The Next Great Depression - The Silver Lining

I am generally a pessimist, if you haven't noticed. I have been beating the doom and gloom drum for some time now, and I have been proven right with this developing economic crisis. Let me be clear: we are in no way clear of this mess, and in fact it is just the beginning. This recession will deepen, and will become a Depression - primarily because we are doing all the same things that have brought about this crisis. Obama and the Democrats are spending money we don't have, and like those individual irresponsible American idiots deep in debt they are likewise frittering it away on luxuries that will not stimulate the economy. It is eternally frustrating.

But there is a "silver lining" to this crisis that I am pretty excited about - I have used the word "reckoning" for some time which literally means making things right - it won't be all bad. Here are my optimistic and postive thoughts on the crisis (some serious, some not-so-much, you decide):

1. The Left-leaning areas of the country will fail first - the big cities, California, the Northeast - it will be great fun to see the cities descend into chaos and anarchy as people can't get the things they need and expect and feel they are entitled to - dig a moat around the major cities and we'll all be fine! In the information age we really don't need big cities anymore, so screw 'em! We'll see how long they hold fast to their liberal idealism when the shit hits the fan and it's do or die time.
2. Along the same lines, the current welfare system is just not sustainable under an economic crisis. The worthless bastards that have been leeching off you and me for a few decades now will finally be allowed to fend for themselves, and they'll kill each other doing it. Fantastic!
3. Illegal Immigration will cease - Americans will not allow these people to steal American jobs anymore. This is kind of sad, because most of the illegals are probably great people, but a lot of crime comes with them with the bad apples, so good riddance.
4. Our culture will refocus on what is important. All the trivialities will fade away. First things first will return, because it will be necessary to survive. Not to say we won't have distractions, but that's what they'll be - distractions, not the focus. Maybe American Idol will survive, but not much else will.
5. Sports "stars" will no longer be paid huge salaries to play a game. That will be one of the first things to go. If people can't afford to go to the games, and companies cannot afford to sponsor them, it all trickles down to the talent. Related to #4, maybe the inner cities will refocus on education and values when they see they cannot make millions if they practice really hard at the basketball court.
6. Likewise, Hollywood actors and actresses will not command huge salaries. These huge salaries are just not sustainable, when it is all dependent on a prosperous and paying public.
7. Kids getting away with all the bad behavior that they do in public today will not be tolerated. Remember the days when you could yell at someone else's kid for acting like a jackass? Well, those days are going to return, because guess what: it won't matter if you get sued, because no one is going to have any money!
8. Big payout lawsuits will dry up - no one has any money to sue for!
9. HGTV will go off the air, thank God!!! No home equity loans to do lavish improvements.
10. People will say it like it is - Political Correctness will be laid to rest - if you're an idiot, you will be called one. If you're lazy, you will hear about it. If you're a no-good SOB criminal, you will meet your maker. People will not tolerate flaws of character when things aren't so comfortable and cushy anymore.
11. Global Warming nonsense will no longer be of such importance - when you are struggling just to put food on the table and keep warm, I don't think you're going to give a shit if your lawnmower burns gasoline.
12. The dollar is going to collapse, so everything will reset - no national debt, no personal debt, no personal savings. What you have right now in physical assets is all that you will have, so stock up if you can. People are going to want to get drunk, so invest in liquor. And guns. Lots of guns.
13. The bleeding-heart people who got us into this mess will be unarmed, because they hate guns, so they will not be a problem whatsoever.
14. If the government somehow survives as it is currently constituted and continues down the path to socialism and the USSA, individual states (Texas first) will secede from the USSA to escape the rising taxes and liabilities of Social Security and Medicare. So, we'll have somewhere to escape to with like-minded people! And this new country will be filled with young, hard-working, armed men and women so no one will screw with us!
15. Real work will be valued - not sitting behind a desk punching away at a keyboard, but getting out there and using the hands God gave us to build things, and fix things, and maybe beat the shit out of dangerous people!
16. Family will come first, because that's all we'll have, and it will be enough.

How's that for looking on the bright side of life! This list will probably grow as I think of more things that excite me about the Next Great Depression.

The Reckless Fed and Runaway Inflation

Sometimes, I really do feel that I am going insane.

The Federal Reserve is considering dropping the prime rate from 1% to as low as 0.5% (which would match the all-time low record) or as low as 0.25% (which would be a new record).

I ask: Is Bernanke really that insane/stupid, or is something else at work here?

