D. Stewart Armstrong
Preface
As we all know, the US economy resplendent with all of its mismanagement, the manipulations, and the seemingly never ending bailouts, is in a ditch. I’m not going to go into the particulars as to how we’ve arrived at this point because we all have our own ideas. Needless to say, anyone with two nickels to rub together, knows that these are desperate times. I will say that this current administration has been as nontransparent and as secretive as any in our history. As a consequence, our current situation has collapsed upon us with a great deal of notification but with very little warning.
Our financial system has not allowed itself to be cleansed because people like Mr. Greenspan thought he could control all things financial. Greenscam like many before him believed himself omnipotent because he had the administration just where he wanted them or was that the other way around? He was not omnipotent.
Economies, like any other living organism have a need to to take in nourishment, to ingest it, to digest it, and to eliminate the waste. A financial system is a living organism and we have treated ours very poorly. The nourishment for a financial system is capital and it ingests that capital in either a rational or irrational manner depending upon certain rules and regulations from the PTB (Powers that Be) , and eventually after digesting the information, it will eliminate waste by causing those businesses and financial entities not utilizing coherent and successful policies to go bankrupt.
The PTB have discovered one epiphany after another which have made them all omnipotent and therefore immune to the financial laws of time and space. America, its citizens and the global community at large are now paying the price. There are five concepts of which I would remind us:
1. We are in this mess because liberty takes constant vigilance. Have we been vigilant or complacent? Actions speak louder than words.
2. One cannot make educated decisions when markets are manipulated. The more the manipulation the more the probability of eventual failure. Everything appears manipulated–except the bond market and its weak on the edges.
3. We are all accountable because we take too much and give too little
4. The American political system is broken. Read all of Congressman Ron Paul’s missives and join the Campaign for Liberty.
5. Our apathy has been created by design and by not participating in the political system. Our apathy is a joy to the politicos, their lobbyists, the military, and the multinational corporations.
Keep them in debt and they are our slaves.
The United States is bankrupt today; of that there is no doubt. The slaves forgot to save a little for emergencies. The PTB plan worked too well! In fact we are beyond bankrupt, we are so far in debt as a country that we will never ever be able to extricate ourselves from this burden by any traditional means. I don’t believe we can inflate away the debt as the politicians have traditionally done.
That these debts will never be repaid by traditional means is the first sign of real global danger. Japan wants to be repaid in Yen not dollars. The Saudis purchase 3.5 billion in gold and that is but bubble gum money for them. The Chinese have 1.8 trillion of US dollars that they would much rather have in gold. Get the picture?
On top of the current bailouts, we have a credit card crisis that needs to be addressed (another bubble) along with the intricacies of these OTC derivatives and how they will affect the banks, the multinational businesses, and the US government (another bubble). We are still in Bubbleland and yet Mr. Bubbles has departed. Who better to preside over more bubbles than Mr. Bubbles himself. You can’t find a good bubble buster when you really need one.
Consider that the first round of “Baby Boomers” is now in the system and the system into which they’ve paid generously for the past thirty or forty years is now broke and getting worse by the day. Fully half of the middle class is in jeopardy with home foreclosures, decimated portfolios and IRAs, drastically reduced home prices, jobs and careers in jeopardy, and inflation about to tear the rest of the social fabric to pieces. It is time to wake up people–get involved. Get a Plan!
The first job for every American is to survive financially. Let us find a way to help each other. Any ideas are welcome and will be published in this column. I think we can do better than the government on many levels. This is one of those times in American history when we must lend a hand to our fellows. We must join together, if not as a political party, then as a nation of citizens whose mission it will be to save their families first, their communities second, their states thirdly, and then the Nation. In other words if we take care of the nicles and dimes, the dollars will take care of themselves–in a matter of speaking of course. We need a starting point.
We need a plan.
Bailout Costs As of November 25, 2008
From Enrico Orlandini’s site.
“This is before they added $1 trillion today…”
If we add in the Citi bailout, the total cost now exceeds $4.6165 trillion dollars. The current Credit Crisis bailout is now the largest outlay In American history. To put this in perspective, Jim Bianco of Bianco Research crunched the inflation adjusted numbers and found that the bailout has cost more than all of these big budget government expenditures – combined:
• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase : Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq : Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion
TOTAL: $3.92 trillion
At the tipping point
I believe that we’ve reached this point in our nation’s history because of two things. One was the creation of the Federal Reserve which is neither federal nor a reserve as I’ve said many times before, and the other item is when we went totally off the gold standard under Nixon.
