This is back door socialism. The very idea that all these banks from bear Stearns to FANIE MAE and FREDDIE MAC and other banks that have liquidity issues should have unlimited lines of credit from the Fed that is ultimately sold to or guaranteed by the American Taxpayer is outrageous. Banks that took the risk to write crazy mortgages to people who were not credit worthy and who, for a time, profited in driving up the real estate prices, are now unwilling to take the consequences of their actions. Our federal government is determined to save their undeserving hides while transferring the consequences of this criminal stupidity to the US taxpayer. We can’t have rich bankers going out of business because the whole system might break and we could have another depression! Can’t have that!
Now the law of unintended consequences rears its ugly head! The bail out of the finance industry drives the dollar to record lows resulting in oil being driven to record highs because Oil seems like a much better investment than the plummeting dollar. So to save the rich bankers we have cut the value of every dollar in circulation, your savings, investments and earnings while unleashing an inflation tsunami led by catastrophic oil price spikes which means the devalued dollars you hold by less and less. All this to save the financial industry who let people with no ID, job history, credit history have mortgages with nothing down keeping real estate white hot and profiting from the frenzy until the bubble they created bust.
The Stock Market has become a national barometer of free floating anxiety and the extent to which we can all agree to be deluded when faced with the greatest rip off of wealth the bankers have ever perpetrated on we the sheep. Stocks that are bankrupt like Freddie Mac and Fannie Mae are now backed by the government instead of in receivership due to the folly of their actions. The weak and the stupid are allowed to remain in the market instead of being destroyed and thus we perpetuate the idea that Uncle Sam will save the day for any financial mismanagement imaginable. What message does this send the finance industry? Do any stupid thing you like and we’ll get the taxpayers to buy up all your worthless paper? What’s wrong with this picture? I wonder why people at Fannie and Freddie aren’t in jail rather then continuing in their jobs, in a company they destroyed, being bailed out by the government. Where are our laws? Why do we imagine that saving companies from the fruits of their greed and stupidity will redound to societies benefit?
The antics of the Stock Market have a sort of grim amusement for me these days because they go up and down in crazy ways with tons of crazy interference from our crazy government and with each fire the government puts out they plant the seeds of five more fires. With each new fire, beginning with Bear Sterns, they make the conditions that gave rise to Bear Stearns more prevalent and they weaken the fundamental structure of our dollar. I’m to the point where I don’t worry too much about the latest week bank that somehow manages to miraculously survive on Wall Street when any rational person would think they were about to crash because the government won’t let them. The Stock Market no longer reflects the bottom line truths about business in America and now reflects some happy nonsense fed to us by the ever growing government. The Stock Market is not worth worrying about these days because causation has been banished from the equation.
The thing to worry about these days is while the dollar continues to slide and the government continues to debt like drunken sailors what happens when no one will by the government debt anymore? What if other countries start dollar dumping? It’s bad enough when people lose faith in the stock market and that’s one type of problem but when they lose faith in the government and the dollars they issue that’s another order of crisis. That’s where we’re headed. The Federal Government has vastly overstepped its bounds to its own detriment and now any sane country has got to be looking for a non self defeating way to get out of the dollar and into either commodities or some other currency. As all that debt the Japanese and Saudis’ financed becomes worth less and less by the devaluation of our currency they have got to be rather annoyed with us. All this additional debt the government is directly or indirectly taking on to put out fires on Wall Street are but fuel on the fire of the dollars destruction. When the big crash comes, and it will, the actions of the government will have magnified the crisis by exponential factors creating a world currency crisis that will remove the USA from global leadership overnight.