source
By: David_Chu
Politics
Best Financial Markets Analysis Article“It's not the economy, stupid!” - Bill Clinton's campaign slogan was: “It's the economy, stupid!”
Actually that was James Carville's maxim and battle cry for the 1992 presidential election. Mr. “Ragin' Cajun” Carville, as you probably don't remember, was the commander-in-chief of Bill Clinton's first campaign for the White House. He was and is married to Mary Joe Matalin who happened to be working on George H.W. Bush's 1992 re-election campaign! Ms. Matalin was also an assistant to President George W. Bush and a special counselor to Vice President Dick Cheney until 2003.
Talk about sleeping with the enemy! If their marriage of political convenience and ”political operativeness” does not wake you up like a freezing morning shower, then you should go back to sleep in the Matrix (i.e., how they can be involved in both the Republican and Democrat presidential campaigns in 1992 at the highest levels and sleep in the same bed literally, and still be able to get away with it is a testimony to the blatant and absolute corruptness in U.S. politics):
Every four years the powers-that-be (PTB) that control Washington, D.C. and Wall Street trod out candidates from two sides of the same coin that they own. The little people, programmed by the corporate mass media and separated into two self-feeding troughs called the “left” and the “right” as in donkeys and elephants, cheer as though their candidate is the one who is finally going to lead them to their promised land. And every four years, the disappointment on both sides grows and grows.
Were not the Democrats elected to Congress during the 2006 election to stop the Iraq war? What happened? All that the madam speaker of the House, the Democrat congresswoman from San Francisco, has to do to stop the illegal and inhuman Iraq war is to withdraw military funding for the war by not considering the spending amendments and bills that come up which is the fiduciary prerogative of the U.S. Congress. It's pretty simple, but she doesn't want to do that for many reasons that will not be discussed here.
Mr. Obama, under the tutelage and supervision of “neolib” Zbigniew Brzezinski, has openly stated, but not widely reported in the corporate mass media, that he wants to move many U.S. troops out of Iraq into Afghanistan for more fighting there. Why?
Mr. Brzezinski is the Democrat soulmate of Dick Cheney: both want wars without end for their masters in the U.S. corporate military industrial complex, but they differ in their approach and who their proclaimed public enemy is. For Mr. Cheney and the neocons, the enemies are the so-called “Islamofacists” who were created by the neolibs, specifically by Mr. Brzezinski, to fight the Soviets in Afghanistan when he was the national security advisor to the peanut farmer from Georgia. Neolib's new enemy during a possible Obama administration will be an old enemy: the Russians. And that is why Mr. Obama wants those troops moved.
According to Patrick Briley who writes for Newswithviews.com, this man may be Obama's “Rasputin” (google his article titled “Brzezinski: Obama's Globalist ‘Rasputin'”). Mr. Brzezinski is a geopolitical chameleon and opportunist, but, even more significantly, a presidential “handler” who needs to be watched very carefully as you would with Dick Cheney and Henry Kissinger:
Zbigniew Brzezinski is Barack Obama's foreign policy advisor. Brzezinski was the national security advisor for President Carter from 1977 to 1981. In 1988 he endorsed HW Bush for President and was Co-Chair of the HW Bush national security advisory task force. From 1987 to 1989 he also served on the HW Bush's Foreign Intelligence Advisory Board. Clinton Secretary of State Madeline Albright was a student of Brzezinski. GW Bush Secretary of State, Condi Rice (also a former national security advisor), who studied under Albright's father, shares many of the same world government views with Brzezinski and Albright.
Were not the Republicans elected every four years to cut government spending as they keep promising a smaller federal government that only grows exponentially? In case you haven't noticed, the total U.S. public debt has exploded from just under $6 trillion at the beginning of 2000 to approximately $14.5 trillion now (this latest tally includes Fannie Mae and Freddie Mac mortgage liabilities that the U.S. Treasury unilaterally assumed for the U.S. a couple of weeks ago without any input from the American people or their so-called representatives in Washington, D.C.)
From a historical perspective and for comparison sake, it took the U.S. from 1776 to 2000 to reach a total public debt of just under $6 trillion. The current resident of the White House has more than doubled the taxpayers' debt! What took 224 years to accomplish if you can call it that, the current president did it in less than 8 years! How is that for the legacy of a “conservative,” “free market,” “small government,” “we are not into nation building,” Republican president?
