I am the Media - I'll let you know when we have an Economic Recovery

The Standard and Poor's Index yesterday gave notice that they are changing the rankings of the United States as an investment:. (S&P sounds alarm on US debt - By Robin Harding and James Politi in Washington and Michael Mackenzie in New York)

The agency kept America’s credit rating at triple A but for the first time since it started rating US debt 70 years ago, cut its outlook from “stable” to “negative”. A negative outlook means there is a one-third chance of a downgrade in the next two years.

The Hound has shown the momentum that our nation has been in for the last several years and it is not good. I believe in accountability and if I could see signs that I was wrong about what has been called a recovery by our government and their supporters in the Mainstream media, then I would be glad to admit that I was wrong. Who seems wrong today?

I choose not to ride shotgun on the Titanic. I'm getting in one of those lifeboats, because I did not cause this economic catastrophe that we are in and it is not my job to put on a smiley face and sing kumbaya as the water fills my nostrils.

I am not saying that all is lost. This is not the end of the world. It is however time for us to recognize that we have a major malfunction happening with the economy. Gold does not run to $1,500/ounce and Silver does gyrate to $43/ounce because people suddenly have decided "Gee those shiny objects are neat." They have multiplied in value, because the world recognizes that there are major inherent risks associated with the United States Dollar and its stability, which had earned it "Reserve Currency" status is gone. This exponential growth in prices of hard assets and commodities comes from the fact that investors just don't have faith that the Powers That Be in the United States know what the Hell they are doing!!!

The worst part is that some of those people, who are investing in other interests in a so called "Flight to Quality," are the same people who have helped cause the problems that we currently see with our economy. Instead of trying to shore up the problems we see with the systemic issues we face with our economy, they are knocking people out of the way to get to a lifeboat themselves. The problem is that the Global Lifeboat they are trying to get into is going to be pulled down in the wake of the United States' Colossal Economy.

The problems are simple to assess, but the remedies are going to be tough, and they will be tougher the longer that you fail to heed the warning signs. 1) The Global structure set up the last two decades-plus has been a failure and needs to be reassessed. 2) We have systemic fraud that has been built into our economy that has become top heavy to the point that even though it is a relatively small part of the economy in size it has a huge impact on the scope of the big picture and it has permeated every crack and crevice of the financial aspects of our economic and social structure. It is time to get real about accountability and justice related to what we have seen with the financial state of our economy. 3) It is time to realize that the viability of this nation rests upon the focus of the well being of the nation's citizenry as a whole. We cannot have a robust economy, much less a recovery, by focusing on the fat cats at the top of the food chain, while allowing everyone else to sink to the bottom and languish.

It is time to get past the Left-Right paradigm that has choked the governance of this nation. And those are not just words. I mean what I am saying. I remember someone that I care deeply about buying into Obama's speech the night he was elected. I told her that she didn't even know what she was talking about. That all he was chattering about was grandiose superlatives that had no direction. Well, needless to say that conversation went nowhere, because she was emotionally invested in Obamamania to the point of Obamagasm.

Obama has always spoken in such generalities that his minion attach their personal desires and ride some wave of personal euphoria towards what they desire for his teleprompted words to mean. Folks, Obama is as much a puppet as Howdy Doody. He is an empty suit. Where has he shown intelligence? He has no personal convictions or core principles. He is only a vessel, a conduit, for the people who control him. The mad scientists who are polluting this world, poisoning us, and who are ruining our chances of living peaceful, fruitful, and sustainable lives. Objectively, one has to admit that this Presidency has been a complete and utter failure. What has he been successful at? I guess being a NCAA Bracketogist in Chief? Blowing money this nation doesn't have on jaunts for himself and his family?

I don't say this to support what the Republican Party is doing. John McCain would have been no better. He is a progressive too. One minute he is for Immigration amnesty and the next he is against it and then he is for it again. All centered around Horse Race politics. He voted for the TARP bailout, after initially saying he was against it, of the "Too Big too Fail" Financial Institutions.

When the GOP talks about shared sacrifice, they don't include the Fat Cats on Wall Street. We need them to be untouchable mega billionaires so that they can tinkle down on us and we should all be subservient and feel blessed to receive crumbs. Most of the Republicans still believe in the low tax, trickle down policies that have been an abject failure. There is always an argument that lumps the upper middle class making a couple hundred thousand dollars a year in with those making $1 million, $10 million, or multiples of that per year. It has become abundantly obvious that the mega-rich are not creating jobs in this country. If they were, then we wouldn't have U-6 employment of 17.1% , only 45.4% of the people of this nation currently holding employment, and stagnant wage growth.

