$7.4 Trillion
$7.4 trillion is the new number for the money the Fed has spent to solve the financial crisis. Naturally, I’m using the world “spent” creatively, since of course they didn’t have the money to begin with. I suppose “written $7.4 trillion IOUs” would be a more accurate description. And those funding the IOUs won’t do so for much longer. Asia is waking up to the fact they’ve been had. This is a lot of money, considering it took us 225 years to bring our national debt to $5 trillion (the number at the dawn of Bush Jr’s presidency).
Then again, it’s only dollars, whose value is established entirely by the Federal Reserve — in this case, not even the ink and paper it’s printed on, since most of those dollars won’t actually be printed. Right now, the value of the dollar is flying high. That’s due, however, mostly to the fact investors and nations around the world have had to sell things of value (oil, grains, metals) to get dollars in order to settle their bad debts, which everyone now has hordes of. This artificial value won’t last for much longer because ultimately, a currency is only as strong as the workforce and industry behind it, and, well… our industries are about 70% service-oriented (which means useless). In fact, the largest moneymaking sector of our economy was just that — making money by helping others make money, which is proving to be a very shaky profession when “money” is discovered to have questionable (or no) value by itself.
Ever think you’d see the day when the US went begging to the Middle East for money? How the mighty have fallen. Not that this is any surprise to the tireless bell-ringers who have been warning about our unraveling monetary system for the last couple of decades. In the midst of all this talk of bailing out the car companies, I thought this address before Congress from the last time we had to bail out an automaker was particularly relevant, though it’s from 1979. Ironically, the same person is still in Congress speaking out against the bailouts, and the company in question (Chrysler) is again in need of a bailout. Sigh.
A video of Peter Schiff, who was Ron Paul’s financial advisor, has been making the internet rounds. It’s great fun to see all the supposed experts puffed up on themselves and their secure system, mocking him for his dire predictions from a few years ago. I’ve come to realize the more arrogant and egotistical someone acts when deriding an unpopular opinion, especially on the news, the more likely they are to be completely wrong. Enjoy:
Today’s article of doom: Mayor of New Orleans illegally confiscated firearms from private citizens during Katrina (arguably, the one time people needed them the most). Foreshadowing of events in the future, as our economic “Katrina” hits?
$700 Billion? Try $4.2 Trillion For Bailouts
And you thought $700 was a disgusting, astronomical figure. But it’s deceptive. The actual cost of the bailouts so far is over $4 trillion. This is mafia at its finest. These banks are just sitting on the cash too; not lending a dime, which is what the whole bailout, crammed down cowardly Congress’s throats (against the will of the vast majority) was supposed to accomplish. Everyone wants a piece of the pie. Savings and Loans, credit card companies; even GE wants to be considered bank holding companies so they can tap that a… I mean cash. Heck, even some mayors feel entitled.
Today’s articles of doom: well, at least illegal immigrants who happen to be violent rapists are deported… not. Good thing this school district actively used fraud to issue other peoples’ social security numbers to grounds workers because they were too cheap to pay legal workers.
Bail Out Everyone!
Lots in the news lately, especially about how the 700 billion dollar bailout had tax breaks for banks snuck in to the tune of 140 billion, how the 85 billion for AIG wasn’t enough, nor the additional 38 billion, and now they need a total of 150 billion. Save the wealthy! The latest company to feed from the trough is American Express. We’re no longer even pretending to spend money on solvent companies. It’s a free-for-all for giveaway cash from the poor to the rich.
And speaking of insolvent companies, poor GM wants the government to bail it out too. Not because it will ever be profitable again, but because a lot of people might otherwise lose their jobs. Suddenly GM is worried about their employees losing their jobs, after years of drawing huge executive salaries, misreporting earnings, cashing out on stock options, reducing pay, pension, and benefits for existing employees, and laying off a bunch of others. Boohoo. We’ve been through this before — bailing out companies that were “crucial” to the economy. Like Amtrak in the 70s. And that company hasn’t turned a profit since. If GM were to die along with Ford and Chrysler, would that mean no cars would ever be made in the US again? No. Would it mean a new company would come along and do a better job? Yes. But here in the new America, failed companies aren’t allowed to fail. And better companies aren’t allowed to materialize.
And guess what? These ridiculous policies of ours as a nation are finally taking their toll. First and foremost, we’ll likely lose our AAA rating. That would spell disaster for the value of the dollar, which is the only thread left holding our economy together. Even the government managing (confiscating) our IRAs and 401Ks a la Argentina, which is on the Democrats’ agenda, won’t help.
Today’s article of doom: Federal Reserve refuses to tell us who they gave $2 trillion of “emergency loans” to.
Election Day, Sigh
Both Presidential candidates suck. Vote for Coke or Pepsi, it doesn’t matter. Both voted for the 700 billion bailout scam, both support the Federal Reserve fiat money fractional reserve banking disaster system. Both will need more funds for more battles and services. Both think the Constitution is a “living document;” in other words, completely redefinable. Both like the fact the government is the single largest employer in the nation and want to increase the role and power therein. Both candidates think having troops in 700 foreign bases is a good thing, and both are ready to pick a fight with Iran and Russia.
In other news, the day is fast approaching for mortgage bailouts. This will mean a lot of different things to different people. Will your taxes increase? Yes. Might you get a more affordable deal on your mortgage? Yes. Might the housing prices decline for longer than they otherwise would? Yes. Might you be tricked into accepting a recourse loan instead of your current non-recourse loan? Yes. Time will tell. If they’re going to bail out the banks, I suppose the socialism should extend to the homeowners. One thing is certain; it will affect a lot of homeowners being as 18% of homeowners owe more on their house than it’s worth. Here is Peter Schiff’s sarcastic article on that subject.
Maybe we’ll even have a credit card bailout. Wonder what stipulations the credit card companies, which might come out in support, will demand? I guess they figure half is better than nothing, especially if the government can pick up the rest of the tab. Pretty soon, the government will have to guarantee everything. Good thing their balance sheet is so stable!
Today’s article of doom: maybe that’s why the government needs to start deploying soldiers at home.
Crashing Down Now! 