What about Mr. McCain? What about him? Is he not the one who has publicly stated that he wants a war for one hundred years in Iraq alone? In response to a question from the audience (at a New Hampshire town hall meeting) concerning the possibility that the U.S. military might be staying in Iraq for the next 50 years, Mr. McCain dryly replied, “Make it a hundred.”
Didn't he also recently confess to the Wall Street Journal editorial board, “I don't really understand economics”? He then pointed to former Senator Gramm whom he had brought to this meeting and told everyone in the room that Mr. Gramm is the expert he turns to for expertise on the subject of economics (the former Senator, for those who don't know, is one of two people most responsible for the financial crisis at hand, the other being Alan Greenspan!).
And Mr. McCain is going to take over the captaincy of the U.S.S. Titanic just as it careens towards the derivatives “debt berg” straight ahead in plain sight? Enough said.
Politics is just a game.
To the PTB and their public servants like Mr. Obama and Mr. McCain, politics is just a means to swindle the little people every four years by lying and promising anything and everything to get elected. This 2008 election will be the “crossing the Rubicon” moment for the U.S. The little people are the ones who do the real work and create the real wealth by producing tangible goods and services that are needed in the arena of human commerce. This brings us back to the topic of this article.
The Real and the Unreal
What is confusing about what's going on with the financial markets crashing on Wall Street and the mega bailouts raining down like manna from Washington, D.C. is because most Americans don't understand the difference between two concepts: the “ real economy ” of goods and services versus the world of “ unreal finances ” (my present day term for what has been called the “money trust”* in the past) where money is created out of nothing and money is made on top of money. This mental confusion or brain fog over the real economy and unreal finances is purposefully maintained by the corporate mass media and the public education system through their deafening silence on the difference between the two.
The definition of the word “economy” is “the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services.” And the definition of the word “finances” is “the monetary resources and affairs of a country, organization or person.”
To differentiate the word “finances” that you and I understand and use in our everyday lives, i.e., paying bills and earning a daily wage, versus the world of high-powered money used on Wall Street, I am calling theirs “unreal finances.”
And to illuminate these rather dry but crucial and even life-and-death concepts, I am going to quote at length from a very important newsletter written by Joel Skousen from the World Affairs Brief on March 14, 2008. Mr. Skousen provides penetrating analysis, commentary and insight into the reasons and causes behind the news in politics, economics and finances. An annual subscription to his weekly online newsletter is only $48 and is highly recommended ( www.worldaffairsbrief.com ). My comments are in brackets below.
In reality, there are two separate economic worlds now, not one--even though they are interconnected [just to be clear: there is one “economic” world where real goods and services are produced, and there is one “financial” world where money is created from nothing]. One is real and public [the “real economy” where the little people live and breathe] ; the other is a world of secret monetary creation and financial flows between speculators and insiders with first or second access to new money (and they hoard gold in central banks, incidentally, as the ultimate value) [the world of “unreal finances” of Wall Street and Washington, D.C.] . Yes, eventually the new money flows down into the real markets of goods and services, but there is a huge financial world out there that operates solely on the trillions of dollars that have been created out of nothing. It's a world that does nothing but play on the rise and fall of trends within paper markets.
The real economy of business, industry and actual production of goods is relatively slow to change and grow. It takes time to transform entrepreneurial ideas into concrete products and services. Real productive enterprises create jobs and increase productivity and overall efficiency by providing goods and services that do something better than what existed previously. Economic growth and progress in the real world only comes through making a profit and investing those savings in new enterprises [this is the general theory of the ”free enterprise system” which doesn´t really exist at the upper echelons of the market place] . This takes time. Even in the old world of finance, things took more time. Savings were invested in banks that loaned out funds to other endeavors, and were paid back with interest. Banks could only loan funds as new money came in or as old loans were repaid.
