Apocalypse Now

America, you are being had! You are being played like a tin kazoo. The AIG bonus babies are fleeing to the four corners pursued by IRS Suburbans as the 535 Washington clowns spout their phony outrage at $218 Million while they cover up their complicity at handing out $170 BILLION to Hank Paulson’s old bank and a collection of his European friends. The economic Keynesian national destruction continues in the beltway with the looting of the treasury led by Barak’s economic imbeciles. I wonder when the American People will wake up and realize that they are not citizens in a democracy but serfs of the Federal Reserve Banking Globalized World Government circa 1984. The latest news continues to worsen with the Fed Printing Reichsmarks at a torrid pace so they can buy more trash for cash from Freddie and Fannie as well as buying up Treasury Securities. It is a futile effort to stave off more asset price destruction and thus give the banks some breathing room , wishful thinking that these primarily real estate “assets” will stop losing value and finally these insolvent banks can resume lending and thus jump start John McCain’s American Dream. If I am reading Bernanke and the boys correctly, I think they still believe that the problem is a liquidity problem when it is almost certainly a debt problem. It seems so clear to a financial neophyte like myself. Why is it not clear to them? In the good old days of course the government would borrow to fund its deficit spending by peddling T bills to China and Japan to raise money but now it funds its deficits by buying its own debt to fund its deficit spending. Try to wrap your mind around that. We are living in a Keynesian Bizarroworld that even Jon Stewart cannot joke about. The CBO says the deficit will be more like $2 Trillion instead of a measly 1.75 as Barak promised. Oops. This rescue of the world’s biggest debt machine by yet more debt creation is insanity on steroids. The world is starting to think we are nuts. And they are right. The German Economics and Technology Minister was on PBS last night and he was at a loss for words when Paul Solman asked why Germany wasn’t spending more on stimulus like the good old US of A. European Industrial production fell 17.3% from Jan “08 to “09. Debt is imploding worldwide at the fastest rate in probably world history and Baraks bright idea for change is to create more debt? The dollar is dropping like a rock reversing a recent rise against other fiat currencies . The Administration is of course led by President Benanke and his Knights Templar at the Fed and they are well on their way to destroying what’s left of our economy printing digital money to buy up nearly worthless minimally negotiable mortgage securities to prop up a still overpriced real estate market. A 30 year mortgage of 1 % is too high if the house is overpriced. This will likely be the greatest depression of the last 150 years and the actions of our government by propping up insolvent enterprises is just delaying the inevitable rebuilding process and ultimately making it so much worse. We had massive asset price inflation fueled by the Greenspan Fed with banks leveraging their toxic mortgage “assets” and these assets are still dropping in value like a stone reverting to a true value and pulling the over leveraged bets and derivatives of financial institutions worldwide into a black hole. In the next year or two the American people will be needing money to eat and stay warm and where will the money for that come from? Somehow, SOMEHOW the American people need to grab these misguided greedy wall street bankers and their beltway politicians by the lapels and slam them up against the sheetrock and demand that they get it! It may take a French Revolution of sorts for that to happen but it could be closer than you think. The bankers and politicians have no shame, no guilt and they have destroyed the economic system of the world. In 1789 bankers and lenders were dragged from their mansions in France and torn to pieces by the mob. I would like to hope that our society has advanced sufficiently that this would not occur here but these folks need to be named and punished and the absurd spectacle of actually rewarding them really triggered a raw nerve in the lethargic mystified American public this week. I think this financial Armageddon could morph into a political Armageddon of retribution against the politicians and financial rogues who have so utterly destroyed America’s economic future.
There are far better ways to to mitigate this Depression than dragging bankers out of the Goldman Sachs Building and kicking their ribs in. Unfocused anger is potentially very destructive to a society and as imperfect as our political system is, it just may be possible to force our politicians to do what is needed. Here are my suggestions.
1. Force the banks and insurance companies and mortgage companies to do an honest accounting of their assets and debt. No bank can lend to another bank if they don’t know if that bank is solvent. Close them or nationalize them if they are insolvent.
2. Declare a moratorium on lending ANY more money to any financial entity, any commercial entity for a period of time, say 90 days. This will stop the rush mentality of doing something/anything(!) in Washington.
3. Stop foreclosures for 1 year. Offer the former inhabitants the ability to rent their homes at prevailing market rate.
4. End all collateralized debt obligations and regulate or abolish derivatives and hedge funds.
5. Capitalize solvent banks as needed and institute the same kind of banking regulations as were repealed by these same banking interests in the 1990’s.
6. End all business tax deductions for companies moving headquarters or production abroad.Have a national goal to return the US to a manufacturing economy.
7. Develop a crash program to provide a national transportation system of electrified rail, not high speed rail. Electrified Rail is a vastly cheaper and sustainable way to move cargo and people than our ribbons of asphalt and concrete with their short expensive life expectancy.
8.Nationalize Health Care like virtually every developed country in the world.
9. Bring our military home and close the 1000 odd overseas bases. Use our military to defend the country not defend globalized corporate interests.
10. Reduce energy consumption of all types by tax policy and conservation . Cap imported oil
use at a level similar to other developed economies. Most of the developed world use 30 to 50% of oil per capita as we in the US.
11. Barak Obama seems to be a diligent and intelligent president but he is getting horrific advice from a deeply flawed sector. Flood the White House with mail and email. Plant some doubt in his head that he just might be on the wrong course.Send mail to Michelle. She may whisper in his ear. If he is as smart as I think he is, he may yet figure out better options on his own.

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About cal48koho

I was born in Montana and raised in a dozen Air Force SAC bases. I attended Holy Cross,West Point and UNC in Chapel Hill(MD"71). Army doc in the last years of the Viet Nam fiasco. My wife and I live in a log cabin I built in Jackson Hole in 1975 when we aren't on our Cal 48 yawl. I've done a dozen different jobs and retired from ER and Anesthesia in 2004. I've written magazine articles and am writing a Kunstleresque novel about life in a past Peak Oil world. We are living in a beautiful alpine setting where we hike and ski when we're not thinking about economics and spreading the implications of PO to anyone who will listen.
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