Monday, October 29, 2007

trouble brewing ahead

I have been keeping up with recent news and feel out of whack with what is going on in the economy. I see the stock market is moving up but don't feel confident in why the market is up while the economy slows. I have a few reasons

1) The fed is trying to cover up the foreclosure disaster by lowering interest rates. In the meantime, commodity prices are flying through the roof and the dollar is getting its butt kicked like its an opponent of the New England Patriots. Ultimately, this action will create longer lasting economic problems for the US. I don't see a problem with the rise in foreclosures. People who bought houses without even reading what the adjusted interest rate would be were stupid and deserve some short term pain. Let them go back to renting.

2) The price of oil is skyrocketing. And there is no end in sight. The instability in the middle east is growing. Iraq cannot govern itself, Iran continues on its nuclear mission, and Turkey has joined in the mess with their squabbling with the Kurds. I feel that this is just the tip of the iceberg as Russia and China will become more involved. A barrell of oil currently costs over 90 dollars a barrell. The silver lining in this issue is that research and development into other sources of energy have also skyrocketed.

3) A larger percentage of the GDP is covering health care costs. To be fair, more Americans are living longer. But that is inconsequential to other issues like prescription drug legislation or the profiteering of HMO's and insurance companies on the health of Americans. Unless we find a way to curb these costs, they will impact our work productivity in the long term.

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