I was having a look at Innocent Bystanders and found this interesting graph:
Here is the explanation:
A couple of weeks ago I wrote a post on the predicted unemployment numbers for April. Well, the real numbers came in today, and the result was exactly what they predicted: 8.9% unemployment.He goes on with a few words about Obama's economists:
Oh my. It appears that his economists can’t predict very well (that fills me with confidence), and that his stimulus package is providing absolutely no benefit.And further note that the "without stimulus" prediction shows unemployment peaking at a little above 9% just in time for the 2010 election season.
And it certainly doesn’t look like his plan has “saved or created 150,000 jobs.
However, that is not all the bad news coming in. The current Treasury auction of government bonds shows interest rates rising at a higher than expected rate.
The U.S. Treasury auction of long-term bonds on Thursday was “terrible”, in the words of one Wall Street economist, with the rate on the 30 year bond jumping from 4.1 to 4.3 percent. This is just the first sign that the debt-based Obama economic stimulus plan is about to become a major drag on the recovery, just as expected.And you know what that means? Stagflation. Just as I have been predicting. And predicting. And predicting. And predicting. And predicting. And predicting. And predicting.
The economic news is not all bad. We are seeing signs the rate of contraction is abating quickly, promising a bottom to the recession sometime this summer as many forecasters have expected. But therein lies another piece of the interest rate puzzle, and the trouble ahead.
There are two critical consequences to the economy stabilizing. The first is that the massive liquidity injected into credit markets by the Federal Reserve and central banks around the world transforms from economic medicine to inflationary heroin. Central banks are going to face a difficult task of extracting the excess liquidity before inflation soars and without causing another recession. Doubt about the fight against soaring inflation means higher inflation premiums in interest rates.
The second dangerous consequence is that President Obama is on course to double the national debt in just four years. After years of complaining about annual deficits of $300 billion or $400 billion and their effects on interest rates, liberal commentators are suddenly silent now that the deficit is heading toward $2 trillion under a liberal administration. But now the vaunted “crowding out” effect from government borrowing is almost a certainty, as are the resulting higher interest rates.
Now if I (no economist) could see this coming why didn't Obama's crew? OTOH maybe this is a feature, not a bug. If Obama, The Smartest President Ever™, didn't see this coming then the stupid are in charge and we are screwed. If it was intentional then we are so screwed.
Which brings me to Simon's Law:
It is unwise to attribute to malice alone that which can be attributed to malice and stupidity.
Yep. We are double screwed and will be hammered into the ground until we get rid of the current wrecking crew.