All of that changed with the invention of fiat money, created out of nothing and spent into the economy by government [and by the banks through the creation of loans: approximately 95% of the U.S. money supply is created by the banking system, while the rest is created by the U.S. government through the Federal Reserve] . This monetary and credit creation did not need to wait on tax revenues or savings to be generated and thus it altered the speed of monetary circulation within the economy. The only reason it wasn't highly inflationary is that foreign trade kept absorbing large amounts of our inflated currency, shielding the US from hyperinflation [one of the only reasons why the U.S. has not yet experienced the hyperinflation of Weimar Germany from the 1920's is because the U.S. exports the billions of dollars it creates from nothing to other nations in exchange for their real goods and services--this is the greatest economic and financial scam or pyramid scheme in the world and probably in history] .
A large portion of this government induced inflation surged into the economy through the military industrial complex, leading to huge profits and exaggerated compensation for top executives. Over several decades this habit of paying millions in salary and bonus to executives worked its way through civilian companies. This excess compensation, including fat pension funds, coupled with inflated stock options fed the spectacular rise of mutual funds and investment banking that ultimately funded the dot com boom of the 90's. Yes, the high tech boom would have happened at some time, but not as fast were it not for excessive monetary inflation flooding the markets.
Injection of fiat money alters the natural risk factors of the economy by vastly increasing the number of insider wealthy people who can afford to take high risks--because they are tapped into the bottomless pit of government contracts, or are downstream of those contracts. People who have first access to the free money become high rollers like government itself. That's why government makes such bad investment decisions full of waste and fraud. If it's lost, there is little personal liability. They just create more money next year.
In the presence of government inflation of the monetary supply (especially when it exceeds the true growth of economic output) an increasing number of people (with first, second and third use of the new money) have a lot of excess money looking for a place to earn a profit. Normal, solid business opportunities don't interest them. These take time to provide a return and it is usually less than 8% unless you are the business owner himself--which few nouveau riche want to become. Thus, speculative markets begin to grow exponentially as places to park money and make high profits without having to wait years for a business to succeed and mature.
There have always been markets for paper assets, but they have grown much larger in recent decades as a percentage of the entire economy compared to what I call the real economy of production. These paper asset markets are essential to the function of business and industry [only to a certain and limited degree] , but they now have a life of their own and feed off speculative market moves alone. This is not a rant against speculation per se, because you technically can't distinguish between good and bad speculation until the results are in [I submit to you that all derivatives speculations are bad and non-productive as they pertain to the real economy and the little people] . But, I can recognize when people and institutions are simply gambling on the markets with no thought of producing anything of benefit, except huge profits. . . .
And their even bigger losses are now typically bailed out by the U.S. taxpayers, care of the U.S. Treasury and the Fed.
The End Run
What is taking place with the financial collapse of Bear Sterns, Lehman Brothers, Merrill Lynch, AIG, Washington Mutual, et al. is taking place in the world of unreal finances , not in the real economy. Very key difference. However, let's be totally clear: what happens in the world of unreal finances will eventually spill over and affect the real economy sooner or later.
This is because real businesses, as one example, require loans to expand production and growth in many cases. The collapse of the investment banks in the world of unreal finances is resulting in the collapse of perhaps the entire banking system including commercial banks that do business in the real economy. This is adversely affecting the ability of businesses to borrow money from commercial banks, or to repay existing loans as their banks suddenly collapse and/or are swallowed up by the key insiders corporations like JPMorgan Chase, Citicorp, Bank of America, etc.
What the PTB are attempting to do is to delay the inevitable collapse in unreal finances buy adding more gasoline (what I have called “financial heroin” in my last article) to the financial fires on Wall Street. This will cause the temporary financial euphorias on Wall Street that we are witnessing with increasing frequency. But that is not all that the PTB are attempting to accomplish.
There are at least three crucial objectives that the PTB are trying to push and rush through the U.S. Congress under the guise and rare opportunity of the current financial crisis:
• Bail out their servant class and their insider corporations on Wall Street with hundreds of billions and even trillions of U.S. taxpayer's money.
• Usurp more unconstitutional control by creating an executive position, a new U.S. Treasury Secretary, that borders on financial dictatorship.
• Kill the intent and purpose of the Glass-Steagall Act once and for all by combining so-called investment banks like JPMorgan Chase, Goldman Sachs and Morgan Stanley with commercial banks such as Washington Mutual, Wachovia, and Bank of America as is being done right now by these investment banks.**
It's the Unreal Finances, Stupid!
