I enjoy Dr. Robert Reich's blog. He is a solid thinker with a lot of common sense. He is the nation's 22nd Secretary of Labor and a professor at the University of California at Berkeley (blog: http://robertreich.blogspot.com). These are some of his latest notes. I take them seriously in light of the protracted and ominous decline of the dollar.
....the era of easy money is over. The housing bubble is bursting, and home equity is drying up. Credit card debt is next. Personal bankruptcies rose 48 percent in first half of 2007, likely even more in the second half – which means a wave of credit-card defaults. If you think the trillion dollars in sub-prime mortgage debt carried by big banks is large, think of the record nine hundred fifteen billion dollars Americans hold in credit-card debt. The splurge is over, folks. As the days of easy money come to an end, what will America look like? Maybe we’ll see a recession in the short term, but more importantly over the long term: the American middle class will have a truer understanding of what it can and cannot afford; a truer sense of what’s really happened to its paychecks; and a more realistic view of where and to whom the economic gains of the last dozen years have actually gone.
I firmly, wholeheartedly believe that the decline of the dollar since 2003 is not a coincidence. The message of the international investment community is that opportunities will be found somewhere else.
More on http://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
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