In order for our nation to move back towards a viable economic system, these issues will have to be addressed. We are going to have to see the Opportunity Playing Field become more level once again. This will only be done by stopping the Least Common Denominator attitudes towards the middle class that pervade the mindsets of our so called leaders.  We cannot cut costs to achieve prosperity. Revenues have to be part of the equation, not government revenues, GDP. We have to grow the pie and get the Economic Engine built upon the principles of Ingenuity, Innovation, hard work, and perseverance built back into the system. We must reward good and punish bad. And we need to protect the interests of the United States within our own borders and get out of these foreign entanglements created by these never ending wars.

When we do this, then we won't need used car salesmen posing as politicos to sell us a lemon recovery. The recovery will be undeniable and it will sell itself. If you have to run around telling everyone that we are in a recovery, then it's not an economic recovery.

Economic Stories of Relevance in Today's World -- April 17, 2011

Simon Johnson Explains "What The Banks Did To Us" And Why "Seriously -- Goldman Sachs Can't Fail" - Business Insider - Courtney Comstock | Apr. 11, 2011 - "What's the public loss? Larry Summers said from this podium yesterday that the TARP money would be repaid from banks and that's probably true, but that's not the cost. Is it 8 million jobs lost? Is it a 6% fall in unemployment and we're still 5% down below the peak? Is it the increase in net federal government debt held by the private sector in the United States?


In Financial Crisis, a Dearth of Prosecutions Raises Alarms - New York Times - By GRETCHEN MORGENSON and LOUISE STORY - April 14, 2011 - It is a question asked repeatedly across America: why, in the aftermath of a financial mess that generated hundreds of billions in losses, have no high-profile participants in the disaster been prosecuted? ...

As nonprosecutions go, perhaps none is more puzzling to legal experts than the case of Countrywide, the nation’s largest mortgage lender. Last month, the office of the United States attorney for Los Angeles dropped its investigation of Mr. Mozilo after the S.E.C. extracted a settlement from him in a civil fraud case. Mr. Mozilo paid $22.5 million in penalties, without admitting or denying the accusations... Historically, Countrywide’s bank subsidiary was overseen by the comptroller, while the Federal Reserve supervised its home loans unit. But in March 2007, Countrywide switched oversight of both units to the thrift supervisor. That agency was overseen at the time by John M. Reich, a former banker and Senate staff member appointed in 2005 by President George W. Bush... Robert Gnaizda, former general counsel at the Greenlining Institute, a nonprofit consumer organization in Oakland, Calif., said he had spoken often with Mr. Reich about Countrywide’s reckless lending... “We saw that people were getting bad loans,” Mr. Gnaizda recalled. “We focused on Countrywide because they were the largest originator in California and they were the ones with the most exotic mortgages.” ... In a January 2010 memo, Brad Bondi and Martin Biegelman, two assistant directors of the commission, outlined their recommendations for investigative targets and hearings, according to Tom Krebs, another assistant director of the commission. Countrywide and Mr. Mozilo were specifically named; the memo noted that subprime mortgage executives like Mr. Mozilo received hundreds of millions of dollars in compensation even though their companies collapsed... However, the two soon received a startling message: Countrywide was off limits. In a staff meeting, deputies to Phil Angelides, the commission’s chairman, said he had told them Countrywide should not be a target or featured at any hearing, said Mr. Krebs, who said he was briefed on that meeting by Mr. Bondi and Mr. Biegelman shortly after it occurred. His account has been confirmed by two other people with direct knowledge of the situation...

A year later — with precious time lost — several lawmakers decided that the government needed more people tracking financial crimes. Congress passed a bill, providing a $165 million budget increase to the F.B.I. and Justice Department for investigations in this area. But when lawmakers got around to allocating the budget, only about $30 million in new money was provided.


Former JPMorgan Executive Llodra May Face SEC Suit Over 2007 CDO Marketing - Bloomberg - Joshua Gallu and Jody Shenn - Apr 12, 2011 - The SEC has been probing whether JPMorgan, the second biggest U.S. bank by assets, and Steffelin’s former firm, GSC Group, misled investors about hedge-fund Magnetar Capital LLC’s possible role in selecting underlying assets in the $1.1 billion Squared deal, according to a person briefed on the matter who spoke on condition of anonymity because the probe isn’t public... The probe is part of the SEC’s wider investigation of how banks packaged and sold mortgage-linked investments as the housing market unraveled in 2007. The agency has targeted firms at various stages of that process, ranging from loan originators such as Countrywide Financial Corp., to underwriters including Goldman Sachs Group Inc. (GS), which agreed to pay $550 million last year to resolve claims it misled investors in a subprime-linked CDO.