The $700 billion dollars [a number admittedly pulling out of the thin air as a U.S. Treasury spokeswoman reportedly told Forbes.com last Tuesday: “It's not based on any particular data point. We just wanted to choose a really large number.”] bailout scheme proposed by the U.S. Treasury Secretary and probably the Fed Chairman is solely for the rescue the world of unreal finances: those who have played one too many financial crapshoot games with trillions of dollars of bets on such toxic financial instruments or so-called investments as “credit default swaps,” “interest rate derivatives,” and “mortgage backed securities,” just to name a few.
They are crying out to Uncle Sam to bail them out after they have made and lost trillions of dollars on their atrocious gambles. As Catherine Austin Fitts (former Assistant Housing Secretary under George H.W. Bush) said on the Jeff Rense Radio Program (rense.com) last Wednesday, and I am really paraphrasing here: “It would be akin to you and I picking the wrong Super Lotto numbers and then having Uncle Sam come and bail us out by rewarding us the jackpot even though we didn't pick the winning numbers!”
That is what Wall Street is attempting to do with the crucial assistance and blatant insistence of one of their very own who now controls the U.S. Treasury and who wants unlimited power to do whatever he pleases to become the financial dictator of the United States. Henry Merritt “Hank” Paulson Jr. was the chairman and chief executive officer of Goldman Sachs. Now he is the 74th U.S. Treasury Secretary. And he wants to be the financial dictator of the United States!
The Paulson Act and Financial Dictatorship
To wit: the $700 billion bailout scheme proposed by Paulson, Bernanke and Bush will institute the following unconstitutional powers (italicized and bolded emphasis is mine):
• "The Secretary's authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time ."
• “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion , and may not be reviewed by any court of law or any administrative agency.”
I would list more egregious usurpation of power proposed by this mother-of-all bailout scheme but these are the only two statements that I could find on the Internet on this bill, which should be truthfully called the “Paulson Act.” But these two statements are quite enough.
What the former Goldman Sachs CEO wants to do is to consolidate total unlimited financial powers of the United States in the hands of one person, in himself as the Treasury Secretary, untouchable by any judicial courts--even the U.S. Supreme Court.
By: David_Chu
Politics
Best Financial Markets Analysis Article“It's not the economy, stupid!” - Bill Clinton's campaign slogan was: “It's the economy, stupid!”
Actually that was James Carville's maxim and battle cry for the 1992 presidential election. Mr. “Ragin' Cajun” Carville, as you probably don't remember, was the commander-in-chief of Bill Clinton's first campaign for the White House. He was and is married to Mary Joe Matalin who happened to be working on George H.W. Bush's 1992 re-election campaign! Ms. Matalin was also an assistant to President George W. Bush and a special counselor to Vice President Dick Cheney until 2003.
Talk about sleeping with the enemy! If their marriage of political convenience and ”political operativeness” does not wake you up like a freezing morning shower, then you should go back to sleep in the Matrix (i.e., how they can be involved in both the Republican and Democrat presidential campaigns in 1992 at the highest levels and sleep in the same bed literally, and still be able to get away with it is a testimony to the blatant and absolute corruptness in U.S. politics):
Every four years the powers-that-be (PTB) that control Washington, D.C. and Wall Street trod out candidates from two sides of the same coin that they own. The little people, programmed by the corporate mass media and separated into two self-feeding troughs called the “left” and the “right” as in donkeys and elephants, cheer as though their candidate is the one who is finally going to lead them to their promised land. And every four years, the disappointment on both sides grows and grows.
Were not the Democrats elected to Congress during the 2006 election to stop the Iraq war? What happened? All that the madam speaker of the House, the Democrat congresswoman from San Francisco, has to do to stop the illegal and inhuman Iraq war is to withdraw military funding for the war by not considering the spending amendments and bills that come up which is the fiduciary prerogative of the U.S. Congress. It's pretty simple, but she doesn't want to do that for many reasons that will not be discussed here.
Mr. Obama, under the tutelage and supervision of “neolib” Zbigniew Brzezinski, has openly stated, but not widely reported in the corporate mass media, that he wants to move many U.S. troops out of Iraq into Afghanistan for more fighting there. Why?
