Obama and his team have been reading Jonathan Alter's "The Defining Moment: FDR's Hundred Days and the Triumph of Hope". The first hundred days of Obama's presidency will be crucial for the success or failure of his team's plans to save the USA and the rest of the world. FDR carried through an amazing number of changes after his inaugeration in 1932. These included shutting down the banking system for four days to sort out the banks; he also put an embargo on gold and silver in the following weeks. FDR created several regulating agencies and acts over the hundred days that still exist today. However, some, such as the Glass-Steagal Act was dismantled after pressure from the banks late in the Clinton presidency. What a terrible mistake that was! Some of FDR's actions were made in error, others were great successes. Overall, he was a man of action and subsequent presidents who also tried to imitate the whirlwind of activity in FDR's first hundred days never quite measured up. But then the economic troubles facing US economy and those of the world were not as great as the ones Obama faces. Personally, I wish him well.
Three early predictions:
1. Obama will do something dramatic with the banks - either acting like FDR and ordering an extended "bank holiday" in which some banks do not re-open because they are just too toxic or nationalise the whole banking system; if there was true justice he would order some of the bankers whose greed got us all into this mess on trial for criminal behaviour for treasonous actions against the state. BTW the same should happen in the UK and around the world.
3. Quantative easing - the printing of money causes inflation to rise signifantly to inflate away debts. (They will manage this in stages in an attempt to stop runaway inflation. Whether he and his team succeeds in the latter may determine the rest of this presidency.
3. A great investment splurge, probably as much as a trillion dollars, is expected over the next few weeks. This will fund a huge public spending program on roads, bridges, medicare and schools, etc. and other essential infrastructure in the US. Similar public works spending can be expected around the world.
Within a year to 18 months:
1. The dollar devalues by up to 40%
2. Gold rises to above $1650 to "balance the books". Some kind of gold certificate scheme will underpin the dollar, if the currency still exists in this name.
If any of the above happens it will change the economic landscape for decades. If not, capitalism will have run its course and a new economic hegemony such as socialism or fascism will gain traction throughout the world. Let's hope that it is not the last of these options!
http://www.amazon.com/Defining-Moment-FDRs-Hundred-Triumph/dp/0743246012
