Sally's Key West

Cause For Hope

An article by Gary North from the Lew Rockwell online magazine

On Bookies and Economic Gurus

I monitor a chart on a website that almost no economic forecaster pays any attention to. The chart has indicated a remarkable shift toward economic optimism. It has indicated that the American economy will not fall into recession this year. This shift has taken place in the last three weeks.

The problem with the chart and the site is that, by design, no explanations are ever offered. There is no theory of why the economy will or will not fall into recession. That is because the site is a gambling site. You pays your money and you takes your chances.

The site is Intrade. It is a web-based site. It is run from Dublin. If the owner ever sets foot on U.S. soil, he will be arrested, tried, convicted, and sent to jail. But he can afford to stay out of the United States. He is a very rich bookie.

The site allows gamblers to make bets on future events to take place or not take place during a defined time frame. One of these listed events is recession in the U.S. in 2008. As recently as mid-April, betting was over 70% that there will be a recession this year. Then, without warning, the odds turned the other way. Today, the odds are 27%.

This is a major shift of opinion. In the sports world, it would be as if Michael Jordan had been seriously injured mid-season when he played for the Bulls. You can see the chart here.

A law passed in 2006 that prohibits U.S.-based banks from making credit card payments to off-shore gambling sites: The Internet Gambling Enforcement Act of 2006. So, the betters on Intrade are not Americans, other than Americans who have opened off-shore bank accounts and who use foreign post office boxes as their addresses. This is not many Americans. The site is limited to those few Americans who value their privacy and who want a way to make payments even if the government closes certain doors, either on all Americans or on them personally.

Continue reading here.

Financial Times on Property

The economic news in London's Financial Times is not cheery, but it is also not emotional. As opposed to the hype and drama we read in U.S. economic news. We 'mericans like our drama. Well, ok, I do. But even I must say it's refreshing to read opinion and observations based on reality.

It is also noteworthy that the FT speaks in terms of a global economy, something the U.S. press avoids like the plague. Are we too good for the globe? Actually, we used to be. We used to be the pinnacle. If we don't control our spending and get our financial house in order, other countries of the world will be shaking their heads, too embarrassed for us to even look our way.

Here's our national debt:

The Gross National Debt

The National Debt has increased over $3,000,000,000,000 (Three Trillion Dollars) - that's 30% - since W has been in office. In your house, when you are deeply in debt, can't pay your current bills... do you keep spending?

We all joke about how, with a mortgage, "the bank owns my house." So, who owns the U.S.?

(Answer: The Federal Reserve. Which is not a government agency. It's a group of private bankers. So private we don't know who they are! And they own our country. But that's another post. Perhaps another blog...)

If This Isn't Proof...

Evidence Grows That Consumers Are Pulling Back

Latest Industry to Feel Pinch: Plastic Surgery

The Wall Street Journal (you have to subscribe to read it there...)
By RHONDA L. RUNDLE and KELLY EVANS

The latest sign that growth in consumer spending, the mainstay of the U.S. economy, is slowing? A nip and tuck in spending on cosmetic surgery.

The slowdown was a hot topic at the meeting of the American Society of Plastic Surgeons in Baltimore this fall. One breast-implant maker sees hints of a slowdown in demand. The number of vision-correction surgeries appears to be falling as well. "This whole mortgage credit crisis is making people think twice," said J. Peter Rubin, a Pittsburgh plastic surgeon. "It's something I've noticed and some colleagues have noticed as well."

While anecdotal, the industry chatter is the latest worrying hint of a broader slowdown in consumer spending, which accounts for 70% of the U.S. economy -- and fodder for a broader debate on how deep such a slowdown might bite.