The financial crisis we are in today is largely due to easy Fed monetary policy over the last two decades, and yet Bernanke, supposedly an expert on the Great Depression, continues to go further down the same path that got us here. The Federal Reserve has already made $2 trillion in loans, backed by taxpayers, and refuse to release information on these massive loans. We have the Treasury Secretary bailing out financial institutions, and the Big Three Auto Makers coming to Washington in hybrid vehicles begging for taxpayer money. We have a $10 trillion US government debt, and close to $50 trillion in unfunded liabilities.

Do these numbers mean anything to anyone?

The "wise" leaders in government feel the only way to get the economy going is to jump start what got it into trouble in the first place: people buying things they don't need with money they don't have. DEBT.

The financial bailout package was not enough to convince banks to begin loaning money again and get the credit flowing into the economy. They are either hoarding the money or buying up smaller banks and consolidating their power. They also are not loaning money to business because they do not know whether these companies are in trouble, are going to receive a temporary lifeline of government bailout money, or if they are actually good credit risks.

So, today, the Fed thinks that if they just open up the money supply a bit more, the banks will finally start loaning the money. This is very dangerous for two reasons:

1.) The cheaper US money becomes, the more that overseas countries that own US dollars may decide they are no longer worth it and will dump them into the system. The dollar crashes, and we have a hyperinflationary cycle as the Weimar Republic had prior to the rise of that pesky leader Adolf Hitler.
2.) The financial instutions hoarding their money finally do release it into the system, and we have massive inflation, or at worst hyperinflation (see #1 above).

Surely Bernanke knows this. Is he really playing Russian Roulette with the US economy, or is something else at work here?

Does he, and others in the US government, know that we have been living beyond our means for some time now, and we have been indulging ourselves in Utopian fantasies of social programs (thanks Boomers) for so long that the massive amount of debt will never be able to be repayed. And rather than saddle our children and grandchildren with the debt, and create generations of slaves and indentured servants, they are purposefully seeking to destroy the value of the US dollar, and thereby essentially wiping out our national debt and unfunded entitlement obligations. Reboot. Start over. Wipe the slate clean. The dollar is worthless, and so our debt is worthless, we pay it off with paper money no more valuable than Monopoly cash, and start over.

Of course, what rises from the ashes, given the Nation's taste for socialism of late, could be quite frightening...

Would the Burning Bush Just Please Shut the @#$% Up?!?

Today, El Presidente Bush once again tried to calm the markets, saying that the economy will recover in the long run.

No fucking shit!

That's what markets do, you dumbass! I thought the $700 Billion economic bailout plan was supposed to fix things? You implied that if it wasn't passed by Congress, Armageddon was here! Now, even after the bailout, we need to have patience? If you just let the markets work (as they are working right now, correcting and causing the necessary pain), we would be right where we are right now, without mortgaging my and my daughter's future in the process.

And have you noticed, that whenever El Presidente speaks, the markets go monkey-shit crazy? He's had more press conferences in the past two weeks than in his entrie presidency (hyperbole intentional), all in an attempt to calm the markets and to try to control something that is uncontrollable. All it is doing is causing fear and doubt in the investing public and McCain's numbers to fall. Hey George, shut the fuck up and ride quietly off into the sunset, would ya?!

Do you know how Ronald Reagan responded to the stock market plunge in the 80's? He did nothing. He said "What goes up must come down" and spent the weekend relaxing at Camp David. Jesus, how refreshing that would be right now!

Now Bush is meeting with the French President at Camp David, and the French President is quoted in a story this morning:

"The world is confronted by the worst economic and financial crisis since the 1930s," Sarkozy was quoted as saying Friday to a Canadian meeting of French-speaking nations. "We need to reflect on the stakes, how we arrived here, who is responsible and what happened. We must draw lessons from it. The world must change.”

Michael Jackson is singing "We Are the World!" right now. The world must change? What the fuck does that mean? I'll tell you what I fear it means to most world leaders - One-World Government, Fascism, Socialism, Communism, and the End of Prosperity and Freedom as we know it!

I'll answer your questions, Frenchie (although I kind of like Sarkozy because he is a conservative):

What are the stakes? The Free-Market system, Capitalism, Prosperity, Economic Freedom and Liberty. All these things are under attack.

How did we arrive here? Liberalism. These Democrat and Republican fuckjobs that believed that it is every person's right and not privilege to own their own home, and enacted laws encouraging/blackmailing banks to lend to high-risk, subprime people, all with the express guarantee of the government sponsored enterprises Fannie Mae and Freddie Mac. The free market would've never allowed this to happen, because high-risk people would've been "redlined" right away!!!

The lesson: Don't fuck with Capitalism and the Free-Market to institute "fairness" or "social justice" or whatever other fucking utopian pipe-dream you motherfuckers dreamed up while high on acid in the 60's.

