09.18.07
Posted in Old Posts at 11:57 pm by Administrator
September 18, 2007
By John Galt
I would like to congratulate the absolute brilliance of putting an academic in charge of our nation’s economy. I was not sure what his academic qualifications were, but I did do a search to see if he wears his Romper Stompers when he makes policy. The logic of today’s decision and coordinated efforts to convince the sheeple that the U.S. dollar would rise in the face of these interest rate reductions was so will conceived, so contrived and so utterly unbelievable, that the bubblevisionistas did everything they could to sell this for the last few weeks and advising folks to buy financial stocks. Up until today, I would have called this advice suicidal. In reality, it’s not going to help. Dr. Marc Faber, Jim Rogers, and Nouriel Roubini all stated the honest to God’s truth today that this will not help our economy nor do anything to stave off a recession. With this, I am here to make a very sad, bold, prediction:
Dow 15,000 Sooner Rather than Later
In my opinion, not due to the strength of our economic fundamentals, but due to the creation of a hyperinflationary economy, we will see Dow 15,000. With that, I would buy the champagne, party hats and ingredients for the CNBC celebratory cake now instead of waiting. In about three months, all of those components will probably be about 15% more expensive, and that’s when all of you should be very, very, very concerned. This is not going to help the housing markets. You can not create more buyers in a depressed market even if you cut the interest rate down to 1.25%! People are out of money. Jobs have been and will continue to be lost. The idea that those poor souls who are about to be evicted will sacrifice their dinner, medications or necessities for their family is absurd. The average person is no longer able to carry more debt much less qualify for it. The banksters got what they wanted, enough of a break to insure they can play at the casino with our money for one more, maybe two more quarters. There will be two more rate cuts this year and it’s feasible that we will end up with a Fed Funds target around 4.00% by year end or in the first quarter of 2008 at the latest. The reason is simple and does not take much to figure out. Ben likes his new chair. He loves this position of power. He smiles when he sits in it, presses a button and banksters all run into the room all giddy with their hats in their hands begging for money. The choppers will need a major overhaul after today, and the American consumer is about to find out that the solution to a banking crisis is far more severe than just letting their local neighborhood bankster fail.
The New Cartertocracy
When I made the mistake of pressing the button for George W. Bush in 2004, again, I never realized that the mistake would come back to haunt me. The end of his Presidency will be marked as a mirror image of 1979, with the inflation rate to skyrocket, the world to look at us as a weak, pitiful power, and commodities to cause such serious problems to our economy, whoever gets elected will be inheriting a nightmare. I hope she’s up for it and Ben better keep reducing rates or she’ll whack him with a PMS purse load of misery.
The actions which our current economic and political administration(yes, that’s Democrats and Republicans boys and girls, no exceptions or favorites here) have created since 1999 will result in such a violent contraction after we hit Dow 15,000 it will be beyond reproach. Yes, we could easily experience a stock market crash with a sudden bank failure, but I think the day of reckoning has been postponed again. The wars are not going as something predictable as we are looking weak and floundering, oil is skyrocketing, Russia and China are on the rise, and Latin America is becoming a major problem for us. Sound like 1978? Yes, but I am talking about today, this very minute, and to make matters worse everyone sees our weakness. We owe the world trillions of dollars and it will not take much to make that figure double or triple in the next year or two. What President Bush has done in just eight years is allow his administration, this Congress and his appointee to head the Federal Reserve to recreate an eerily similar to the late 1970’s. Welcome to the Cartertocracy, a world where your pay will decline, your food and gas will skyrocket in price, and the nations of the world will look at us with disdain as a “former” power. This is the perfect environment for a disaster where a war is started elsewhere in the world and we are unfortunately in the middle of it because we are over-deployed, over-extended and bankrupt.
Mr. Bush, James Earl sends his thanks. History will not be kind in this regards when it judges the last eight years. The 1970’s were a living hell for so many of us who remember that time. For those of you who missed the fun, have no fear. The era of Carterism has returned, just in time for Christmas. And as our phony currency pumps the phony market indexes to new high, just remember what the groceries cost you today and in six months. As the champagne gets poured with the Dow 15,000 celebration, don’t choke on the bitter taste, but savor it. It’s not every day you get to witness the rebirth of a Republic.
The Weimar Republic, Carter style, that is.
