Last week, Hank Paulson and Ben
Bernanke announced that taxpayers money would be
expropriated to bail out the bad loans of bankers. Despite the appalling scale
of greed, fraud and incompetence, that is the deal that is being rammed
through Congress as I write. I assume that outcome based on Congress' long
record of having the collective spine of a jellyfish.
The banks, by their actions,
have ensured that many people who could not afford houses were sucked into
the market. When the last person was in, housing prices started their
inevitable tumble. Prices are falling hard, and will continue to fall hard
into the foreseeable future. Those who are already underwater will soon be
underwater a lot further. Those who are marginal will soon be joining their
ranks.
A friend approached me today. The
dollar value on his house was $600,000 12 months ago. He had a $320,000
mortgage. Today his house is worth $300,000 and falling.
He has a perfect credit rating,
and has never missed a full payment on his house. His family is one of the
many that the current structure is penalizing in order to support those who
bought houses that they could never afford. He asked me what he should do. My
advice was to walk. There is no moral responsibility for him to continue to
pay people who have shafted him in such a manner.
Why
would anyone pay their mortgage when legislation is being drafted to make
non-payment acceptable? If responsible people who
didn't over commit are penalized for the actions of those people who did,
then the rules of the game are corrupt. If the rules of the game are corrupt
then don't play the game. If you do, then you end up as no
better than a banker or a Wall Street used CDO salesman.
Today in my in-box I found an
email suggesting that instead of giving $700 billion to the cronies of Hank
Paulson, that we should break it up and distribute the money to every adult
in America.
The email claimed that would be an amount in the region of $400,000 for every
man and woman in America.
That won't happen of course and for one very good reason.
The current system has collapsed
because of the inflation of the currency. The beauty of inflation for the
rich is that they are first at the spigot when the money is released. They
get it at full value and use it to send asset prices up and off to the moon. It
appears that the economy is booming. It's not of course, but it looks that
way to the true believers in the bizarre world of Keynesian economics.
How much inflation has there
been? From the signing of the Constitution right up until landing a man on
the moon the whole American experience, every house, car, television,
freeway, airplane, war... everything, cost one trillion dollars. Then
consider that the debt ceiling has been raised 2 1/2 trillion dollars just
this last 12 months. Do you see the value in that? Of course not; that is
because you didn't get it. The rich bankers and their Wall Street friends
that you are now being told you have to bail out got the lot.
By the time that the money
filters down to the poor suckers in the street, the prices of goods have
finally started to rise in line with the rate of inflation of the currency. The
pittance that trickles down to Joe and Suzy is never enough to cover the
higher prices caused by the full amount of inflation. Inflation ALWAYS causes
higher prices, but only after a delay. The delay is always long enough that
Joe and Suzy fail to make the connection between cause and effect. The
already rich elites get the money, Joe and Suzy get
lumbered with the bill via higher prices.
If Congress distributed the
inflated currency to the tune of $400,000 to every man and woman, then ON THE
SAME DAY that the money arrived, a coke would be $20- and it would cost $300-
to fill the car with gas. Joe and Suzy would instantly make the connection
between inflation and higher prices. In one day that would signal the end of
the greatest and most insidious scam that governments the world over play on
'their' citizens.
The inflation in America has
been greater than anywhere else over a more sustained period. That is why the
pain of higher prices will be greater here than anywhere, with the possible
exception of Zimbabwe.
Joe and Suzy Lunchbox must never be allowed to understand the inflation scam.
That is why cheques for $400,000 are not going to arrive in anyone's mailbox.
The rising grocery and gas
prices that Joe and Suzy are now paying are simply the repayments due on the
vast amounts already given to those first in line at the spigots years ago. The
repayments will go on for a long time. Beyond the life span of anyone alive
today. How high will prices have to rise to accommodate the infusion of $700
billion in new dollar bills (not counting the fact that it will end up as $7
trillion after our banks work their fractional banking magic)? Impossible to
know for sure, but my guess is really scary.