You know, nothing really changes except change and we can take the situation that we are going through today and discover that its a repeat performance of say the Roman Era..In other words, history repeats itself. We have Football now instead of the lions and Christians!
The point is where do we go from here? our situation was not created in a day and it will not be resolved in a similar time frame. I hate to say it but I am almost certain that things are going to get worse before they get better. I know that Obama has brought a great deal of excitement to the country with his election but we should not forget that John McCain had over 140 million votes. I also want you to remember that talk is one thing and action is totally different and as my momma used to say “actions speak louder than words”. So to all the youth who were involved in the election on behalf of Mr. Obama may I suggest that you continue on and get into the trenches on a day-to-day basis and be on your congresspeople like fleas on a dog or flies on rotting vegetation. How’s that for being diplomatic?
Obama has one thing going for him and that is charisma. People like him, his lovely wife, and his adorable kids. Then there is his 100KW smile. He exudes confidence, without being arrogant and in many ways he is just like you and I only maybe a bit more sophisticated. He has charisma and he makes people comfortable. He ran an absolutely brilliant campaign. If he can rein in the wasteful spending and control the zealots in his party, he may have a chance to avoid a total meltdown. I am rooting for him as I root for America. But not the America of Bush and the Neocons, but the real America that each of us carry in our hearts. The generous, compassionate part of America which made us great.
I will stand up to the plate and take my lumps yet again because I detested Bush and all that he stood for. He claimed to be a “uniter” but turned out to be a “dividacator” He is the antithesis of America and in many ways he is not representative of the average American; at least I hope he is not. I think this is a case of American politics at its worst. He is responsible for the illegal deaths of hundreds of thousands of people and for that alone I can never forgive him or Cheney or Rumsfeld or any of the rest of those illiterates. Yes, I realize I’m not supposed to be so specific; but when I see a country like ours being sold down the river for a handful of silver or a boatload of oil as the case may be, it breaks my heart. This Country used to have the moral high ground and the bully pulpit and where are we now? There is only one way that we are going to put this country back together and that is if you and I respond to the challenge that we all now face. We need to add our voice to the outrage at what is being done in the name of America on both sides of the aisle. It is not what the middle-class bought into or aspired to. As far as I’m concerned, the far left and the far right can be bundled up and put in deep storage until the rest of us get it right.
We Need a Plan
We all need a plan in this environment and I’m here to encourage you to find one that fits your own family’s needs. Many of us are going to have to re-create ourselves. We are going to have to find new jobs, perhaps we’ll have to move to a different location, perhaps we’ll have to find out how these financial markets work. Most of all we are going to have to repair the political system in the United States which is now totally intertwined with the financial system. In a sense, everything that our founding fathers fought for and wrote into the Constitution has been desecrated, especially by these last two administrations although it would appear to me that politics in the United States has just gotten worse and worse and worse over the years. He who has the most money wins. Obama had the most money– he tapped into the Internet– he tapped into the youth movement– he delivered the message we all wanted to desperately hear which was change; and he raised the most money. He won! In that sense the government itself is to blame regardless of who is president and which party is in office.Incidentally, the PTB could not give a hoot as to which party is in office so its time to grow up. We are pawns.
The Plan
The first thing that we have to do is to get our head out of the sand. The status quo, inertia, is a very difficult concept to change but we have to understand it in order to move forward.
I think most of us are now at that point where we realize we’ve lost a great deal of our personal wealth whether it be via our home values, our pension plans, our businesses, or any number of other wealthy evaluators. The first step on the road to personal recovery is to recognize where we are and how to move forward. In order to do that, we need a plan. It may be as simple as sitting down at the kitchen table and “whiteboarding” options which might be available to us.
Home-based businesses may be an option. I think we’re going to find that food, clothing, and items of day-to-day necessity are going to be very important in the future. People need to eat, they need shelter, and they’re going to need their houses repaired. Food, shelter, and housing are eternal. But so is truth, honesty, and integrity. Put a home business together utilizing these concepts!
There are communities which are setting up bartering facilities so if you’re a bookkeeper who needs his roof repaired you become part of this community of people who trade services. There are many of us who are unemployed. We need to think creatively, out-of-the-box as they say, so perhaps you might consider putting together a local group of service oriented professionals who are willing to trade services. Its basic, it’s mundane, but it also may save you many thousands of hard dollars a year. I’ll let you work out the details but if I can find some successful model I will present at in this column.
Till Next Time,
D. Stewart Armstrong
Consultant to Junior Mining Community
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Posted by D.Stewart Armstrong in Articles