The dream has become a nightmare and now the firestorm in the Sub Prime Market has ignited the entire housing sector on fire. The greedy lending practices of the banks and the devaluation of the currency by the Federal Reserves ill-advised policy has created a crisis of epic proportions. It’s a sort of economic “China Syndrome”, the banking core superheated over the subprime crisis is melting right thru all sectors of the American economy with what is sure to be a very large, poisonous explosion at the end. There is no stopping it and it’s the bankers and the Federal Reserve System, as always in our history, who have crashed our economy in earnest.
I’m reminded of the famous speech in the Movie Wall Street, where Michael Douglas’s character extols the virtues of greed. “Greed is good”, he says, “greed works”.” Well it’s not working out too well for us in our economy right now because the greed, as so often is the case, is going to come at the expense of every American if not everyone on the planet. Come to think of it, Michael Douglas was in China Syndrome too: and that movie defined the wholesale American dismissal of Nuclear Power and the launch of our Environmental Religion that has so backed us into a corner today. The French get 80% of their power from nuclear energy and it kills me to complement the French but the French got it right and we got it wrong. We can’t solve problems by sticking our head in the sand. Maybe we should all stop going to see Michael Douglas movies?
Friday July 11, 2008 was a very scary day with the near meltdown of Fannie Mae and Freddie Mac but the punch line came later, after the market closed, and the first of the financial post mortems ran in the news. Indy Macwas seized by federal banking regulators declaring it insolvent and Indy Mac will be the first or second largest bank failure in US history, depending on which story you read. The Point is that it’s a huge failure and its demise came from the crazy mortgage lending practices that even now reverberate through the economy in one form or another. This thing just keeps growing bigger and bigger and claiming one casualty after another. Our economic life is so interdependent that it’s having effects all sectors of the economy. At some point other banks will fail and it’s still possible that Freddie and Fannie will have to be taken over by the government.
The Airline industry is in deep trouble with fuel prices and they may need a bail out. Are General Motors and Ford Motors too big to be allowed to fail? We’re very likely to find out because they’re not doing all that well. We are in for layoffs and economic distress like we have never seen. It’s very likely that this will be the straw that eventually breaks the back of the US economy and the US dollar and culminates in the torch of world leadership being passed back to Europe while we spend decades trying to put the USA back together again.
You know its bad times when the Illegal Immigrants start to migrate back to Mexico. It’s a somewhat crude image but our carcass has been picked clean, we just won’t admit it yet. What our President and the Congress dared not do, clean up illegal immigration, the greed of the bankers and the Federal Reserve will do by economic means. There is no such thing as a soft landing given the string of events and failures and devaluations and debt that have been set in motion. The fact of the matter is that we will not be driving around as once we did. We may not be eating as carelessly, (I can bring myself to say well) as once we did and our children who have every toy imaginable are about to find out that their parents have largely destroyed their lives before they had a chance to live them. It might get so bad that we have to smuggle ourselves across the Mexican border for work but the difference will be that the Mexican Government would shoot or imprison us rather than give us free education, health care and sanctuary in many of the biggest cities.
The Bible has long foretold that in the last days the world would largely be ruled from Europe in general and Rome in particular. For all of my lifetime, except for the last couple of months, I considered that highly unlikely. The very possibility that we could fall from world dominance within two or three years seemed impossible but now I think I see how it will happen. We are headed for bad times and the failure of the United States dollar. This is just the beginning.
Since the dollar is the world’s reserve currency and since this mess is largely our own greed coming back to bite us in the butt; I don’t think the world is going to be too happy with us, nor too amenable to our leadership in the times to come. Most of the anti Americanism that’s been out there in past decades seemed devoid of any rational merit. The Anti Americanism of the future will have a record of what our brand of capitalism has done to ourselves and the world. It’s not nice to create a planetary depression and we are going to get a refresher course for what’s important in life in one big hurry. American style capitalism will be out of style overnight and some form of European Socialism will become the governing principal of the future. It’s not going to be pretty and, I have to admit, it’s going to mark the end of our turn as “the hope of mankind. I always thought the absence of America in the Bibles last days accounts were improbable, to say the least, but now I suspect I’m standing on the edge of the cliff watching the USA begin to crumble like a house of cards.
The Bible was regarded as fiction for suggesting Israel would be reborn as a real county in the last days. In 1948 it happened against all odds. The Fall of America is seen as improbable, even by my tax accountant who was amused by all the people investing in Euro’s, and yet we are on the cusp of the worst crisis the nation has ever faced. Our dream of homeownership in the hands of greedy bankers and the childlike baby boomers has become the primary cause for an economic nightmare that will reverberate for decades to come. Even if the Fannie Mae and Freddie Mac crisis has been averted, at least for this weekend, it and other financial issues will be back in play on Monday morning. So many disasters are brewing right now its just a matter of time before one of them ends the world as we knew it. We have lots of leaks in the dike and the Federal Government, like the contemptible Federal Reserve, is going to find out that it has nowhere near enough fingers to plug all the leaks. We who have had it so well are about to pay the piper and the Euro is about to become the world new reserve currency. European socialism, not American style capitalism will write the futures economic rules. Only the bible saw this one coming—- until recently I just didn’t believe it’s possible. How could we have been so blind?