01.22.08
Cleanup on Aisle 3
With Benron’s help, we staved off a massive decline which easily could have become anywhere from an 800 to 1000 point plus drop in the Dow which would have accelerated the inevitable instead of letting the disaster just happen. Instead, Ben wandered out to Aisle 3 out at the NYSE and said “let’s see if this helps the mess you made boys” and mopped up a little bit of the spill the banksters have created. The problem is that this did zero, zip, nada (notice I love that phrase in my op-eds) to fix the systemic problems that are inherent to our economy now. We are facing not just a commercial lending crisis which is unprecedented in our history, but we are looking at the prospect of a banking system freeze which isolates the consumer when they are most vulnerable. The ability of the consumer to refinance homes, buy automobiles, buy land, or finance major purchases is in doubt and only those who have cash to put a major down payment or a viable asset (Translation: Not an over-valued home appraised by the banksters who gave the original mortgage) to borrow against will be in a position to borrow money. Talking to my friends “in that business” this pretty much eliminates a large number of folks from obtaining sizable loans which will further slow down spending on large items and assets. That should guarantee more layoffs in the Rust Belt, more fictionalized manufacturing numbers and another reduction in consumer spending. Remember, this is the month that the birth-death model is reset so when the BLS finishes playing Donkey Kong with the numbers, we’ll see what the politicos have determined the lie of the day shall be.
What does this mean to us average schmucks who just like to prepare for the incoming onslaught? More unemployment. Less pay. More inflation. So this cleanup, like the last series was for one purpose and one purpose only: To bail out the banksters. The differences between 1836, 1893, 1907, 1929, 1987 and now are glaring but you can pick similarities out from each. The one consistency, sadly, is that our central banking system is failing us and will ultimately destroy our currency and leave us all with a mess to deal with culturally, politically and economically. As this week progresses, I will be offering commentary on what direction we are heading in. The screaming siren though of the trouble I see ahead from an inflation perspective can be displayed with this chart:
