ON THE BRINK

Fannie Mae and Freddie Mac own or guarantee 90% of this country’s mortgage loans. That’s a cool $5 trillion. And anyone who can read a balance sheet knows without a doubt that both companies are insolvent. Bernanke and Paulson may deny that inescapable fact, but they are not in denial; they are merely lying. That’s what governments and central bankers do these days. It’s become a way of life.

So here we go again. Another weekend is upon us, and the liars are going to have to figure something out before the markets open on Monday, just as they did months ago when faced with Bear Stearns’ imminent demise.

Regardless of how they go about saving the two criminal entities, you can count on the U.S. tax payer—–that’s you and me—–to have to bail them out. After all, as they like to say, Fannie and Freddie are too big to fail. And there are still other “upstanding” institutions waiting in the wings. Lehman Brothers is toast. Wachovia is floundering badly. We will be called upon again to pay the bill.

That should make you angry. It should inspire you to demand jail sentences for those who leveraged the mortgages of this country for their own personal and corporate greed. It should make you real mad that Wall Street, the Federal Reserve and our elected government choose to use mountains of paper debt to finance their agendas at our expense, which we will now pay out of our pockets in multiple bail outs of the guilty, economic stagnation and horrendous inflation.

Don’t ever scapegoat the speculators for the high cost of food and energy. You need look no further than Washington and Wall Street. The disgraceful monetary and fiscal policies conceived by those numbskulls have placed this country’s financial system in jeopardy. Until the citizenry insists on a return to a system whose foundation is based on sound, honest money as opposed to pieces of worthless paper debt and computer entries, this country will continue its plunge towards bankruptcy and irrelevance.

Finally, do you really think that Obama or McCain have the slightest idea on what’s really happening, much less how to fix it? They are politicians with no understanding of things financial. As President, and with what one of them is going to inherit from the impeachable Bush administration, why would either of them—–why would anyone—–want this job?

07/19/2008

THE CONSPIRACY AGAINST THE AMERICAN PEOPLE

We live in the age of conspiratorial capitalism. The Federal Reserve, the investment bankers, the highest echelons of Corporate America and the most powerful members of the Federal Government are all in it up to their eyeballs in a collusive scam  that views the American people as a bunch of adversaries and patsies. How do they lie to us? Let me count the ways.

Goldman Sachs, along with the other investment banks, sell predatory loans to investors around the world while the bank itself goes short the very same toxic loans. This all occurs under the leadership of Henry Paulson as Goldman's CEO. His reward is an invitation through the revolving door to become Secretary of the Treasury. The other banks, not as trade savvy as Goldman, get stuck with mountains of the worthless paper they created. Their reward is an unprecedented bail out by the Federal Reserve. Their brilliant CEOs are quietly retired with obscene pay packages while their shareholders and victimized investors are left to go down in flames.

The powers that be extol the virtues of free markets when in truth their fingerprints are all over the brokerage houses that trade equities, bonds, currencies and precious metals. They carry out their agenda in the paper derivative markets in broad daylight right under the noses of the so-called regulators. The stock market must be supported, as its demise, at the same time as the housing debacle continues, would be fatal. The long term bond market is allowed to drop a little in order that the spread between short and long term rates widens enough to allow the banks, which exist on the spread, to rebuild some of the capital they lost. But they can't let the bond market plunge because that would increase mortgage rates and thus intensify the real estate crisis.

The government publishes a phony Consumer Price Index every month which shows inflation to be under control when, in the real market, it is going through the roof. Food prices are up 89 percent in the last three years which has led to food riots all over the globe. Oil has quadrupled. So, unless you're one of those  unfortunate people who has to eat, drive your car or heat your home, the fraudulent "core" CPI should present you with no problems. That's the CPI the government uses to screw senior citizens out of their cost of living increase they legally deserve to receive in their Social Security checks.

The Federal Reserve is increasing the money supply at a 20 percent clip. Increasing the money supply is what causes inflation.

Perhaps the worst comes from the financial press. Every economic report and earnings announcement is given the kind of spin one would expect from a public relations firm on behalf of its client. Citibank only lost $5 billion last quarter and still has $60 billion of nearly worthless paper on its books ---" but that's better than we thought." So the over-the-counter derivative weapons of mass destruction problem must be nearly over.

Finally, none of the three candidates for president has had the guts to tell the country that it is essentially broke. Nor do they have the slightest idea about how to fix the problem. Instead, they tell the American people what they want to hear in order to get elected. Never mind the unfunded liabilities of $56 trillion in entitlement programs waiting in the wings.

The people got shafted in 2000, got what they deserved in 2004 and are living in a fantasy world in 2008. At least, someone should tell them the truth so they can take the appropriate evasive measures to protect their financial well being. The inflation being produced at this very moment by the central banks of the world will make what we've experienced thus far seem like a walk in the park.

04/22/2008