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09.17.07
Posted in Old Posts at 4:32 am by Administrator
By John Galt
The following is an editorial and an opinion. It may or may not happen. But as of the date I finished this, and stopped editing, it is my best guess to answer your questions…….
There is a question, an email, which I receive on an almost daily basis which is the question that gave me inspiration for this editorial. While current events are so unstable, so unpredictable, and appearing to head into a grave new phase of war and financial disaster, the individual who has heeded the warnings about a fiat economy will survive, although the type of civilization they wake up to might cause a deep pause in thought. The “what’s next” is not a question about market activity, but that is quite predictable from a long term macro viewpoint. The real question in my book, yet unanswered, is what will be left of our society. In that, let’s try to answer both questions and not lose our sanity in the process.
“Luxuries are a necessary part of life”
And with that quote National Public Radio gave an update on Friday September 7th in their business segment from a young lady who obviously has never had to really work a day in her life or do without. I can speak from personal experience. I remember the days in the early 1990’s when the bills were tight and money was hard to come by. You learn to find interesting ways to spice up cans of Spaghetti-O’s and other canned pastas just to keep meals from getting totally boring. Luxuries are food, water, shelter and the ability to make an acceptable living for your family. The concepts that the citizens of this era have put forth as “necessary” are contributing causes to the steep decline as a society we are facing. It is not a requirement to own a video game, own an impractical vehicle or eat at luxury restaurants while wearing designer clothes at least once per month. The fear that I hear, from those who get their hands dirty for a living and just try to earn an honest day’s pay, is that once again those who have the money and power are making mistakes which will destroy their lives. These people try their best to exist and provide for their families yet they too have been caught up in two decades of the “Lifestyles of the Rich and Famous” mentality and have often over extended themselves to get a little bit more for their families. Keeping up with the Jones’ has proven to be an expensive proposition, even to the point of bankrupting more and more families at a record pace. Sadly, many of those that rushed to bankruptcy before the laws changed in 2005 are right back where they started. The promises of an ownership society are about to be reversed as the con games the banksters created start to implode. How did we reach this point? Just listen to the words of NPR’s business chick from this section above and think. We’ve perverted the concept of living with what we can afford and need and turned it into a consume at all cost society. How does this impact the very people participating beyond their means? That’s what’s next.
Dominoes
The dominoes started to fall in 2005, yet few saw or heard the first crash. The excesses we created with a speculative real estate boom were just a hint. The credit bubble was the validation that we had a problem and this puppy wasn’t going to have a happy ending. As the banksters got nervous, they proceeded to do what banksters always do: expand their personal profits and fortunes at all costs so they would be protected when the jig was up. The nightmare concept of marking investment products to a computer generated fantasy was both profitable and easy. The sad part of this is that it has all been done before. Back in the late 1920’s, investment trusts were created which basically consisted of baskets of investments, be they stocks, bonds, whatever and their valuations were artificially created and supported by the banksters and investment houses of the time. So when the zenith of the housing bubble was in plain sight, instead of contracting the issuance of garbage, now as in 1929, the banksters expanded their offerings at a frightening pace, all premised on the idea that the economy will never contract and that the government would bail everyone out be they consumer or bankster to prevent a geopolitical and economic disaster.
Whoops.