Mr. Brzezinski is the Democrat soulmate of Dick Cheney: both want wars without end for their masters in the U.S. corporate military industrial complex, but they differ in their approach and who their proclaimed public enemy is. For Mr. Cheney and the neocons, the enemies are the so-called “Islamofacists” who were created by the neolibs, specifically by Mr. Brzezinski, to fight the Soviets in Afghanistan when he was the national security advisor to the peanut farmer from Georgia. Neolib's new enemy during a possible Obama administration will be an old enemy: the Russians. And that is why Mr. Obama wants those troops moved.
According to Patrick Briley who writes for Newswithviews.com, this man may be Obama's “Rasputin” (google his article titled “Brzezinski: Obama's Globalist ‘Rasputin'”). Mr. Brzezinski is a geopolitical chameleon and opportunist, but, even more significantly, a presidential “handler” who needs to be watched very carefully as you would with Dick Cheney and Henry Kissinger:
Zbigniew Brzezinski is Barack Obama's foreign policy advisor. Brzezinski was the national security advisor for President Carter from 1977 to 1981. In 1988 he endorsed HW Bush for President and was Co-Chair of the HW Bush national security advisory task force. From 1987 to 1989 he also served on the HW Bush's Foreign Intelligence Advisory Board. Clinton Secretary of State Madeline Albright was a student of Brzezinski. GW Bush Secretary of State, Condi Rice (also a former national security advisor), who studied under Albright's father, shares many of the same world government views with Brzezinski and Albright.
Were not the Republicans elected every four years to cut government spending as they keep promising a smaller federal government that only grows exponentially? In case you haven't noticed, the total U.S. public debt has exploded from just under $6 trillion at the beginning of 2000 to approximately $14.5 trillion now (this latest tally includes Fannie Mae and Freddie Mac mortgage liabilities that the U.S. Treasury unilaterally assumed for the U.S. a couple of weeks ago without any input from the American people or their so-called representatives in Washington, D.C.)
From a historical perspective and for comparison sake, it took the U.S. from 1776 to 2000 to reach a total public debt of just under $6 trillion. The current resident of the White House has more than doubled the taxpayers' debt! What took 224 years to accomplish if you can call it that, the current president did it in less than 8 years! How is that for the legacy of a “conservative,” “free market,” “small government,” “we are not into nation building,” Republican president?
What about Mr. McCain? What about him? Is he not the one who has publicly stated that he wants a war for one hundred years in Iraq alone? In response to a question from the audience (at a New Hampshire town hall meeting) concerning the possibility that the U.S. military might be staying in Iraq for the next 50 years, Mr. McCain dryly replied, “Make it a hundred.”
Didn't he also recently confess to the Wall Street Journal editorial board, “I don't really understand economics”? He then pointed to former Senator Gramm whom he had brought to this meeting and told everyone in the room that Mr. Gramm is the expert he turns to for expertise on the subject of economics (the former Senator, for those who don't know, is one of two people most responsible for the financial crisis at hand, the other being Alan Greenspan!).
And Mr. McCain is going to take over the captaincy of the U.S.S. Titanic just as it careens towards the derivatives “debt berg” straight ahead in plain sight? Enough said.
Politics is just a game.
To the PTB and their public servants like Mr. Obama and Mr. McCain, politics is just a means to swindle the little people every four years by lying and promising anything and everything to get elected. This 2008 election will be the “crossing the Rubicon” moment for the U.S. The little people are the ones who do the real work and create the real wealth by producing tangible goods and services that are needed in the arena of human commerce. This brings us back to the topic of this article.
The Real and the Unreal
What is confusing about what's going on with the financial markets crashing on Wall Street and the mega bailouts raining down like manna from Washington, D.C. is because most Americans don't understand the difference between two concepts: the “ real economy ” of goods and services versus the world of “ unreal finances ” (my present day term for what has been called the “money trust”* in the past) where money is created out of nothing and money is made on top of money. This mental confusion or brain fog over the real economy and unreal finances is purposefully maintained by the corporate mass media and the public education system through their deafening silence on the difference between the two.
The definition of the word “economy” is “the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services.” And the definition of the word “finances” is “the monetary resources and affairs of a country, organization or person.”
To differentiate the word “finances” that you and I understand and use in our everyday lives, i.e., paying bills and earning a daily wage, versus the world of high-powered money used on Wall Street, I am calling theirs “unreal finances.”
