Tuesday, September 22, 2009

Time To Rant: Banksters Blowing Out Country

The posts here are about men being raped by family courts, or by laws constructed by a male-hating class of radical feminists (cough, Pelosi, cough). But this post is about what's happening on a much larger economic scale.

Most people are simply wildly ignorant of what's actually happening. I'm a complete nerd who does nothing but research random economic theories and the general study of finance, politics, sociology, psychology, and history, so allow me to fill you in.

The country is on the path to complete ruin. That's right mom and dad: THIS ONE. YOUR country. I'm not talking about Zimbabwe here. I'm talking about the good 'ole U.S. of A. If anyone lost count, we've committed some 20-odd Trillion to the financial crisis between bailout and promises. The Government is now holding up three industries with its bare hands, BORROWED money and re-structured laws that encourage accounting fraud and racketeering. That 700 billion we gave away to multi-million dollar-swallowing, self-aggrandizing banksters last year? Yeah, we didn't have that stuffed down the front of our pants. That money is being borrowed in the bond market, a massive fixed-income debt market that could hold 10 stock markets in its back pocket.

Let me be as plain as I can - insiders report that the normal issuance of T-bills (debt issued by the Feds that they promise YOU and me will pay back), is about 20 billion a week. Sound like a lot? That's because it is. And what do they issue these days? Try 200 billion per week. That's insane. That's beyond the pale. Even with people and sovereigns (that's foreign governments) fleeing into the bond market to buy, the buyers are COMPLETELY overwhelmed by the massive issuance of U.S debt. So what? So this is a freaking problem. Here's why. The interest rate on bonds determine the interest rate we pay on the national debt. If that interest rate gets just a TAD too high, we're effed. We don't pay down national debt - we just roll it over - borrow anew to pay off the people we owe - PLUS INTEREST. As the amount of interest we have to pay - JUST the interest - will get so large, the country won't be able to make its debt payments - at that point the United States, the beacon of financial stability - must either default on its debt (cataclysmic) or else, MONETIZE the debt (that's a big fancy word for printing dollars out of thin air and using them to pay the nation's debts). So what are they doing? (They being the boneheads "in charge.") They're printing money like Hell and using it to purchase the T-bills being issued. Get it? The Federal Reserve board uses PRINTED money to purchase DEBT issued by the U.S. Treasury. Cute, eh? It keeps the purchases of T-bills up and interest rate paid on them down (rates and prices on bonds move in opposite directions). Its often referred to as a PONZI SCHEME. Its highly risky and ALWAYS collapses.

Check the value of the dollar lately? DXY is the dollar index. Its getting slaughtered - go figure. The Chinese, Japanese, South Koreans, and Germans are less than thrilled with us printing them into OBLIVION. You see those people hold MASSIVE amounts of U.S. dollars (T-bills) and if we're printing like crazy, the dollar value will crash (more printed dollars means the dollars currently in circulation are worth much less); that's something john q. public is finally starting to figure out as well. Prices of everything are rising thanks to the print-fest being run by the private Federal Reserve Board.

Bottom line is that there's no way out of this but to kill the big banks (as they tried to kill themselves). Bailing them out is causing the Feds to print to avoid defaulting on their debt, but all the printing is killing the value of the dollar, which will increase consumer prices, and make the Fed back off their printing. They wind down T-bill purchases and the like by October and mortgage security purchases, asset-backed securities and the like by year end. That could allow deflation to take hold again and drive the value of the dollar up (oh no), which makes interest rates rise, and anything priced in dollars (including houses) fall. That's a good thing for nearly everyone but the big banks, who will order the Fed to go back to printing immediately (The Federal Reserve board is private, not public, they can do whatever they like), re-pressuring the dollar again, raising consumer (yours) and producer (your boss) prices all over again. This will repeat for as long as 4-10 years or until the weight of our debt and interest payments CRUSH us.

Think it can't happen? Interest is an exponential function. Do some math. We're not getting out of this alive unless the big banks stop being the black hole of our money that they are. And given that the banks OWN congress.... WE ARE UP THE PROVERBIAL CREEK.

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