As the domino of speculation got larger, smaller ones started to fall. The small business community noticed it first and the impacts were hitting them harder as this year rolled around. The banksters thought their idea of loaning to every creature with two, four or one thousand legs that can fog a mirror began to unwind in 2006. The first domino to fall, as usual, was the independent subcontractors who helped build all these homes. As the sales started to soften the builders and developers did what they always do: Stop paying the little guy on time. This of course has triggered electricians, plumbers, drywall installers, roofers, cabinetmakers, etc. starting to pay their suppliers later and later and eventually not at all. This of course triggered layoffs at the suppliers as money started to get tight and the smaller suppliers started to falter and are in the process of restricting their sales to cash only customers or go out of business. This made it harder on the subcontractors who went back to the builders demanding more cash up front which of course forced them to demand more cash up front from developers, which forced them to get larger loan packages from the banksters with higher interest rates to account for the risk of default. Needless to say, we have witnessed quite a few defaults. Now these dominoes in and of itself seem harmless. It’s isolated to the home building industry and didn’t really seem to spread, right? Uh, wrong. The people who were losing money started cutting staff immediately. The subcontractors who were not paid started laying off help. The help started looking for jobs which paid a similar level and could not find work. This meant that “luxury” purchases were being put on hold or notes on previous purchases were made later and later or not at all. This means that instead of upgrading fleets or buying a new personal vehicle, these souls could not. Which begat people stopping their purchases from car salespeople to cause them to stop eating out and buying flat screen HDTV’s; which begat restaurant workers having difficulty meeting their rent or mortgage payments causing more headaches for real estate investors or banks; which begat also employees at big box electronic stores doing the same; which begat even more investors leaving their homes and fleeing the state to avoid arrest warrants for fraud or to file bankruptcy across the nation somewhere else; which begat more layoffs in industries everywhere else where they had anything to do with the supply, financing or building of anything with a roof on it. Which mean that those people who got laid off started to miss car payments, credit card payments and mortgage payments. Which meant that more people stopped going on vacation which triggered more layoffs. Etc, etc, etc.(No offense meant to anyone with all the “begats’ but it seemed to be the right term) See where this is leading? The interdependency and collapse we are witnessing in the U.S. domestic economy nationwide is impacting not just the nightmare states of Arizona, California, Colorado, Florida, etc., but hitting the other states slowly but surely. As what little manufacturing starts to wind down due to contracting demand, the so-called service economy will contract at twice the rate. Who needs more pizza delivery folks if the orders are down? Who needs more loan processors if fewer loans are being issued? Who needs more librarians, park workers, firemen, or garbage men if the population is leaving the town as they abandon their foreclosed homes? It does not take a rocket scientist to figure out that these dominoes were going to fall. But the biggest dominoes, the ones that will crush so many people are in the process of falling now, and it’s all tied back to a historical series of mistakes that once again, we did not learn any lessons from and have elected to repeat again this time with more style and flair. And unfortunately, these same or similar mistakes this time are being repeated with much more dire consequences due to the current structure of our banking system and currency.
Demise of a Fiat Nation
Yes, you can rest assured my fellow readers that I’m going to blast the Creature from Jekyll Island one more time. The decision in 1973 to move our economy to a Ponzi scheme was no accident but certainly has invited a series of financial accidents to occur. The elimination of a fixed valuation for the U.S. dollar is coming home to roost in just thirty-four years. What? I’m not going to preach about owning gold, silver or platinum? If you’re so stupid to have not figured that one out as insurance for the tumult about to hit, well, I can’t provide you with a pass off the stupid bench. The idea that a group of private individuals, who manage our economy outside the rules and regulations of the government by the people, will finally implode and in,oh, such a grand fashion. There are many people who will state openly that this is a deliberate attempt to destroy our nation and create a new economic system. There is quite a bit of circumstantial evidence to support this idea. The horrifying part is the reality that we have in tangible evidence that a lot of the problems from the super cycle of greed and avarice are just plain groupthink stupidity initiated by the banksters to extract the wealth from other segments of the population.
So what is next? As far as I can see the currency of the United States of America, that’s right the almighty dollar, is toast. The view from the average American citizen is that as long as their widgets at Wally World are affordable, it is no big deal. The central banksters have been desperate in every aspect of their actions for the last six months, but JSP (Joe Six Pack) has been in denial. Why is this so important and what have the banksters been up to? The banksters wanted to do two things until they could figure a way out of this mess. First they wanted to maintain an appearance of a status quo in the overall world economy. This was to keep the consumer consuming and do to the consumer what they just did to the hedge fund investors (more on that shortly) to the average schmuck. The problem with this theory is that JSP no longer has the credit availability he once had, nor does the lack of job security inspire the average person to go out and risk their future by buying a car, expensive electronics or huge purchases on their credit cards or other financing plans. The very banksters the central banksters attempted to con were the ones who said “uh, no” to the consumer nation and started tightening despite the daily pump the volume figures posted in Fantasyland and Bubblevision. Once the dollar dives, and good old JSP realizes that his grocery prices have increased some thirty plus percent this year (and in reality soon, over fifty percent) then the horns will be pulled in for good and we can all look for an extremely disappointing Christmas retail system. Not that it was going to be all that great anyways since every toy on the market has been recalled thanks to the former American jobs being outsourced to China because they do a better job with lead paint than we did. The nightmare for the retailers is upon us, and they have no clue what is about to hit them, the double whammy of a scared consumer worrying about losing their home and job along with inflation beginning a surge unseen in a capitalist society this large.