The bankers and Wall Street
investors have lost Joe and Suzy's money, now they want passage of legislation
to ensure that Joe and Suzy have to pay them back. There can be little doubt
that Congress will pass it. There will be electoral rage at the decision with
unforeseeable consequences in November.
My wife went to the gas station
in Clearwater, Florida yesterday. There was no gas, so
not being desperate she went home. Today she went out again and found a gas
station with a long queue. She queued. Whilst waiting she chatted to another
woman in the queue. This other woman informed my wife that there was no gas
between Ashville in N. Carolina and Charleston
in S. Carolina. She claimed that in Georgia
people were fighting over gas it was so short. Maybe that is not the whole
story, maybe it is. Who knows what is true in America anymore?
Things are falling apart very
quickly in America.
The downright lies,
and omissions and twisting of the truth, are being continued right up to the
end. There will be a great deal of bitterness if Joe and
Suzy ever realize the nature of the con trick that has been pulled on them. Never
forget that Joe is armed in this country, and oft times Suzy also.
Our children have been in school
here, and tonight we went to the Homecoming dinner. A drum band pounding out
the rhythm whilst beautifully gowned ladies with fantastic jewellery and
sundry glitter walked around the room. Men in beautiful and expensive suits
accompanied them. We feasted and drank and made conversation. On a giant
screen, film of the High School football team (quarter-back has the best
stats in the whole US) was played. People were light-hearted and merry and it
was a great night in the American tradition.
I could not help but have the
thought intrude upon me that it was like an 'end of America'
party. Maybe it's the end of something that had become rotten, and the
re-birth of something far more decent. There are very hard times coming. When
TSHTF [the s*** hits the fan] remember that it is Congress who is your enemy,
not your neighbour.
None of the bankers and Wall
Street crooks could have done what they did without the support and backing
of Congress legislation that not only allowed such actions, but by the nature
of government intervention in markets, made it impossible to survive in those
industries without becoming corrupted by the legislation.
Whilst it does not excuse the
lack of moral fibre of those who participated in this greatest of ever
frauds, it is good to remember that we all have things in our youthful past
that we are not proud of. Without a Congress who completely ignored the
Constitution there could never have been the legislation that created this
fraud. Without Congress, America would never have reached
this impoverished state. Without Congress, Americans would already be living
much better lives, with far fewer enemies in the world.
I shall be writing from overseas
after tomorrow. I'll look from a distance at the implosion of America. My
family and I have loved living in America these last nine months
and are very sad to leave. I came to chronicle at first hand the decline of
this once great country. The people are wonderful... warm, friendly, honest
and hard working.
I have come to understand much
about Americans in the last nine months, and found nothing that I did not
like (apart from the food and coffee), but I am still a million miles away
from understanding why you elect the no-hopers that you do to your Congress. We
all want to be able to come back again one day. No matter how much my family and I will miss America, it will not be as much as the world will miss America.
Sam Mathid
September 29, 2008
The
brilliant Professor Antal E. Fekete,
economist and mathematician, is conducting a seminar in Canberra, Australia
from the 11th to the 14th November this year. It is the ONLY seminar anywhere
in the world where all aspects of the gold and silver basis are discussed,
together with a trading system guided by the basis. Meet and hear one of the
giants of our age. Bookings for the seminar can be made through:
feketeaustralia@yahoo.com
I
was privileged to attend Professor Fekete's seminar
in Hungary in August of
2006, and will again be in attendance in Canberra. Sadly it will be Professor Fekete's last presentation of Gold Standard
University Live. Also
in attendance will be the loquacious Mr D.R. Schoon.
Another
one day event has been announced. This will take place on Saturday 15th
November and is entitled 'The Unfolding of the Crisis'. Professor Fekete graciously bowed to considerable pressure and has
agreed to stay on for the extra day and speak on the subject. It will include
questions from the floor. I will definitely be there.
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