The world's largest entity in terms of gross revenue had a bad month in April. The IRS collected only $245 billion dollars in April 2010 compared with collections of $266 billion in April 2009. This was only part of the reason the U S government ran up an $82 billion dollar deficit in April of this year because the government spent $327 billion dollars in that month versus $287 billion in April of last year. For 43 of the past 56 years there has been a budget surplus in April owing to the fact that tax collections occur then.
Of course, none of this is news to voters in Virginia, New Jersey, Massachusetts, and Utah and, as of last night, West Virginia. In all of these states the "surprise" losers were either irreparably tainted by an Obama/Pelosi/Reid connection or ossified incumbents that finally felt the wrath of an electorate that has had enough of giving at the office, giving at home, giving at the store ad infinitum, ad nauseum and giving everywhere else the government has extended its insatiable desire for taxes. Add to that anger a state immigration law in Arizona that a majority of Americans broadly support but is wildly unpopular in the establishment media, academia and other elitist strongholds and you get one of those rare moments in U S history when events converge to create a wave.
We are witnessing a worldwide repudiation of big government and Keynesian economics. In the Unites States the evidence of this is found in the results of the several state elections I mentioned above, most if not all of which were plebiscites on national policy issues. However, this skepticism is becoming an international issue. In Europe the response is much starker, verging on panic. Last weekend, before the big Euro Bailout, European bank stocks and sovereign credits (government issued loans and bonds) were almost falling off the cliff. Monday morning brought news of the bailout and things looked rosy....for about a day. Today brought news of abject panic buying of gold in Europe.
AUSTRIAN MINT SAYS SOLD 243,500 OZ GOLD IN COINS AND BARS IN LAST 2 WEEKS, MORE THAN IN ENTIRE Q1
AUSTRIAN MINT SAYS GOLD ORDERS COMING ENTIRELY FROM EUROPE IN LAST FEW WEEKS, SIGNS OF "PANIC BUYS"
The Europeans that yearn for gold do so for a reason: they don't buy the Euro bail out propaganda at all. And unlike most Americans, who buy gold as a hedge against inflation and currency devaluation, these Europeans are buying gold in anticipation of having to actually use it as a currency. (Imagine that, thinking of using gold as a currency.) Our modern economists must think that is so quaint but I will give the Europeans credit for one thing: when things get really bad over there their historical memory kicks in. That's why they are hoarding gold. And rioting.
The reason why there is such a loud repudiation of the Obama/Pelosi/Reid agenda is that many fly over country citizens know that what is known as the European contagion can happen here also. As I have mentioned before, in the midst of these financial crises of the past three years there is an enormous confidence game going on. When that confidence is lost (as appears to be happening in Europe) the result is not something that can be contained by a press conference or a new stimulus plan.