Warren Buffett : Gloomy On Economy

June 25, 2009

When the man from Omaha speaks, the world listens. When Gerald Celente speaks the world gets worried. Both men are saying the same thing. The world (and yes that would include America folks) is not yet out of the financial jungle. That the number of Americans filing claims for unemployment benefits unexpectedly rose last week is yet the latest example.

Initial jobless claims rose by 15,000 to 627,000 in the week ended June 20, from a revised 612,000 the week before, the Labor Department said today in Washington. The number of people collecting unemployment insurance gained by 29,000 in the prior week, to 6.74 million. That is nearly 7 MILLION people trying to live on unemployment insurance from money that the U.S. government does NOT have!

So, how’s that work?

It doesn’t.

And the news from the states is even getting worse. One week and counting. An unprecedented number of states have only days left to pass their fiscal 2010 budgets. At least 19 states are still hammering out their spending plans as the recession wreaks havoc with their finances and sparks fights between governors and lawmakers. If spending plans aren’t approved, state workers may not receive their paychecks and some government offices may shut down.

And then there’s California!

California’s controller said on Wednesday that he would have to issue IOUs in a week if lawmakers can’t quickly solve a $24 billion budget deficit, and the state’s treasurer plans to tap a reserve fund to meet debt service costs. The measures came as a budget crisis deepened in the most populous U.S. state and the gridlocked legislature failed to pass a proposed $11 billion in cuts. “Next Wednesday we start a fiscal year with a massively unbalanced spending plan and a cash shortfall not seen since the Great Depression,” Controller John Chiang said in a statement announcing that he would be forced to use IOUs to pay the state’s bills beginning on July 2.

The BILLIONS & TRILLIONS in so-called STIMULUS STUFF simply isn’t working. We are headed in the wrong direction and we’re going there at supersonic speeds. Is there anyone who can stop this freight train called America before we hit the wall at the end of the track?

Written by Ernie · Filed Under Daily Commentary