting of General McCrystals assessment especially since Obama appointed him due to his expertise in this situation and has now decided to ignore him. Once again, he places himself between a rock and a hard place.
The Democratic nationalized health care bill will cost American families $1,700 a year according to a newly released study.Premiums for a single person would go up $600 than would be the case without the legislation.
The AP reported:
Of course, the fact that a government run health care program would cost more than a privately run system surprises no one.
http://gatewaypundit.blogspot.com/2009/10/dems-health-care-bill-will-cost.html
Liz Peek,
I want to compliment you on another great Friday editorial. You are always spot on. Many of us live for Fridays on Wow!
THE WILL TO COWER
"The single most important essay on the Obama administration’s first year is Charles Krauthammer’s "Decline is a choice." It usefully collects evidence to advance the argument that Obama’s domestic and foreign policy positions work together to support the decline of American power. As Krauthammer more broadly puts it: "The current liberal ascendancy in the United States—controlling the executive and both houses of Congress, dominating the media and elite culture—has set us on a course for decline. And this is true for both foreign and domestic policies. Indeed, they work synergistically to ensure that outcome."
Krauthammer emphasizes the contraction of American power abroad. Krauthammer makes the essential points. Bowing and scraping has become something of a habit, literally and figuratively. One might add footnotes referring to Hillary Clinton’s salute to the Saudi king and the State Department’s $2.5 million foreign-aid earmark for Libya that was to include $400,0000 for two foundations─one headed by Kaddafi’s son Saif al-Islam al-Gaddafi, and another headed by his daughter (reworked upon exposure).
What is to be done? Here Krauthammer is simply prescriptive: "Resist retreat as a matter of strategy and principle. And provide the means to continue our dominant role in the world by keeping our economic house in order." For now, it is enough that he has described the syndrome that afflicts us."
http://www.powerlineblog.com/
Elle Vee,
Oh so do I. Seems like Liz Peek’s threads are where we can discuss the truth about Obama and what he is doing to our economy and the war. I like her editorials and she does post on other sites. Always the best. She chose a perfect pic of Obama, just like him to have that "non caring look" during a meeting.
Bottomline: Obama has no idea what he’s doing. He duped everybody into believing things will change and get better. Its been 9 months. Wheres the beef?
For all of you Obama supporters. Hows that CHANGE working out for you? Not much good to say about him, is there?