The US House of Representatives passed a cap and trade bill yesterday by a slim vote. The bill was watered down so that most of the stiff taxes from the bill will occur 10-20 years from now.

I dont’ think this will matter too much. First, since it barely passed the house, it will likely fail in the Senate, since the Democrats will need a 60-40 margin, and many moderate democrats are against the bill. Second, since most of the legislation’s stiff guidelines do not occur until later, there is a good chance they will never actually be implemented, and some sort of other legislation will prevent this bill from putting the economy in a tailspin.

Our idiot president claimed it as a jobs bill, saying it will create a ton of green jobs, just like Spain’s cap and trade bill did. Spain’s unemployment is now over 18%. For every ‘green job’ it created, it destroyed two regular jobs due to the taxes and inefficiencies created. Splendid.

Over the past couple of weeks, not much has occurred. Economic data has been about expected. Bond yields started soaring but have since retreated some. The S&P 500 can’t seem to break through 950 and is at 910.

Most believe that we are not in a deflationary spiral, but some believe we are just going to be flat from here on out. There are others that believe a wave of inflation may take over. There is also the risk of a double dip recession, which may just be similar to being flat.

I don’t think we will have robust economic growth, as the Obama administration expects. Because of this, I foresee huge budget deficits over the next few years, and I don’t think the market will look kindly to it. Thus, I think there is a risk for a double dip recession or perhaps inflation, since I think there’s a good chance the Fed will monetize things.

I don’t think it will take too long for this to happen…we’ll likely see some sparks fly by next year.