Although many electrifying Senate Tea Party candidates such as Ron Johnson (WI), Mike Lee (UT), Marco Rubio (FL), Rand Paul (KY), & Pat Toomey (PA) won on November 2 there are still many areas of America such as California that may be hopelessly lost for the rest of our lifetimes. California is illustrative of a place where BO can say "my work here is finished" as indicated in the above photo.
California will never vote anything but Democrat again after this last election as the principles of Death Of Democracy continue to strangle their citizenry who just don't know better. The most powerful election principle in America is not the Independents swinging mindlessly back & forth between the two major parties but rather it is the principles of Death of Democracy as people become accustomed to receiving relief & welfare checks & becoming ever more dependent on government & accordingly voting Democrat from that point on - for instance there are currently 42 million people receiving food stamps up by over 13 million people in the past two years. Who do you think these people will vote for when they are organized in future elections? Think this is not per BO's design?
California elected a decades long state-wide politician in Jerry Brown as Governor & reelected Barbara Boxer to her fourth term to the Senate despite California's budget deficit reaching $42 billion, 1.4 million productive people out-migrating from California during the last 10 years, unemployment being the 4th highest in the country, having the worst credit rating falling below Louisiana's, having the second highest foreclosure rate, & having the governor threaten to furlough over 20,000 state employees. California has the highest rates for both state sales tax & income tax in the nation & yet they vote for more of the same.
Now not just California but the entire country's finances are in terrible shape & we can't blame the Chinese who are merely taking care of themselves - something you would think you could take for granted we would be doing for ourselves. China now holds over $880 billion in treasury securities & Japan is right behind with $865 billion.
The People's Bank of China (PBOC) intervenes in currency markets to peg the value of the yuan to the dollar. As dollars flood into China buying their exports the PBOC holds onto the dollars & buys treasuries rather than taking the dollars & buying the domestic yuan which would make the yuan appreciate. China has accumulated a massive $2.6 trillion stock of U.S. dollar assets which is larger than the dollar assets on the the Federal Reserve's balance sheet of treasuries & mortgage backed securities.
Now I say you can't blame China but you sure can wonder what the Fed is doing planning to buy $600 billion of long term treasuries between now & June 2011. The idea is to lower long term interest rates via the increased demand of these purchases but this theory forgets that the $600 billion will tend to increase inflation (@ least expectations) thereby raising interest rates. Alan Reynolds writes about the "contradictory objective of higher inflation & lower bond yields" when he says "the whole notion of simultaneously raising inflation & lowering bond yields presumes bond buyers are docile fools...Why would domestic investors accept a lower yield on bonds if they expect higher inflation."
You can sum this up by watching this link of a Chinese professor speaking in Mandarin Chinese (with English subtitles) in this 1 minute video to see who is laughing last & best.