It saddens me to have come to the conclusion that the citizens of this great land remain clueless. We listen to the Secretary of the Treasury and the Chairman of the Federal Reserve and actually believe what they say. We watch the “Goldilocks” cheerleaders on CNBC and hang on their every word. What can be done to startle us out of our coma, shock us out of our numbing complacency and recharge our run-down brain cells?
Folks, the American financial system is broken. The 19 largest investment banks continue to inhale and exhale only because they have been invited to go begging at the Federal Reserve’s begging bowl. Hedge funds are waiting in line with hope in their hearts for their turn. Fannie Mae and Freddie Mac, who together buy or guarantee 90% or five trillion dollars of this country’s mortgages, are technically insolvent. To keep them breathing, the Federal reserve and the U.S. Treasury, with a little help from the morons in Congress, are providing them with unlimited funds. Don’t forget, after all, that Fannie and Freddie are the biggest lobbyists in town. While it might be fun to distract Boobus Americanus by blaming short sellers for the plight of these noble institutions, the truth of the matter is these corporate entities are being rewarded by their friends for having engaged in blatant mismanagement and obscene greed.
But who do you think is going to pay for what could turn out to be a trillion dollar bailout? That’s right, we are. The American taxpayer. If it isn’t through increased taxes, then it will be done by the printing presses. Inflation is a monetary phenomenon. The more dollars you print, the less each is worth. And the Federal Reserve, in a desperate attempt to avoid a systemic meltdown, is creating paper dollars at NASCAR velocity. It’s important for us to really understand the reality that there has never been a paper currency backed by nothing at all that has ever survived. All have been destroyed by politicians and central bankers through the mechanism of inflation. Today, the intrinsic value of the U.S. dollar is zero.
Time is running out on protecting ourselves from what’s coming down the road. As the saying goes: “better put your affairs in order.”
08/05/2008
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