01.23.08

Bandaids for Shark Bites

Posted in Old Posts at 10:35 am by Administrator

Yesterday, as discussed here and everywhere else, the Federal Reserve abandoned it’s role of inflation prevention and elected to throw band aids to the poor soul who just had his legs bitten off by a shark with a “good luck” yell and a wave goodbye as they walked back to the lifeguard shack to party with the babes. The problem with putting bandaids on gaping wounds is the blood just attracts more sharks and they are moving quickly to destroy what’s left of our economy. Ignoring the excuses offered and fuzzy explanation given by the Fed yesterday, the real reason we saw this action was displayed in the article titled Fed rate cut triggered by fear of bond insurance collapse. This “real” reason for the rate cut did not do one single thing to improve the credit quality of the defaulting homeowners who are causing the underlying assets these insurers are on the hook for thus the derivatives time bomb only had the fuse extended, not extinguished. I warn all of my readers now not to take heart nor listen to the idiocy I witnessed on Bubblevision last night. The ever famous host of Win Ben Stein’s Money was screaming into my office last night the mantra “this is the time to buy stocks now, everyone should be buying” and I was screaming back “what a freaking #!&@, you’re still trying to steal the money from little old ladies!” This is the mentality of those isolated souls who do not see or feel inflation, who think gold should be used as hedge for their losses and not for yours, and feel that they know better so you had best shut your little peon mouth and do as we say.

The fact that we have a Fed which has abandoned it’s responsibility, the fact that we have a derivatives implosion underway and the fact that we have a totally imploded fixed income market seems to have missed the Bubblevisionistas radar screen. That was quite obvious when Cramer had his Tupperware party on television last night screaming that “he made” the Fed cut rates. These self-absorbed thieves have only one goal and until you understand that, you will be a slave to this new paradigm they’ve created: To separate you from your money. Understand that goal and you will find financial independence.

The wealthiest souls during the 1930’s were those that hid their assets, stashed away cash and refused to follow the bubble which was blatantly obvious in late 1928. In the article I posted from the October 15, 1928 issue of TIME titled Bull, Bear, Lion, Lamb , the most important sentence was from the head of the Federal Reserve at that time, Governor Roy Young:

“The Federal Reserve can’t earmark its credit. But it can help steer the credit ship. People must not expect the impossible.”

This statement applies today and yet the lessons of that time, the lessons of the mistakes under the Woodrow Wilson administration with the introduction of this creature, have yet to be learned. Keep that in mind as you prepare for the future. The central banking system is inherently designed to fail and once the dollar has finished it’s one hundred year decline to insolvency the options will be obvious to all. Unfortunately for the average American citizen the options include more bleeding, more dilution of their savings, and the ultimate end to the good times most have experienced in their life time.

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