Just step aside and bring the fucking pain! You are in the process of enabling the worst among us to bring everyone else down with them!

Monkeys are Funny! The Hypocrisy of the Left

Some time ago, when I was taking guitar lessons from a far-left friend of mine, I noticed he had a rather offensive picture on his computer, set as his wallpaper. Needless to say, he his not my friend anymore for a variety of reasons, most of which don't deal with his politics at all. But as the years passed, and as we near the presidential election of Barack Obama versus John McCain (or in my case, versus Bob Barr), the image on my former friend's computer keeps coming back to me.

Here is the picture, or a variation of it, that can be found everywhere on the internet:



Oh, isn't it so funny! Bush looks like such a chimp! Man, Bush is just an idiot, isn't he? What a fool! What a moron! Hee hee! He's so stupid. He looks like a monkey! He IS nothing but a trained monkey!

Now, I've got my issues with the President - I believe he's basically destroyed the Republican Party, and has strayed so far from its conservative and constitutional principles that he might as well have joined the Democrat Party. But creating this collage is just plain wrong.

And I'll show you why.

My fellow liberals out there, so excited for hope and change, how does this picture make you feel:



It is the exact same picture as the one featuring Bush, but now features Barack Obama. I imagine that the same liberals, leftists and Democrats out there who laughed so hard at Bush being compared to a chimp, who pasted it on their computer wallpaper for all to see and snicker at, are now shocked. How dare you! How dare you compare Barack Obama to a monkey! You're a racist and bigot!

As I created this image, I felt awful. It isn't right. It's horrible. It isn't funny. And that's the whole point.

Comparing Bush to a monkey is funny. Comparing Obama to a monkey is horrible and racist.

That, my friends, is the hypocrisy of the left.

Master Bait and Switch!

Today, the Bush Administration announced that the federal government would be buying shares of nine largest banks and financial institutions in the country. The agreement assumes that when the stock market gets going again, and the credit starts flowing and the economy recovers, these banks will buy these shares back from the government.

El Presidente Bush said these drastic measures were "not intended to take over the free market but to preserve it."

Comrade Paulson said "We regret having to take these actions. Today's actions are not what we ever wanted to do -- but today's actions are what we must do to restore confidence to our financial system."

How stupid do these fuckers think we are?

This is a classic "bait and switch" isn't it? The major banks transfer the risk to the government (the government spending money it doesn't actually have), investors start buying shares due to the lower risk, the stock rises, and the banks buy the shares back again, presumably for the same price? And everything goes happily upward on its merry way?

Nothing changes! The magician puts the bird under the handkerchief, and "vola!" the bird disappears - or in this case it's a stinking pile of shit in the palm of his hand. Then, after washing his hands clean and receiving a rousing applause from the crowd, he goes backstage and retrieves the pile of shit from his pocket or his sleeve or wherever the hell he moved it via sleight of hand. The result is the same: the magician is holding a stinking pile of shit!

This country is going stupidly insane - cheer the magician on, dumbstruck crowd!

I'm not fooled.

Financial Crisis Clusterf@#k

As far as I can tell, here's how the current Financial Crisis, and potential Great Depression II, occurred:

