Posted Dec 26, 2012 by Martin Armstrong
President Barack Obama is due back in Washington early Thursday for a so called final effort to negotiate a deal with Congress to postpone the “fiscal cliff” of tax increases and government spending cuts set to begin next week. No specific bill dealing with this fiscal cliff was on the schedule in either the U.S. Senate or House of Representatives.
Speaking directly to sources on the Hill, things are not looking very good. Speaker of the House John Boehner (Office Phone Number: 202-225-0600) and the Republican establishment quietly retaliated against everyone who were on crucial House committees of strong fiscal conservatives, especially anyone who supported Ron Paul. Boehner is within 17 seats of losing the position of the Speaker of the House (legally, anyone can run for the Speaker of the House it need not be a member!). Boehner had a deal with Obama last year, but backed off when he thought it would personally cost him the position of the Speaker of the House. When he went back to Obama to try to cut a deal this time saying look we were so close last year, Obama said you should have taken the deal then.
Obama insists upon raising taxes on the rich following France. He does not get it that almost 70% of the national debt is interest! He is raising taxes of the productive portion of society not to help the poor, but the keep the debt rolling. That will reduce employment as has been the case in Europe. That 2 year old with a simple pocket calculator can figure out that eventually 100% will be consumed by interest. Spending programs will be cut to make sure interest payments keep flowing.
This not going to be HYPERINFLATION for that presumes spending keeps going and they just print to pay expenses. Instead, we are causing capital to withdraw from investment and this is producing STAGFLATION where costs are rising but economic growth is imploding.
Boehner purged fiscal conservatives from committees because he is trying to force the Republicans to play ball and keep it business as usual. January is coming up as a volatile month in so many markets, and this is the critical issue we have to come to grips with to survive. By 2016, we will have the FIRST opportunity for a THIRD PARTY to emerge in the USA and Boehner is doing his best to purge the fiscal conservatives from the Republicans. The “establishment” Republicans appear hopeless. The Democrats just want to go full force at the “rich” and have no clue what they are doing long-term. This is indeed a Fiscal Cliff we are facing. The end is certainly near and 2013 looks to be the year from hell ahead.
There is no indication that government will even listen in the USA in a respectful manner. Boehner has abandoned the mantle of Reagan and is only interested in placating the religious right while keeping the taxes low and spending flowing. There is just no long-term strategy at all.
Due to requests for a conference for the average person, as a public service this will be held in Philadelphia shortly. Many traders have requested a two-day training workshop in the USA rather than Shanghai. And still others want a World Economic Conference here on the East Coast. We will try to satisfy these demands. 2013 is going to be the Year from Hell! Perhaps the Maya were right that this would be the beginning of a seachange politically. It certainly could not get any worse.