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November 7, 2012 By Steven E. Greer, MD
With the uncertainty of the election out of the way, not much else in terms of good news is in store for the country and the global economy. Caution: this is a gloomy report.
- The financial system is being held together by Tim Geithner Band-Aids. Our largest institutions are failing. Citigroup ousted the CEO. Bank of America is in trouble and being sued for fraudulent mortgages. Morgan Stanley is floundering and restructuring in the “C- suite”. HSBC, UBS, and others are in dire straits in Europe.
- The European bad debt situation is growing. Governments are broke and not purchasing expensive medical devices or drugs.
- In the U.S., since congress is still divided as it was before the election, the fiscal cliff and sequestration problems will come down to a game of chicken in a few months. The fact that Mitt Romney almost won the popular vote will embolden congress to keep on obstructing.
- With the ACA “Obamacare” law going forward, employers will dodge the costs by switching to part-time labor.
- Up to 26 Tea Party governors will refuse to expand Medicaid as required by the ACA law until the Supreme Court said otherwise.
- The trillions in cash sitting overseas on corporate balance sheets will stay on the sidelines.
- All of these years of “free money” created by Ben Bernanke’s Federal Reserve printing money with “Quantitative Easing”, “Twist”, etc will rear its ugly head in the form of inflation. As the value of the dollar is impacted, the purchasing power of the consumer will go down, exacerbating economic woes.
- The high unemployment will continue to cause fewer people to have private insurance and fewer people able to have lucrative medical procedures. Tertiary care hospitals will continue to struggle. The added number of “insured” under the ACA law will be low-mix Medicaid. People will not be able to get the private insurance exchanges unless they are employed with an income.
In our estimation, there will be no miraculous recovery in 2013. However, it is a coin toss as to whether we enter a double dip depression or slowly mutter along in gradual job growth as the “new normal”.