Goldman Traders Tried to Manipulate Derivatives Market in '07, Report Says - Christine Harper and Joshua Gallu - Apr 13, 2011 - Company documents show traders led by Michael J. Swenson sought to encourage a “short squeeze” by putting artificially low prices on derivatives that would gain in value as mortgage securities fell, according to the report yesterday by the Permanent Subcommittee on Investigations. The idea, abandoned after market conditions worsened, was to drive holders of such credit-default swaps to sell and help Goldman Sachs traders buy at reduced prices, according to the report...  Goldman Sachs traders abandoned the short-squeeze attempt after discovering on June 7, 2007, that two Bear Stearns Cos. hedge funds that specialized in subprime-mortgage investments were collapsing. Salem e-mailed Swenson and another colleague to suggest trying to buy short positions, known as “protection,” on collateralized debt obligations, or CDOs, from hedge fund Magnetar Capital LLC, according to the subcommittee’s report. 


IMF warns US to make a 'down payment' on deficit - Richard Blackden, US Business Editor - Apr 13, 2011 - The US should make a 'down payment' this year on tackling its budget deficit, the International Monetary Fund has warned, as it emerged that the world's biggest bond investor is shorting the country's bonds... "Without attacking entitlements - Medicare, Medicaid and Social Security - we are smelling $1 trillion deficits as far the nose can sniff," Mr Gross (Pacific Investment Management Co (Pimco)) said in the firm's monthly outlook.



More Americans leaving workforce - USA TODAY - By Dennis Cauchon - April 14, 2011 - Only 45.4% of Americans had jobs in 2010, the lowest rate since 1983 and down from a peak of 49.3% in 2000. Last year, just 66.8% of men had jobs, the lowest on record.... The bad economy, an aging population and a plateau in women working are contributing to changes that pose serious challenges for financing the nation's social programs... "What's wrong with the economy may be speeding up trends that are already happening," says Marc Goldwein, policy director of the Committee for a Responsible Federal Budget, a non-partisan group favoring smaller deficits.


Corrupted!: 5 Shocking Examples Of Government Corruption That Will Blow Your Mind - The Economic Collapse Blog - $38.5 Billion In Budget Cuts Is Really Just $352 Million In Deficit Reduction? ... The Federal Reserve Sent Billions In Bailout Aid To Millionaires and Billionaires In The Cayman Islands ... Mitt Romney Declares That He Will Not Be Going After Ben Bernanke Or The Federal Reserve ... Nancy Pelosi Declares That "Elections Shouldn't Matter" ... 6 Year Old Girl Molested By The TSA

Economic Secession by Jay Adams

This nation is dealing with issues that are quite remarkable. Our economy has been severely compromised by the policies of the past which have restrained the ability of American labor to compete in the global market place, created debt that simply cannot be repaid within the context of our existing economic capabilities, nurtured an entitlement class that resolves with violent intent to preserve its 'nouveau rights', a fourth estate that has largely abrogated its fundamental responsibility to act as a counter to political mischief and a religion that has targeted our nation as the 'evil' that must be cleansed from the earth.

This represents quite a daunting scenario, but the most insidious and perhaps greatest threat is the loss of control of the Federal Government by the people. Government is spending at a rate that is simply disastrous according to many credible economists, but there appears to be little that can be done in the context of the American political system as it functions today. I am contemplating an abstract method of regaining control. It involves a concept of 'economic secession', that is a departure from the economy that operates exclusively on the US dollar. There is evidence that this is already underway.

As this is written in the spring of 2011 I have observed that Utah has adopted a policy of allowing taxes to be paid in precious metals and North Carolina legislation has been introduced that would create an intrastate currency. This is an indication that some folks are concerned that the US dollar is in peril and rightly so. (This is confused by the fact that people like Robert Reich and Paul Krugman claim that the concern is misplaced and the National Commission on Fiscal Responsibility and Reform appointed by, and ignored by, 0bama; chaired by Erskine Bowles and Alan Simpson say we are in a crisis situation, and in spite of the overwhelming evidence there is still a debate).