And to illuminate these rather dry but crucial and even life-and-death concepts, I am going to quote at length from a very important newsletter written by Joel Skousen from the World Affairs Brief on March 14, 2008. Mr. Skousen provides penetrating analysis, commentary and insight into the reasons and causes behind the news in politics, economics and finances. An annual subscription to his weekly online newsletter is only $48 and is highly recommended ( www.worldaffairsbrief.com ). My comments are in brackets below.
In reality, there are two separate economic worlds now, not one--even though they are interconnected [just to be clear: there is one “economic” world where real goods and services are produced, and there is one “financial” world where money is created from nothing]. One is real and public [the “real economy” where the little people live and breathe] ; the other is a world of secret monetary creation and financial flows between speculators and insiders with first or second access to new money (and they hoard gold in central banks, incidentally, as the ultimate value) [the world of “unreal finances” of Wall Street and Washington, D.C.] . Yes, eventually the new money flows down into the real markets of goods and services, but there is a huge financial world out there that operates solely on the trillions of dollars that have been created out of nothing. It's a world that does nothing but play on the rise and fall of trends within paper markets.
The real economy of business, industry and actual production of goods is relatively slow to change and grow. It takes time to transform entrepreneurial ideas into concrete products and services. Real productive enterprises create jobs and increase productivity and overall efficiency by providing goods and services that do something better than what existed previously. Economic growth and progress in the real world only comes through making a profit and investing those savings in new enterprises [this is the general theory of the ”free enterprise system” which doesn´t really exist at the upper echelons of the market place] . This takes time. Even in the old world of finance, things took more time. Savings were invested in banks that loaned out funds to other endeavors, and were paid back with interest. Banks could only loan funds as new money came in or as old loans were repaid.
All of that changed with the invention of fiat money, created out of nothing and spent into the economy by government [and by the banks through the creation of loans: approximately 95% of the U.S. money supply is created by the banking system, while the rest is created by the U.S. government through the Federal Reserve] . This monetary and credit creation did not need to wait on tax revenues or savings to be generated and thus it altered the speed of monetary circulation within the economy. The only reason it wasn't highly inflationary is that foreign trade kept absorbing large amounts of our inflated currency, shielding the US from hyperinflation [one of the only reasons why the U.S. has not yet experienced the hyperinflation of Weimar Germany from the 1920's is because the U.S. exports the billions of dollars it creates from nothing to other nations in exchange for their real goods and services--this is the greatest economic and financial scam or pyramid scheme in the world and probably in history] .
A large portion of this government induced inflation surged into the economy through the military industrial complex, leading to huge profits and exaggerated compensation for top executives. Over several decades this habit of paying millions in salary and bonus to executives worked its way through civilian companies. This excess compensation, including fat pension funds, coupled with inflated stock options fed the spectacular rise of mutual funds and investment banking that ultimately funded the dot com boom of the 90's. Yes, the high tech boom would have happened at some time, but not as fast were it not for excessive monetary inflation flooding the markets.
Injection of fiat money alters the natural risk factors of the economy by vastly increasing the number of insider wealthy people who can afford to take high risks--because they are tapped into the bottomless pit of government contracts, or are downstream of those contracts. People who have first access to the free money become high rollers like government itself. That's why government makes such bad investment decisions full of waste and fraud. If it's lost, there is little personal liability. They just create more money next year.
In the presence of government inflation of the monetary supply (especially when it exceeds the true growth of economic output) an increasing number of people (with first, second and third use of the new money) have a lot of excess money looking for a place to earn a profit. Normal, solid business opportunities don't interest them. These take time to provide a return and it is usually less than 8% unless you are the business owner himself--which few nouveau riche want to become. Thus, speculative markets begin to grow exponentially as places to park money and make high profits without having to wait years for a business to succeed and mature.
There have always been markets for paper assets, but they have grown much larger in recent decades as a percentage of the entire economy compared to what I call the real economy of production. These paper asset markets are essential to the function of business and industry [only to a certain and limited degree] , but they now have a life of their own and feed off speculative market moves alone. This is not a rant against speculation per se, because you technically can't distinguish between good and bad speculation until the results are in [I submit to you that all derivatives speculations are bad and non-productive as they pertain to the real economy and the little people] . But, I can recognize when people and institutions are simply gambling on the markets with no thought of producing anything of benefit, except huge profits. . . .