To add to the misery index, with all and no apologies to James Earl Carter, the “Intersections” I wrote about several months ago are about to cross. The misery is not so much an identifiable single entity. But if you look at the history on an economic and geopolitical scale, it is quite obvious that 2007 is one of those “7” years where too many things just happen to coincide and cause problems for the long term. But alas, the masking with prescription drugs, alcohol and televised fantasies have kept the majority from realizing that if a nuke went off next to their house tomorrow; it really happened and was just a new edition of “Extreme Makeover Home Edition” so they kept on keeping on, without realizing that following the investment advice of their friendly neighborhood broker was doomed to destroy their futures. Ah well, there is some black humor to be found in this nightmare. That is in the second part of this nightmare.
Soon you and I (the average schmuckolio) will soon realize that it was not just us that was taken to the cleaners. Alright, maybe not so much myself, as I bailed out in 1999 and started buying silver coins then in mass quantities when my wife gave me permission, but more so much those who believed that Cramer and Bubblevision would never lie to them. The issue about to hit in an absolute tidal wave is that the markets since September 11, 2001 have been built on not just lies, but damned lies. You see if you think about it, we should have and really probably would have gone into a recession in the spring of 2002, yet the political powers in charge refused to allow the flow of nature to progress because after all it was an election year, and attempted again, in a foolish interference to interrupt the business cycle. So instead of a normal, healthy cyclical downturn to flush the excesses out of the system we elected to postpone the day of reckoning and try to make this last until 2008 when another party was due to take power. No one soul can dare tell me that either political party would not do the same as they both are so full of their own obsessive compulsive desires to impose their own bizarre versions of neo-socialism upon out nation. But gaps, “how anti-Kudlowvian of you” some of you shriek; keep in mind that this very bubblevisionista is one of the greatest proponents and cheerleaders of government manipulation and preservation of the status quo where the Federal Reserve insures the maintenance of a limited supply of quasi-capitalist banksters and industrialists who support whichever party maintains a grip of power on this nation. The problem is, which has just happened, is what happens when those in charge make a mathematical error and 2+2 no longer equals 5.75999634? That’s right, we have pandemonium. Well, welcome to the world of pandemonium plus condominium which means that the central banksters can no longer fund the pandoconominium craze and the worst part is the lack of understanding as to what that means. The idea was that by creating an “ownership” society, we would all be or feel obligated to making sure the banksters and elites would grant us, the lowly serfs, a plot of land and enjoy what we received by paying tribute monthly to the banksters and annually to the political elite. That theory is so superior, and so difficult to destroy in a period of moderate economic growth that the last three years far surpasses anything that even the average JSP could have imagined. The idea of exporting the United States manufacturing base and importing below standard wage grade labor to maintain inflation below the norm created a growth model that many never imagined possible, but those commodity based nations realized that in the very near future, it would end violently and with a loud “thud”. The idea that any nation could export over fifty percent of its primary manufacturing capacity for consumers and still exist as a creditor nation became not only foolish but obvious in the 1990’s. This theory was salvaged by the concept that software and entertainment “production” would forever keep America as the leading nation in the world until it was discovered that “gasp” other people in the world could and would actually develop not just software but hardware at a lower price and at the same rate of innovation if the capital were applied. So what if we counted two all special cheese patties with sauce, buns, and whatever as a “manufactured” item, as long as we counted it, we were a manufacturing nation. This nonsense that America would not only survive but surpass the world because we could provide better customer service, Big Macs, and manipulate data better than the old Soviet Union was promulgated not once, not twice but throughout the education and financial systems to the point where infomercials were accepted as the most valid form of financial education. And that is when many of us historical skeptics figured out that the game was up. To this date, I have never believed nor heard of any “system” where you purchased a seminar or DVD for $189.95 and in three months became a millionaire, yet this belief, this fantasy, is still being promoted. My God people; wake up; there is no shortcut, nor easy way, and no feasible manner to manipulate a fiat currency into permanent wealth. All fiat currencies fail. Period. End of that conversation. So what is this great “second” revelation that I wish to promote, theorize or discuss? Easy. Bubbles pop. Period. We, the greatest experiment on earth promoted a system which allowed a small group of anti-capitalists, in other words the denial of free market economics, to maintain a currency in the denial of the emotional desires of the economic ebb and flow. The Great Depression of the 1930’s so scarred these souls that the ultimate banksters desired to manage and manipulate the dollar, the pound, and any other currency they could to the point that they would usurp the desires of the citizens and if necessary encourage the implementation of force to insure their goals. The challenges presented by the Soviet Union’s communist ideals