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Friday, December 13, 2013

By Michael Mccune: The Rant (US Government auditor for 16 years In Cheyenne, WY. -"Uncertainty" In Economic Crystal Ball- (( to Have Michael send you the Rant to your Email contact Him Here (( mccrant@gmail.com))

"Uncertainty" In Economic Crystal Ball

The key economic word for the year is 'uncertainty'. It was uttered by former Federal Reserve Chairman Alan Greenspan. When Greenspan opens his mouth, economists listen.

 

The fact this inflation-phobic had the courage to state that word is significant because he never gave the impression anything was uncertain while as Federal Reserve Chairman he reassured three Administrations his options were always the right path.

 

As a guest on CNN's show GPS this weekend, Greenspan said uncertainty now represents the biggest problem plaguing the economy. He failed to mention the massive debt or the burgeoning mountain of regulations business has to deal with daily. But he did, under direct questioning, admit the unprecedented printing press run has no easy answer because "None of us has handled that type of problem before."

 

Greenspan acquired his fear of inflation at an early age. After witnessing the harmful effects of unaddressed inflation during the Gerald Ford and Jimmy Carter years, Greenspan spent the rest of his tenure at the Fed making sure inflation couldn't get a solid toehold. Inflation, in effect, became his Personal Enemy No. One and everything he did or said went to stopping inflation.

 

But his successor, Ben (BS) Bernanke, had not participated in the inflation fear of Greenspan and his policies reflect that. BS began the printing press run, something no country in history has been able to start and then extricate itself from. That is where much of Greenspan's current 'uncertainty' comes from.

 

"Janet Yellen (current Fed Chair) is an excellent economist, very intelligent. She will handle Fed policy as well as anyone I can think of," said Greenspan. Then he added a curious assessment. "She's as qualified as anyone I know to deal with it [the Fed's on-going stimulus program] and sufficiently knowledgeable with that extraordinary staff at the Federal Reserve to handle it."

 

Extraordinary staff? That bunch of central bank clodhoppers? As stated, they embarked on a course of action that no country in history has managed yet he believes they can handle it! What powers or skills do they have everyone else in history has lacked?

 

Greenspan touched upon the crux of the problem before he got to the Yellen question. "The extent of government intervention has been so horrendous that business cannot decide what to do about the future."

 

That's a large mouthful of truth which no amount of knowledge can digest and come up with a positive outcome for business. From ancient written history to modern times no country has been able to reverse course and set its private sector free to operate once the yoke of government has been inserted upon its' decisions. No country in history has been so overwhelmed by bureaucratic red tape as the United States over the past 12 years.

 

From the Patriot Act to Obamacare, business leaders have been strangled by a daily rewrite of the regulations affecting how they can conduct their business. If there is any "uncertainty" about the future it is which direction the government will move next--what new roadblock will be established to prevent invention and initiative from would-be innovative citizens.

 

Greenspan mostly dealt with "the long-term future" because it is tomorrow's ruling that hinders today's decisions. Uncertainty creeps in when what is perfectly legal today is deemed criminal or at least politically offensive to the government's army of bureaucrats in the near future.

 

To achieve compliance, business has to add to its costs or forego some of its profit. Either way, the business is less desirable as an asset than it was before. Business decision-makers have faced this problem every day for far too long to have any faith in the future.

 

They don't yet know what tomorrow's problems may be because the government has not yet finished intervening. The 'uncertainty' in the economic mood matches the 'uncertainty' in the EPA's climate-change data.

 

When you are a blind man, standing still while you still have the option is better than going forward or back, moving left or right because you know you are OK where you are at while any movement may drop you off the cliff. That is the very definition of uncertainty.

 

That is what Greenspan must be feeling to have said anything.

 

But no person of business can stay in one place. Their nature does not lend itself to standing still. They have to act or they don't stay in business. That is the essence of the backbone of the economy--the small business.

 

But this "uncertainty" is causing hesitation. "Uncertainty" is why this country has a non-recovery recovery in its economic status. It is why Wall Street, inflated by the backlog pressure of the printing press run, doesn't show where the state of the economy really is. It is why the bureaucrats have to find creative ways like inserting a 'knowledge' factor to show the current policies are working.

 

"Uncertainty" is a terrible word for an economist who has spent years developing massive equations to measure the immeasurable to use. But it succinctly sums up everything that is not working for the average American now.

 

And, sadly, 'uncertainty' is why the U.S. economic future seems so bleak.

 

"I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man."--Thomas Jefferson 

 

  

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