In this confused environment it is a daunting thought for a state to set up a credible currency and maintain it in a manner that preserves its integrity. However, the Federal Reserve is in the process of ruining the credibility of the US dollar and against that backdrop, perhaps there is a way of creating an improved means of trade on a local level. First off, I don't see a single state pulling this off, but perhaps a state that is well resourced like Texas might. However, a coalition of states might form under a set of stated principals. This is where things get interesting…..

Our country is deeply divided between Blue States and Red States (Left and Right). There are a small group of 'purple' states like NC that tend to switch back and forth. This proposal would establish criteria for states that wish to participate in a 'Red State Currency', if you don't meet the criteria…you use the US dollar exclusively. The criteria would, in effect, establish a set of principals that are felt to be economically sound. Much like other governing documents this 'Declaration of Economic Principals' would be similarly modified by the participating states. Through this exercise the participants would blend recognized Constitutional governance with a set of Economic Principals that focus attention on the essential activities that create and sustain a sound state in the economic sense. In the context of the 'red state'-'blue state' dynamic, this would be a unilateral action.

Of course the Federal Government would react very vigorously to block such an idea. No doubt the Feds would use all manner of tactics such as withholding all manner of Federal funds. So this plan would have much to overcome and must be developed in such a fashion that the component states are, in effect, more powerful than the Federal Government! Is this possible? Well the 'economic state of the union' is composed of many states like California, Michigan, Illinois, New York and others that are effectively bankrupt. There are other states that are troubled simply by the Federal mandates they must fund. If the relatively healthy states, which tend to be 'red' states, ban together would this coalition not be more economically healthy than the 'whole'?

If states were to follow Utah's lead and recognize precious metals as currency and establish a method of preserving and regulating the use of same, how will the public react to this option? If the public should embrace this "new currency" how will the Federal government react? Since the Federal Reserve is a separate entity, how would it react? How would such a move be regarded in the global economy? I am not an economist but I would think that countries would see this as an attack on the US dollar, although an internal one. This could weaken the dollar in their eyes and might erode its desirability. But how would the global economy view the emerging currency? How would the speculators react? I wonder about these things… and I am seeking illumination… Help me!

This concept might accomplish another needed action. Our country is deeply divided philosophically with regard to the purpose of government. On the Left the Constitution is openly rejected as a governing document (except when it serves their purpose, for example, the ACLU, ACORN, etc.). They use the notion that the Constitution is over 200 years old and is no longer completely relevant to the operation of a contemporary government. It is fairly clear that the Left is moving toward a global government and there is certainly a growing effort to position the US for that merger. I won't enumerate the events that suggest this as fact, but at this juncture the evidence is abundantly clear. This concept is extremely divisive to those on the Right (that are paying attention) and as more evidence emerges it has the potential to polarize the nation in a way that is truly hard to imagine. It appears that the Left is fully aware of this and is attempting to create a circumstance that effectively "springs a trap" rather than allows a decision. This isn't going to work… there are many folks on the Right that see the "light" and are going to shine it everywhere. The Left is pretty clever but they are not nearly as smart as they think (They 'deem' themselves intelligent). The Right must patiently overcome the guile of the Left. This proposition may create a useful counter action to the efforts of the Left…

By actually promoting a form of "economic secession," through the adoption of state by state economic principals, the states that adopt the fundamentals of conservative fiscal policies would strip away many of the entitlement programs required by the Federal Government. By weaning themselves from, or minimizing the use of, the US dollar the states could establish programs that use the "state currency" and theoretically disenfranchise themselves from the US dollar. This is a reversal of the mechanism I observed when my alma mater, The Citadel, was required to accept women because the school had accepted Federal funds. In my proposal, if The Citadel were to (in some form or fashion) operate without US dollars it would regain its autonomy as would all other entities that are under the gun of the Federal government through the poisonous use of its money. Of course this would be a compelling reason to use the "state currency".

Using the premise that this would segregate fiscally conservative states from the more liberal states, over time this would tend to 'move' the more liberally minded folks to the blue states and the more conservatively minded folks to the red states. As this occurs the red states would develop a "cultural fabric" that would be quite different from the blue states. Perhaps this might result in highly developed arts and culture in the blue states and more business development and wealth accumulation in the red states (which would no doubt, lead to more artistic endeavors and cultural development). In my opinion this would "segregate" the states along economic ideology. Segregation is ordinarily considered a bad thing, but in effect this would allow a form of "free market" for each philosophy.