created an inflationary zeal which culminated in the great bubbles of the 1980’s and 1990’s which ultimately destroyed the enemies of freedom but in the same process addicted the banksters to their own power of monetary creation and manipulation. The central banks of the world actually felt that they were the king makers and breakers, yet also felt it was their Biblically ordained duty to determine what was politically expedient and just to maintain their pragmatic view of the world. The question few dared to ask, and always forgot to consider was what happens when they were wrong? What happens when the proverbial “powers that be” make a mistake presuming that people will forever enslave themselves to a world of debt, ingratiation, and servitude to maintain a lifestyle where the latest video game is more important than freedom, the spirit, and hope? The “powers that be” have overplayed their hands. This event is not unique to human history. It has happened again in our past, back when the Roman Empire felt that snipping the valuations of their currency, sacrificing their soldiers in the expediency of political gain, and demeaning the morals of their society for political contentment would satisfy the needs of the populace. Sound familiar? The expression “been there, done that” does nothing to justify today’s date, time or feelings. We have surpassed the excesses of Caligula’s Rome, exceeded the wildest fantasies of Caesar, and indulged the high priests far beyond that of temple masters of that time. The historian’s view of today is no different than that of Gibbon’s view of Rome; we have seen the enemy and it is us.
The demise of a fiat nation is neither pleasant, nor desirable. There are numerous talk show hosts on the airwaves now who speak nervously of Jefferson’s commentary about watering the Tree of Liberty with the blood of Tyrants, yet few will take that call and lead the nation to freedom again. Our nation is on the precipice of flowing through the watering can once again, and these same hosts speak in riddles that this can not be allowed to happen again. Yet few understand the implications of what is happening now. More on that and it’s implications in the end of this treatise. It is time now to review what cost the banksters will impose upon us as the fiat nation fails. And why.
When the Banksters Fail
The concept of fractional banking is not a new one, nor is it new that it fails miserably. The ideal that America, due to it’s own internal wealthy, would never allow it’s system of banking to fail is both comical and sad. The modern generation has never actually been educated on the numerous failures in our economic system. The 1837 crash, that of the post Civil War period, the 1893, 1907 and other disasters are considered those of the “primitive” days of America and the only period worthy of review is that of the 1930’s because there are still some survivors of this period. Sadly, the fiasco upon us is neither conceivable by modern average citizens nor that of the banksters running the system now. The gray hairs and wizened words spoken on the mainstream media are considered the elite and sound phrasings of a group of elders who know “what’s best “ and not for debate nor debunking because they know how to run our nation. Yet the failures of the CEO’s, the political elites, and worst of all the neighborhood banker to manage the economy on any scale has created a nightmare which is almost as bad as the loss of faith in the very moral instruments which kept our nation superior to all others. When the banks stop loaning to banks, the rest of society will collapse. That is what our society is beginning to witness now.
America was founded on the predication that all those entrusted with the citizen’s belief in the “will” of the good would not steal, lie, or disrupt the flow of goods, services, or soundness of our economic system for personal gain outside of the moral and just defined bounds we were created upon. This theory was violated early in our birth as the founding fathers could not even begin to conceive of a non-monarchial system of capitalism as the concepts of free trade were beyond the grasp yet the ideal of a decentralized government was the mainstay of our initial thrust into freedom. Alas, two hundred plus years later, Hamilton would cry as would Jefferson because of the actions of the left and right. We have squandered the opportunity to create a nation of independent banking, free trade, and industry in exchange for the concepts of “stability” and the redistribution of wealth to insure the political tranquility of the masses. This failure to realize that all of the concepts endeared by Woodrow Wilson, FDR, and the leaders of this nation since that time are conflicting and confrontational will result in the ultimate demise of our nation. So what does this have to do with the ATM fees at your local bankster you ask? Simple and sorry, to the point is what I must be now. In the “olden” days, the local bankster secured a mortgage by knowing the customer and sharing the risk with this individual be it a business or residential loan. This concept was not that far fetched or irrelevant as it insured the “citizen” requesting the loan have some degree of success or ability to maintain, profit, or fulfill the terms of this loan that would profit both parties in the long term. This idea was shot to hell in a hand basket over the last decade for the expressed purpose of keeping a small group of elites in control of the entire proverbial “free” world and enhancing the pyramid scheme of witch is imploding before our very eyes. As long as the local, regional or mega-national bank was able to create money and profit off of the backs of the business community or individual without the penalty of the government skimming too much off of the top from either party, this nation would thrive on the Ponzi scheme of multiplying the prime numbers over and over again until ultimately the percentages reached obscene levels and they would be invulnerable to the natural ebb and flow of business cycles.