And their even bigger losses are now typically bailed out by the U.S. taxpayers, care of the U.S. Treasury and the Fed.
The End Run
What is taking place with the financial collapse of Bear Sterns, Lehman Brothers, Merrill Lynch, AIG, Washington Mutual, et al. is taking place in the world of unreal finances , not in the real economy. Very key difference. However, let's be totally clear: what happens in the world of unreal finances will eventually spill over and affect the real economy sooner or later.
This is because real businesses, as one example, require loans to expand production and growth in many cases. The collapse of the investment banks in the world of unreal finances is resulting in the collapse of perhaps the entire banking system including commercial banks that do business in the real economy. This is adversely affecting the ability of businesses to borrow money from commercial banks, or to repay existing loans as their banks suddenly collapse and/or are swallowed up by the key insiders corporations like JPMorgan Chase, Citicorp, Bank of America, etc.
What the PTB are attempting to do is to delay the inevitable collapse in unreal finances buy adding more gasoline (what I have called “financial heroin” in my last article) to the financial fires on Wall Street. This will cause the temporary financial euphorias on Wall Street that we are witnessing with increasing frequency. But that is not all that the PTB are attempting to accomplish.
There are at least three crucial objectives that the PTB are trying to push and rush through the U.S. Congress under the guise and rare opportunity of the current financial crisis:
• Bail out their servant class and their insider corporations on Wall Street with hundreds of billions and even trillions of U.S. taxpayer's money.
• Usurp more unconstitutional control by creating an executive position, a new U.S. Treasury Secretary, that borders on financial dictatorship.
• Kill the intent and purpose of the Glass-Steagall Act once and for all by combining so-called investment banks like JPMorgan Chase, Goldman Sachs and Morgan Stanley with commercial banks such as Washington Mutual, Wachovia, and Bank of America as is being done right now by these investment banks.**
It's the Unreal Finances, Stupid!
The $700 billion dollars [a number admittedly pulling out of the thin air as a U.S. Treasury spokeswoman reportedly told Forbes.com last Tuesday: “It's not based on any particular data point. We just wanted to choose a really large number.”] bailout scheme proposed by the U.S. Treasury Secretary and probably the Fed Chairman is solely for the rescue the world of unreal finances: those who have played one too many financial crapshoot games with trillions of dollars of bets on such toxic financial instruments or so-called investments as “credit default swaps,” “interest rate derivatives,” and “mortgage backed securities,” just to name a few.
They are crying out to Uncle Sam to bail them out after they have made and lost trillions of dollars on their atrocious gambles. As Catherine Austin Fitts (former Assistant Housing Secretary under George H.W. Bush) said on the Jeff Rense Radio Program (rense.com) last Wednesday, and I am really paraphrasing here: “It would be akin to you and I picking the wrong Super Lotto numbers and then having Uncle Sam come and bail us out by rewarding us the jackpot even though we didn't pick the winning numbers!”
That is what Wall Street is attempting to do with the crucial assistance and blatant insistence of one of their very own who now controls the U.S. Treasury and who wants unlimited power to do whatever he pleases to become the financial dictator of the United States. Henry Merritt “Hank” Paulson Jr. was the chairman and chief executive officer of Goldman Sachs. Now he is the 74th U.S. Treasury Secretary. And he wants to be the financial dictator of the United States!
The Paulson Act and Financial Dictatorship
To wit: the $700 billion bailout scheme proposed by Paulson, Bernanke and Bush will institute the following unconstitutional powers (italicized and bolded emphasis is mine):
• "The Secretary's authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time ."
• “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion , and may not be reviewed by any court of law or any administrative agency.”
I would list more egregious usurpation of power proposed by this mother-of-all bailout scheme but these are the only two statements that I could find on the Internet on this bill, which should be truthfully called the “Paulson Act.” But these two statements are quite enough.
What the former Goldman Sachs CEO wants to do is to consolidate total unlimited financial powers of the United States in the hands of one person, in himself as the Treasury Secretary, untouchable by any judicial courts--even the U.S. Supreme Court.
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