What we have today is a Federal Government that has abrogated its responsibility to maintain a credible currency. There are a variety of arguments with regard to the Federal Reserve's actions and policies. Because of the uncertainty that has resulted in the circumstances of the past decade there have been calls for auditing the Fed or outright elimination of the Fed. Many believe that the US dollar on a trajectory toward collapse in the global marketplace. My proposal offers an alternative method of trade that would originate within the various states but may be extended by reciprocity or other agreement to allow some interstate use of an alternative currency.

This concept would, over time, create a competitive environment where the policies that govern the use of the US dollar would have to compete with the policies of the "state dollars". If the blue states have entitlement programs that require relatively severe redistributive tax and fee structures, the businesses and residents of those states may find a more favorable environment in a 'Red State'. If a person or business sees value in the entitlement programs of a blue state rather than the more Spartan programs of a 'red state,' they would go to the more favorable environment. As you can see this would uncouple the existing mechanisms within the Federal Government that transfer wealth from 'red states' to 'blue states' and, moreover, consolidate the citizens that embrace entitlement policies from folks that rely on and embrace free market policies.

This proposal may appear fanciful, but it is certainly less radical than the outright secession that some contemplate. The Federal Government is out of our control and it seems that our political system is incapable of coping with the economic reality we seem destine to realize. What I have proposed here is not a 'sweeping plan' to restructure the present economic system, it is intended to be an incremental 'movement' that will create economic pressures to clarify policies that are sustainable, and illuminate policies that are not, to identify economic realities with regard to health care, defense, unemployment insurance, minimum wage, building codes, workman's compensation, highway construction and all of the myriad of activities that state and local governments fund with the Federal government as the "rich uncle" that picks up the slack. Rather than continuing the academic debate this proposal creates an environment where these practices can be tested in the real world at the individual state level.

A state may elect to adopt a completely "lean and mean" profile of nearly pure capitalism, while another chooses a package of governmental amenities that provide various levels of support and services, while another may choose a higher level of services. If the state can provide its "package" at a level of efficiency that keeps costs at an appropriate level, that state will enjoy economic success. If a state cannot operate as efficiently it will have to change its practices or reduce its services. Over time the state will achieve "equilibrium" that matches its natural features (coastline, weather, natural resources, available infrastructure, cultural amenities, etc) with the underlying "cost of operation". In effect this would "re-boot" the economy/culture, which is better than outright "destruction & creation".

Of course there would be monumental 'push-back' to such moves and I am surprised that the Feds haven't taken exception to Utah's legislation regarding the use of precious metals. Recently a gentleman in NC was found guilty of (I'm not sure of the charge) manufacturing coins made of gold and silver. The judge even remarked that he was a 'terrorist' for producing these coins. Apparently the fellow gave notice to all of the agencies he could identify that he intended to do this without objection. He then produced something like $7.5 M of these coins and folks began buying them and using them for barter. The Feds have now found him guilty of something and now they want to confiscate the coins!

So, the Federal Reserve is printing money that has no intrinsic value and we use that money for exchanging value. The Feds are reducing the value of those dollars every day they print more of them. A person creates coins that are made of 99.9% pure gold and silver to be used as barter and he is a terrorist….. what is wrong with this picture?

This is intended to pique your imagination…. Whatdayathink?

The Train that hit us in 2008

Shell, I know about the political conspiracy aspect of your outlook, but answer this for me:

M = money supply, V = velocity of money, P = price level, Y = real GDP Assumptions:
* V is constant
* Money has no effect on real variables (so ΔM has no effect on Y)
* Y is entirely determined by the fixed stock of labor, capital and technology

Note that each side of the equation equals the Nominal GDP (including the inflation)

If the the money supply times the velocity of money = the price level times the size of the real economy , why did the Federal Reserve not do right thing when credit seized up and quit spending money (ie velocity slowed requiring an increase in the money supply to keep prices from falling or the economy from contracting or both). And if the money supply, BmV=PY (where B is the monetary base, m is the money multiplier, V is velocity, P = price level, Y = real GDP, and PY = nominal GDP) showed that the velocity and money multiplier fell like the proverbial t**d in the well, why come  Bernanke ain't the man. Peace HH

Harry,

The money went to the banks. There was a bubble. It began with the 1990s and the internet revolution and then the growth and speculative stocks that bubbled up and burst. There was a lot of pent up demand associated with those stocks and people invested and took a beating in late 2000 when Enron and various other stocks were thought to be cutting edge at that time and were found to be fronts for fraud.

That Tech Bubble along with the 9/11 should have put us into a deep recession, but the Fed decided to create this liquid money paradigm. Banks were allowed to use less and less reserves to make loans. When I was in school we were told that is was imperative under the fractional reserve system that banks hold a 10% reserve on capital deposits. That means you can loan 90% out. That is a 9 to 1 ratio. During the Real Estate Bubble, Banks were keeping around 2% of those reserves and loaning out 40 to 1+.