Ooops.
The concepts of “human emotion” and “logic” escaped the formulae because the charade became more important than the profit and the profit became the charade. This fictional enablement was endorsed by the governments of many Western nations to enhance the political power of the ruling elite not to create the illusion of “wealth” although that was a side effect, but to insure that the capitalist system became a socialistic interdependent part of everyday life, so both parties created and maintained power at all costs. These costs included war, recession and bankruptcy of the lower and middle classes to debase and weaken the political dissent within those parties and guarantee that the individual would rarely be allowed to achieve much beyond the parameters or rules that “they” set. The individual was to be relegated to the role of serf, and the serf to be the contributor of the greater power by the creativity being confined within a system which disallowed free will. The free will of the individual was to be manipulated by managing the economic and moral systems to prevent such freedom as to allow any person, any company or any nation to become superior to another. This concept was first conceived in the 1960’s yet the implementation took decades to implement. At this time, the freedom to create, to develop and enact a new invention, ideal or capitalist concept is so regulated, so downgraded, so diluted that the free will of man shall forever be vanquished until the next era begins.
So why do the banksters want to bankrupt Western society; to establish the new, the ultimate, in hybrid capitalism under “their” terms. The “experiment in Communist China is a success in their view. So a few dogs die. A few kids get cancer or brain illnesses due to lead poisoning. So a few humans die making toys in a gulag. It does not matter. The circle, the cycle is complete in their eyes. The desire to implement a socialistic society of the elite, where free markets no longer reign must be completed. To re-establish a society where the ruling elites, much like 8th Century Europe controlled the serfs, is the ultimate goal. Where capitalism is paraded as a “method” rather than a system of free will and creation. God did not intend for man to be a static creature. His will was that of a free willed character which created, enhanced and expanded the world beyond the bounds of nature, but within the rules of morality. This expansion is now over in America. And the price we shall pay will be huge on both a physical and moral scale.
Thus how the hedge funds shall be allowed to collapse. One can not just extinguish the great wealth created in America overnight. The penalty of leverage going down is ten times if not more than it is on the upside. The citizens are now being begged, via infomercial and brokerage to “dare to expand” for higher returns and investment purposes into vehicles which are neither guaranteed nor explained in logical or free market terms. The expansion of the hedge funds and their parameters were taken off shore for a reason; much like your friend declaring “jokers wild” after all the cards are dealt and exchanged at drunken Friday night poker game. The rules, freedoms and finances are deliberately fluid so as to always insure the house wins. And now the house has lost and is seeking more players to keep the doors open. Godspeed to those that walk in to play and calculate that there is a logic, reason or fair set of rules for their game. Those who dare play shall lose, that is a mortal lock, maybe not in the short term, but definitely in the long term.
