Author Topic: America is stretched to breaking point  (Read 1144 times)

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Offline thaiga

America is stretched to breaking point
« on: October 17, 2014, 03:13:41 PM »
America is stretched to breaking point: watch the markets

The United States is now battling on four fronts - squaring off against Russia over the Ukraine crisis, bombing ISIS in Syria and Iraq, grappling with a threatened Ebola pandemic at home, and trying to prevent its stock market bubbles from busting. Each of these crises arose from dubious circumstances and long-standing developments.

In his recent speech to the UN, President Barack Obama named Russia as a threat to the world. This followed a series of US and EU sanctions against Russia in response to the Ukraine crisis that aimed to destroy its financial and economic stability. Russian President Vladimir Putin has hit back by warning of nuclear consequences if the West and its partners continue to "blackmail" Russia.

"We hope that our partners will realise the futility of attempts to blackmail Russia and remember what consequences discord between major nuclear powers could bring for strategic stability," Putin told Serbia's Politika newspaper on the eve of his visit to the Balkan nation on Wednesday.

Putin said that Obama had identified Russian aggression in Europe as one of the three "major threats facing humanity", alongside the Ebola virus and ISIS.

"Together with the sanctions against entire sectors of our economy, this approach can be called nothing but hostile," Putin said.

"How can we talk about de-escalation in Ukraine while the decisions on new sanctions are introduced almost simultaneously with the agreements on the peace process?" he said. "If the main goal is to isolate our country, it's an absurd and illusory goal."

Obama has finally authorised bombing against ISIS in Syria and sending troops to Iraq to counter the rise of this militant group. Other Arab countries have joined the military campaign against ISIS, while some 40 countries have pledged support. The bombing of ISIS in Syria amounts to a declaration of war against that country, whose government, led by Bashar al-Assad, the US, Saudi Arabia and other Arab allies would like to topple. The war is not likely to end anytime soon. This being the case, it could spill over to other countries in the Middle East and North Africa and eventually become a full-blown regional, if not global, war. Russia, Iran and China are not likely to sit still while the US and its allies try to regain control over the Middle East and North Africa, with its abundant energy resources. The US has once against demonstrated its appetite for the doctrine of unending war. The campaign against ISIS is merely an excuse to exert greater US influence in the region.

Ebola panic is now spreading through the United States after an infected visitor from Liberia, Thomas Duncan, died while he was being treated in a Texas hospital. Two nurses contracted the disease while treating Duncan. The US Centres for Disease and Control and Prevention and other authorities involved have badly mishandled the crisis by failing to issue travel bans for the countries in West Africa that are the source of the outbreak. Hospital protocols were also lax, resulting in the transmission of Ebola in Texas. Scientists are still researching how Ebola is transmitted. If there are as-yet unknown vectors of transmission, millions could eventually die of the disease. The epidemic has been linked to dubious research and development of the virus by US researchers in West Africa. In this age of globalisation, outbreaks such as this one are difficult to contain and are thus a real threat to humanity.

Finally, the US stock market might be running out of steam after six years of the US Federal Reserve's "easy money". In August 2007 when the subprime crisis hit the US market, the Fed had plenty of firepower. Fed fund rates stood at 5.25 per cent and the Fed's balance sheet was only $850 billion. After the Wall Street crash in 2008 the Fed engineered a massive bailout, at one time printing $16 trillion to rescue the US and other global banks. Interest rates were cut sharply, to 0.25 per cent, a level unchanged now for seven years running. And the Fed launched the quantitative easing (QE) programme to buy out mortgage-backed securities from banks so as to keep the banks and the US government afloat.

We all know that what goes up must come down. The US stock market has benefited from the QE programme, which uses easy money to trigger speculative buying of equities. Now, seven years later, there are fears that US stocks can't continue to rise forever, as judged by the swing of equity prices over the past week or so. The trouble is that this time the Fed has run out of ammunition. The interest rate, which is almost zero, can't be brought down further. If a crisis were to hit the US market again, and it will, the Fed will be caught without any rescue tools. Some say the market could crash 50 per cent. Others, such as "The Death of Money" author James Rickards, argue that it could collapse by 70-80 per cent. When will it happen? Nobody knows for sure about the timing. What is certain is that the US is engaging in several battles all at once, each posing huge risks to global stability.

