The argument that the two parties should represent opposed ideals and policies, one, perhaps, of the Right and the other of the Left, is a foolish idea acceptable only to the doctrinaire and academic thinkers. Instead, the two parties should be almost identical, so that the American people can "throw the rascals out" at any election without leading to any profound or extreme shifts in policy.When it comes to wars, or the relationship between banking elites and government, that statement rings true. But I'm not so sure these upcoming elections will be business as usual. At least not for the US Dollar.
It remains to be seen how the Republicans act if/when they take control of the US House of Representatives, and possibly narrow the gap in the US Senate. The Republicans are promising to be the party of responsible financial stewardship, yet has anyone told these politicians running for office how our monetary system really works? Maybe they, or at least their party leadership already knows and they are only spewing forth what the electorate believes to be the truth?
It seems like it was merely yesterday that a recent Democrat takeover of the Congress found itself working with a Republican White House, under George Bush, to "save" the banking system, if not Western Civilization as we knew it. All it took was for the Democrat leaders to be rounded up by Hank Paulson, then Treasury Secretary, and then lectured as to how our monetary system actually worked, how growing debt is required to keep the system from collapsing, and how spending incredible amounts of money was necessary or else, as George Bush put the impending economy's condition: "This sucker could go down."
I wonder if Ben Bernanke is following this election closely. After all, if the Republicans take control, Keynesian fiscal spending will be curtailed and it will be Friedman Monetarism that will be in the spotlight. What does that mean to the size of QE2, 3, 4, and so on? What has the market priced in already?
Either way, we are merely delaying the inevitable failure of a monetary system that seems to be nearing a tragic end. Printing more money only makes the future servicing of the debt that much more difficult to handle, and cutting Congressional spending now only accelerates the deflationary aspects of a severe depression. Damned either way as it will be the dollar that becomes the last victim.
It is important to keep in mind that never in world history has any monetary system not collapsed. Eventually, monetary systems always do. It's the consequences of a monetary system's failure that are difficult to predict. We live in a world of extreme fragility - as Nassim Taleb has described. Money whirls around the world at lightning speed. Prices of everything are monitored and adjusted in milliseconds. Nations export inflation in mere days. And Monday thru Friday, there is always a market that is open somwhere.
To borrow a phrase: The Sun never sets on the markets, but it does set on monetary systems. How will this upcomg election chnage things?