With the latest political shitstorms being the Bank Bail-Out and the Government Surplus Monstrosity, everywhere I turn I seem to be engaged in Armchair Economist Hour. Everyone is suddenly an expert on complex international finance. I am falling prey to thinking I actually understand what is going on simply because I’ve learned to parrot a few cleverly constructed talking points.

I won’t pretend to grasp what is going on in any comprehensive sense, but I am plenty curious to see how this shitstorm resolves itself (or doesn’t).

Every argument out there is being stated over and over… “Government Spending Works.” “Government Spending Does Not Work.” “The Fed will just print more money.” “This will cause Hyper-Inflation.” “This is already causing Hyper-Deflation.” “The gold standard should be brought back.” “The gold standard can never be brought back.” “This is the fault of Bush.” “This is the fault of Paulson.” “This is the fault of Bernanke.” “This is the fault of Pelosi and that damn Democrat Congress.” Everyone seems to have a pet theory and some carefully cherry-picked “facts” to back this theory up. And, of course, many of these “theories” are regurgitations of carefully spoon-fed think tank soundbites.

I think a lot of the uncertainty is directly related to how quickly these issues snowballed to prominence in the media and how few Americans truly understand even the most rudimentary things about how banks and governments operate.   The wake up call for most people  was the market collapse back in the fall –  “investment banking actually went extinct — as if a meteor landed on the corner of Madison Avenue and 51st Street”. (I’m the first person to look for an October Surprise type conspiracy that tilts the outcome of an election but that one seemed downright off-the-charts bizarre.) October was, of course, the perfect swan-song for the Bush Era — collapse the market, throw a shoe at the guy and get that train-wreck off the stage before anyone has the gumption to figure out where his family’s buddies went with the Treasury. But to usher in the Obama Era with swirling predictions of complete economic collapse is even more unsettling. So much for a honeymoon where we can believe that the Crusader for Hope and Change will ride in on horseback and whisk the Bush Era nightmares away.

Last fall when I heard about the market collapse the first thing that came to my mind was, “So this is how they’re going to sell the Amero to the United States public.”

I hadn’t watched the market in my entire life. There was a week in 2003 when I tried to learn day trading from my dad, but that had little to do with the trend of the market and everything to do with holding a position for a few hours and betting that it would either go up or down. You bet correctly, you make money. You bet incorrectly, you lose it. Same as any other market bet, but it had to do with very small segments of time. Watching numbers like the Dow is just not something I’d ever done. Until last fall. Now I check money.cnn.com every day, or at least a few times a week, curious to know how low the number is going to get. 8600 was suggested as a place where it would find support. Now it routinely bounces between 78-8200. and frequently stays below 8000.

The financial headlines are almost routinely dismal. Someone comes in and offers some Obama-style Hope and the market perks up. Forty-eight hours later some new job loss report comes out and the market just plunges back down… Right now it is 7694.

So if that doesn’t put me in Doomsday mode enough, I have also been fueling my skepticism with my regular perusing of Michael Ruppert’s Peak Oil Blog… which I’ve come to call “my favorite Doomsday Blog.” Like most non-sociopathic people, I hope the Doomsday scenarios prove wrong. That there will still be a consumer economy next year.

Peter, a good friend of mine from Antioch who knows a lot about currency exchange and who’s been watching this subprime crisis hit the wall for a lot longer than I have and with a lot more background on the subject than I have, has been feeding me lots of links and data and informed skepticism about my Peak Oil Doomsday conjecturing. He weighed in recently with this New York Times article discussing whether the banks were insolvent or capable of recovery “when” (ie “if”) the economy turns around. The Huffington Post posted an article that asked a similar question — is the problem with the banks one of liquidity or one of insolvency? (And if it’s one of insolvency, how long should the government ie taxpayers keep throwing money at it and pretend like the problem is “one of liquidity”?)

The majority sentiment of Americans of all political stripes right now seems to be, “I have a liquidity problem, too, and no one in the government is beating a path to throw money at me.”