The nation
Anyone who goes to a psychiatrist should have his head examined.
 

Offline pop401k

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Re: America is stretched to breaking point
« Reply #1 on: October 18, 2014, 01:27:28 PM »
Sell your US assets and buy gold.
 

Offline Al

Re: America is stretched to breaking point
« Reply #2 on: October 18, 2014, 06:24:46 PM »
How original - another end of the world as we know it stock market prediction. All I know is after several decades of investing I have found that it is a matter of when not if will the markets make a major correction. And yes sometimes these prognosticators are correct, and then of course they usually strive to capitalize on their fame for as long as possible, while seeming to rarely, if ever make another correct prediction.

As always, if one needs that money within the next five or even ten years, he/she should not have those funds invested in the stock market - safety is more important that suffering losses that cannot be recouped. And keeping a diversified portfolio helps too. I am only an experiment of one but it has worked for me.

And sure there are many discussions in the US concerning Ebola and every other potential crisis - when a country prides itself on real freedom of speech, discussions and opinions are rampant. I would, however, recommend that one, unlike the author not reach conclusions that those discussions are proof of panic.
 

Offline Roger

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Re: America is stretched to breaking point
« Reply #3 on: October 19, 2014, 10:55:43 AM »
Well Al I agree that the article in the Nation is pretty gloomy - however it's undeniable that the USA is juggling very many problems at home and abroad at the moment. I should think President Obama will be quite happy when his term does end.
News reports suggest that the mistakes made in handling the arrival of Ebola have rattled the calm. Happy days.
 

Offline Al

Re: America is stretched to breaking point
« Reply #4 on: October 19, 2014, 12:25:22 PM »
I just left the U.S. earlier this week and saw no evidence of an "Ebola panic." Yes there is much discussion and opinions being tossed about as to what the U.S. should do to rectify, but that is a long, long way from a panic.
 

Offline thaiga

Re: Americans 'can't give in to hysteria or fear'
« Reply #5 on: October 19, 2014, 12:38:00 PM »
Sometimes the panic spreads faster than the disease

Americans 'can't give in to hysteria or fear' over Ebola: Obama

(Reuters) - With three cases of Ebola diagnosed in the United States and more than 100 people being monitored for possible infection, President Barack Obama said on Saturday that Americans "can't give in to hysteria or fear" about the spread of the virus.

While Obama administration and world health officials remained focused on tackling Ebola at its source in three West African countries, Texas state authorities said 14 people had been cleared from an Ebola watch list. Three weeks of monitoring for fever and other symptoms was expected to end for others in the next two days if they remained asymptomatic.

Those include Louise Troh in Dallas, fiancée of the now deceased Liberian Thomas Eric Duncan, who became the first U.S.-diagnosed Ebola case in late September while visiting her. Troh, her 13-year-old son and two Duncan relatives have been in mandatory quarantine in Dallas that ends on Sunday.

The Texas Department of State Health Services said in a statement that 145 people with "contacts and possible contacts" with the virus were being monitored.

In his weekly radio address, Obama made plain he does not plan to accede to demands from some U.S. lawmakers for a ban on travelers from Liberia, Sierra Leone and Guinea, the worst-hit countries, where more than 4,500 people have died since March in the worst Ebola outbreak on record.

"We can't just cut ourselves off from West Africa," Obama said. "Trying to seal off an entire region of the world, if that were even possible, could actually make the situation worse."

Obama, who has been criticized over his administration's handling of Ebola, held a flurry of meetings this week and on Friday appointed Ron Klain, an experienced Washington lawyer, to oversee efforts to contain the disease.

Full story: reuters.com
Anyone who goes to a psychiatrist should have his head examined.
 

Offline Baby Farts

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Re: America is stretched to breaking point
« Reply #6 on: October 20, 2014, 07:24:30 AM »
Opinion by a Thai.
 

 



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