The Financial System is out of control and flirting with a crash thanks to the Easy Money Policies of the Federal Reserve and the concurrent lack of sane regulation in the financial and mortgage markets. The bankruptcy of Lehman Brothers was bad enough but the coming bankruptcy of AIG will be an order of magnitude worse. A gigantic struggle for liquidity is going on causing the banks to horde their cash and the credit markets to dry up. All industries are being impacted as the atmosphere changes to grim in the moments before trading opens on Tuesday. The Federal Reserve (The Global Money Cartel) is expected to announce another rate cut today but few think that it will make any difference.
This is without doubt the worst financial debacle since the great depression and may indeed trigger a second great depression that makes the first one look like Romper Room. In the Great Depression of the thirties the United States was a creditor nation but today we’re the greatest debtor nation on earth. The New Deal was possible because the government had the money to stimulate the economy and create the social programs we all know so well. The Dollar was a dependable currency, if you had some that is, and that too is not the case today. The US dollar is in a precarious position and the true horror scenario is if the world wakes up one morning and sees all those dollars as not worth the paper they’re printed on. At that point we are well and truly up a creek without a paddle.
I find it fascinating that this is happening after the Fed (Global Money Cartel) found buyers for Bear Stearns and the Treasury Department effectively nationalized the American Mortgage Industry, and yet we’re still in such an epic crisis of confidence. Investors are indifferent about the possibility of the Fed being able to do any cutting of the interest rates as simply not being enough. The Fed is simply out of levers to pull to manipulate the economy and we seem to be headed for a major financial crash that will usher in a host of new realities to American as well as Global financial realities and regulation. Everyone I know is cutting expenses and spending, the banks are hording money, companies in every industry are tightening their belts and the only one spending is the United States Congress! What would it take to make the Congress stop the spending and represent the interests of this country instead of their own craven self interests? It would appear that the interventionist approach to try and stave off the crisis we’re experiencing right now, didn’t exactly work.
I guess I find this last item a grim but humorous aside that I simply can’t resist. The Treasury has been struggling to figure out how to represent the Nationalization of Freddie Mac and Fannie Mae on its books and it came to a fascinating if predictable solution. The Federal Government is simply not going to put the Nationalization of the Mortgage Market on its books! It added 6 trillion dollars in liabilities but sees no need to represent that on the books while it rails against Wall Street Greed and Corruption and readies a host of regulations to make Wall Street play by the rules. After all, when you don’t play by the rules you’re prone to an occasional “crisis of confidence”. Maybe that’s why the dollar is so strong and steady these days?