Results of the Failed Experiment
Okay you wordy freak, what is your message here, you may ask. The answer is simple, and I’m letting my thoughts flow throughout this writing which I had intended to complete weeks ago, but the views keep expanding and the terror keeps intensifying. The people who now fall behind, who lose their homes, and lose their life savings due to the mischief of the banksters will soon be looked upon as “losers” or “financially ignorant” by those in the mainstream media so as to lessen the impact of the degradation of our economy and society. After all, the people who quit looking for employment are no longer viewed as “unemployed” but viewed as a blip and ignored by the creationist powers of our economy. The real numbers no longer matter, as long as the “feel good” numbers create a false confidence in the direction. This means when the banks start failing, those that were “stupid” enough to have their money tied in with a losing proposition will not be viewed upon sympathetically, but mocked and derided for being financially ignorant, despite the promises of FDIC insurance and the prior assurances by Bubblevision that the bank would earn a profit of six cents per share this quarter. Are you starting to grasp the propagandistic slant that is about to hit us? There will be no “failures” only incidents. The real failures will be masked by huge power plays which will be called “strategic acquisitions” and labeled as “positive events” to “enhance” our economic system, even as the US dollar index crashes into the sixties. The Dow might well hit the 15,000 mark in the next year thanks to the currency degradation and resulting hyperinflation, but if you as a proverbial Polly thinks this is positive, then I have some land to sell you in the Gulf of Mexico as the tide rolls out. America can only survive as a mirage as long as other nations can or will play along. That mirage has gone “poof” and our enemies, and their allies, have figured this out. The question is how long until the experiment which has failed hits home; when the average American citizen realizes that a bank run is not a 10K charity event but a necessary evil of self preservation. Until the average soul spends forty percent of his take home pay on food will it hit home. The humor is only black and bleak from this point forward because the destination of this commentary only goes further down a black hole of hopelessness as I do not see a future for our nation to emerge from until after the year 2020.
The Cost of Failure
Most Americans, as in the 1930’s, will not notice anything different unless they are laid off or lose their homes or the lights do not come on when the switch is hit. The infrastructure, already deteriorating, will be the first thing to go. Once the utilities start to fail, the new administration will insure that the “trains run on time and the lights stay on” as the first goal of her administration. This damning commentary on just how shallow a desire we have as a nation for creature comforts over freedom will hit home and quickly. My namesake and the writings of Ms. Rand shall come true, as the producers, myself included, will go on strike. There will be no desire for the truly industrious, the freedom lovers, to contribute to a hybrid Soviet economy to insure the “greater good” of the American people on the backs of the few. The oil industry will fall into a nationalistic fervor of state sponsored domination as will the natural gas, electric, and water utilities to insure the “people” have what they are “due” for their survival. This is just the beginning of our bleak future. One can not dismiss this ideal as the radical left has long fantasized about this becoming the norm and once the economic structure implodes on itself, the banksters will collude with the political powers to enable such actions.
The next cost will be in that of the inventor, the idealist which stimulated this nation’s economic engine to the next level. No longer, as is already happening, will the individual be allowed to create a new concept or machine and profit it from it without the state’s approval and profit. This extraction of capital from free will stifle creativity and force the state into a neo-corporatist state dominated scientific boom which will make the idealism of the Soviet Union look stimulating by comparison. We will regress. It is inevitable with the political mindset we are acquiring and desiring as a nation.
The major failure which will result in a French style of socialistic fervor will be the mortgage implosion, which as of the date of this article is only twenty-five percent under way by my estimation. The solution which will be imposed in 2009 will be harsh by any standard. The government sponsored enterprises (GSEs like Fannie Mae and Freddie Mac) will be enhanced to absorb the largest of failures and expanded to purchase every liar loan and losing money proposition to keep investor and family alike from losing everything. The desire to keep the illusion of prosperity, even after a crash, alive and well will prompt actions unthinkable by rational capitalist souls. The FDIC will acquire banks like we buy groceries, FNM and FRE will “acquire” companies through central bankster sponsored LBO’s which will be funded at taxpayer expense. This requires a monetary expansion far larger than that of even the Great Society days and the FDR wet dreams, which will forever cripple the dollar and leave the precious metals as king and queen of the economic day. Not only will the GSE structure be limited to the finance arm, but she will propose and succeed in creating a new GSE group for the management and acquisition of failing homebuilders to insure the average “citizen” does not lose their “American Dream” in the process. So how does this new economy emerge? There are two aspects which indicated the degree of our failure and the expanse to which we will venture into to preserve “stability for the greater good” a phrase we will become endeared to in the years to come.