Then you saw the end of Glass-Steagall and I thought that was good, because in school we were brainwashed that this would be good. But what we failed to realize is that regulations and fiduciary responsibilities would be ignored and manipulated and the banking system would be turned into a rigged casino.

The Derivatives Financial Instruments related to this situation were the Collateralized Debt Obligations and Credit Default Swaps. Those are what took down Bear Stearns and Lehman Brothers. Money and Capital were created by those enterprises and all of the enterprises that were associated with the mortgage bubble. It was trillions of digital dollars of convoluted money that was traded in the markets and it was basically fraudulent, because there is essentially no paper trail, because of how these instuments were divied up and traded multiple times. That is what the fraudclosure and robosigner issue is about, because mortgages are supposed to be secure instruments. Do you understand secure. Don't you hope that your mortgage is secure and that you are paying your mortgage fee to owner of the mortgage and they are properly recording it.

When the housing boom slowed and the more risky borrowers started defaulting, then Bear Stearns had trouble and they were going to have to eat the CDO's and it was hundreds of billions of dollars, but they didn't have that much in assets. Henry Paulson let them go down and it caused a cascading effect, but much of this was hidden by the surging oil futures game going on in 2008. When Bear Stearns went down it started pulling money out of the system, because all of these Financial Institutions have tentacles in one another, they are invested in one another, but this was hidden by the money in the economic system related to petroleum resources and energy, but that wasn't sustainable and people were having a hard time meeting their mortgages, because they overpaid what the market would bear for their houses and they hadn't taken into account the need to have a cushion in case the economy slowed. 

The United States has become a consumer based economy. So you saw a further cascading as the economy slowed down, because energy was eating a huge chunk out of individual household budgets. And this money was going to the oil companies and the government and not staying in people's pockets for them to invest as they saw fit. This further slowed down the economy, because people cut down on driving and participating in the marketplace. What did that do to the velocity of money?

So all of these banks and investment houses had been buying oil futures and CDO's and both markets collapsed under their own weight. That pulled money out of the system at a rapid rate. That created negative velocity of capital, because all of these financial institutions were invested heavily in these derivatives. they couldn't loan money out, because they were racing to meet their obligations on all of the derivatives contracts. So the Fed and the Treasury conspire to race in and shore up these banks by essentially paying these obligations with fresh digital money.

Remember TARP was essentially created under the auspices of helping mortgage owners to meet their obligations, but a few days after it was passed, Paulson gave the money to the banks for capitalization. It was so that they could use it as a revolving door on these derivative contracts that they needed to purge from their books, but the problem is that they can't, because there isn't the demand for these toxic assets.

So basically that is what the Ponzi system is for. M3 is the entire amount of all money in the U.S. Dollar system and the FED has created all of this for financial institutions to use at basically 0% interest (which is a negative lending rate due to inflation) for a carry trade and to make profit off of it with the hope that they can eventually make enough profits to cover the toxic assets that they need to purge from their system, but I don't think that is even possible, because in the end these assets are worthless (and continuing to deteriorate) and all they are doing is creating a capitalization bubble and that will eventually pop too. Because when the inflation really kicks in, then interest rates are going to have to rise, causing our nation's debt to spiral. A debt, by the way, that has been exacerbated by all of this digital money. Then after the Ponzi scheme collapses, there will be a deflationary depression the likes of which the United States has never seen.

Currently, these financial institutions are playing in the markets buying tangible assets (food, energy, precious metals), because as you can see they lost their @$$3$ on the convoluted derivatives. This monster is feeding off of itself and it isn't going to stop until the people that perpetuated this are brought to justice and the toxic assets are written off, which is what should have happened to start with. We can do this now or wait until the total economic collapse and by that time the crooks will have left the country and be holed up in some guarded community in the Grand Cayman's, while we deal with the wreckage.

And they definitely need to separate holding companies from financial institutions again, because people need to have a stable, reliable  place to put money they need for necessities (mortgage and current living expenses).

Whew!!! Don't make me do that again!

Peace,
JTS

April Rant - Governance (Link)

I had started the article on governance before the Bobby Lutz article so it is chronologically listed before that article, because I did not cut and paste it into a new form. So that this article is easier for those to find who have come straight to The Hickory Hound, I have listed it in the link that you can click below.

April Rant - Governance