The Bill is Due, so Pay it Later
The cost of failure is pretty black and white; our currency must die. But it will not die in the traditional sense of a currency failure, the creationist aspect of our currency will live on, it is the free use of this currency which must die. The management of day to day usage is the ultimate goal of the new elites. A free currency, that which is based on gold, silver, commodities or even under the 1913 Federal Reserve mandate of fiat fantasy will be considered the ultimate compared to the future we shall face. To preserve the base valuations of our nation, the ability to manage not the currency itself but it’s usage by not just the citizens but the banksters will become the most paramount goal of the political elites. The concept that a group of bankers controlling the economic future will be shifted from the Federal Reserve and moved into a hybrid political group that will be empowered by the new political powers. The blame for the Great Economic Depression of 2008-2009 will be slammed into the banksters and the paradigm power shift will cause other nations the world over to shudder at the results. The sheep in the mean time will do whatever it takes to insure their retirement programs and cost of groceries does not get any more extreme than it will be during the brief hyperinflationary depression which is about to ensue. The political powers in charge will impose such draconian measures that the markets may crash further, but the penalties on the average citizen diminished not by market forces, but political mandate. To insure proper management of the pricing structure, the government will begin, in this writer’s opinion, a new feature of currency management which other banksters the world over will duplicate as soon as possible. Gold, silver and other precious metals will achieve astronomic valuations as these new policies are implemented, yet the powers in charge will attempt to impose price controls on every commodity in the world. The government under the new administration will impose a national sales tax of five percent on all cash transactions. This will serve a dual purpose. The first is to penalize the “black” economy which is estimated at over one hundred billion dollars as of now in this nation. The best example is if you attempted a one hundred dollar cash deposit into your local bank, you will be docked a five dollar fee for “cash handling” to process the transaction. The next phase will be to implement a five percent national discount on all purchases for those who use credit cards, debit cards or the proverbial new “magnetic stripe” economy which shall emerge. By finally steering Americans and other nations into a digital currency regime, the political powers and central banksters can finally reign in the unbridled growth of unregulated monetary expansionism at will and tax all members of society at will. Imagine going to your local grocery store and the sign “no cash transactions on Tuesdays” being hung in the window. Is that too far fetched? I think not and it’s coming gang. The hyperinflation then can be “managed” at will and when price controls are implemented those who still participate in the physical fiat currency concept will be penalized the most while those who volunteer for the magnetic strip society will be able to purchase goods and services at will, despite their diluted value. The taxes and discounts will be manipulated over the years to come until eventually physical ownership of the fiat currency becomes illegal or irrelevant. If that is not an endorsement for the Constitutionally mandated currencies of gold and silver, I do not know what is.
The End of Pax Americana
The ultimate result of this reversal of our founding father’s American vision, and that of so many of us who grew up with the hope and prayer’s of America fulfilling it’s prophecy of hope will sadly be the end of the great period of peace and tranquility as it exists relative to now. The naysayer might look at me with a jaundiced eye and say “do what” as we fight wars in Iraq and Afghanistan; with troops in over 150 nations worldwide; and with our borders wide open inviting a new attack. But this reality is much like that of the Roman Empire before the great decline. Rome would have survived but the moral fiber was not there. Are we that much different? Ask Brittney Spears or Paris Hilton before giving me your answer.
History, as I have stated before is a cyclical animal where intersections occur in the waves which cause greater variations in the norm. We are in the midst of one of those great intersections. The individuals, who are prepared for this great event, be it a decade long or century long occurrence, will flourish. The sheeple, as some of us like to nickname them, will be much like the street vendor selling lamb as the Visigoths rampaged through Rome right before they were beheaded. Their motto is they never saw an ostrich they did not want to emulate. Well, the ostrich, much like the dodo bird will not survive this new era. The Pax Americana is about to end and as such will do so with great violence and upheaval. Nations which we, the proverbial skeptics, once saw as stable will fall and others we saw as “primitive” might well become dominant in their regions. It all depends on how the cards are played and laid. There are four events I can foresee which will occur here before the next twenty years are over and most are sooner rather than later which will mark the end of the Pax Americana:
- Domestic Terrorist Events
- Regionalized military conflicts
- Systemic economic failures
- Internal U.S. Political Crises
The last event, being a historian, shall be the most fascinating and terrifying to endure. The internal political crisis which shall be a result of the other three events will result in one and only one ending:
A United States Constitutional Convention
The implications of this are mind boggling. But due to the submissive nature of our society, the willingness to go along to get along, I see no other path. The economic implosion we are participating in will result in the four events that will happen sooner rather than later. I hope for everyone’s sake that all of you, and I mean this, will forever be measured in your responses. The nature of our society is so different, so immoral compared to that of our forefathers and parents that the changes we will be witness to and part of will change Western Civilization for hundreds of years to follow. Grab some popcorn. Buy some silver. And be prepared. This will not end peacefully. This will not have the “It’s a Wonderful Life” type of ending.
It will just end.
And you get to watch.
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