1. During the Jimmy Carter Administration, something called the Community Reinvestment Act (CRA) was instituted. Basically, this legislation was intended to limit the process of "redlining," which tended to deny loans to economically depressed areas, and thus minority neighborhoods.
2. During the Billy Clinton Administration, the CRA was strengthened, and banks were encouraged (blackmailed) to make even more risky loans to risky people.
3. The Dot-Com bubble continued to grow, and prosperity seemed endless - Billy Clinton even encouraged investors to keep investing their money, saying that the economy would just keep growing and growing.
4. The Dot-Com bubble burst in a spectacular fashion.
5. Rather than allow the economy to correct, the Federal Reserve, under the chairmanship of Alan Greenspan, dropped interest rates to encourage the housing sector. Dropping interest rates essentially means printing money - that is, it is cheaper for banks to borrow money from the Federal Reserve, and thus lend money to consumers. This effectively replaced the burst Dot-Com bubble with a new bubble in the housing sector, pushing off the recession into the future.
6. Quasi-government companies, Fannie Mae and Freddie Mac, under the guidance of the CRA, began encouraging and backing sup-prime loans - that is, risky loans to people who really couldn't afford them. They did not require any proof of ability to pay.
7. 9/11 hit. The Federal Reserve made money even cheaper to dampen the effect of the terrorist attack, again artificially inflating the housing sector and making money cheaper. The President encouraged people to go shopping. Again, this pushed the recession off into the future.
8. Because of the cheap money, and the ability of anyone who had a pulse to get a home loan, people spent money like drunken sailors. House prices soared. Flipping houses became booming businesses. With inflated home prices, people took out home-equity loans to buy things, the loans backed by the inflated home values. Basically, the economy was booming but fake - the money being spent did not actually exist, because it was just more debt based on inflated home prices.
9. Alan Greenspan encouraged people to take out Adjustable Rate Mortgages, and other mortgage plans (interest-only loans, 2-28 loans, 5-25 loans), assuming home prices would never drop and keep climbing. Basically, these sub-prime loan plans would allow entry into the market at low introductory interest rates, and after a few years would "reset" at higher interest rates - at this time the homeowners would refinance at fixed rates.
10. Over this entire time, some 20+ years, not a single new drop of oil was drilled, nor a single refinery built, due to the influence of environmental groups. As China, India, and other countries grew and prospered, this increased their demand for oil. Oil prices skyrocketed, and prices at the pump did as well. High transportation costs, in combination with the effects of corn-based Ethanol production, increased the costs of basic necessities - food, milk, eggs.
11. At the same time, high risk sub-prime loans "reset" to higher interest rates. Because of the higher cost of living and inflation due to both the cheap money supply, and the higher cost of gas and basic goods, these high risk people could not make their payments. Initial forclosures occurred.
12. The housing market declined, and the artificially inflated home prices dropped. More people abandoned their homes because they were worth less than the mortgages.
13. Housing prices kept plunging. The sub-prime mortgage-backed securities that Fannie Mae and Freddie Mac bundled together and sold throughout the financial system did not have a precise value - no one knew what these things were worth, and did not know if they had any real value.
14. The balance sheets of all these financial institutions go into the red. Credit seizes up -loans are not being made. Major banks and financial institutions go under.
15. To the rescue - the US Government and the Federal Reserve - the cause of the entire crisis!

Essentially, the "fix" being proposed by the US government is to take on all these bad mortgages, remove them from the financial institution's balance sheets, thereby allowing the banks to begin loaning money to people again so they can buy things they don't need! We need to save, not spend!

This is a cultural problem - the people of this country want to buy things when they don't have the money to buy them, and they want it now. The Bailout Plan proposed by the Bush Administration and being debated in Congress once again only pushes the recession/depression further into the future. We cannot keep spending money we don't have! The people of the US do it, just as its government does!

If a Bailout Plan passes, the USA is not the USA anymore. Let's just be honest: It will be the United Socialist States of America, the USSA! The greed and gluttony of this nation brought about this crisis, combined with a feel-good notion of economic fairness and justice. Let the market work as it should - failure is punished, success is rewarded, and the resulting pain refines the moral character of this country.

And above everything, protect the values of freedom and free-markets and capitalism that has made this country the greatest in the history of humankind!

Baby Boomers - The Worst Generation

This may become a series, because I have alot to say on the subject.

My basic premise - the Greatest Generation that suffered through the Great Depression and saved the world in WWII gave birth to the most selfish generation in recent history - the Baby Boomers. The Greatest Generation built this country up from basically nothing, the Worst Generation is slowly allowing it to collapse.

The Worst Generation has inherited the accomplishments of the Greatest Generation, and rather than be good stewards, they have used that inheritance to "change the world" and "leave a legacy" with all their do-gooder, feel-good projects like "Ending Poverty Now," "Peace," "Saving the Earth," and all the other Liberal Bullshit out there. If not for the accomplishments of the Greatest Generation, the Worst Generation would've never been able to endulge themselves in enacting their vision of a "better, fairer world."

Because it is in the news today, I'd like to comment on how the current Sup-Prime Mortgage Crisis fits into this theory. It is fairly simple - the Baby Boomers want to eliminate any form of inequality, and so in passing the Community Reinvestment Act, they essentially forced all banks to give credit to under-served areas (the poor, disenfranchised, bad credit risks), including sup-prime home mortgages. Everything was fine when the economy was humming, and before these sup-prime mortgages reached the point where the higher interest rates kicked in - but then, of course, oil prices rose (largely due to the Boomers not allowing drilling to save the earth) and the higher interest rates kicked in as planned. These high-risk people were hit hard, and they could not make their payments. And thus, because the housing market was artificially inflated due to all this cheap credit, the entire financial system collapses.

It is a simplistic summary. I could go off on rampant irresponsibility in our new Boomer-induced culture, but let's keep things simple: Government, through Baby Boomer do-gooding, caused this collapse. It is the foundational cause - it allowed corrupt people to do corrupt things, stupid people to do stupid things - rather than allowing the banks to assess the risk themselves, and deny loans to people who don't deserve them, and are destined to fail.

Poor people, stupid people, lazy people, irresponsible people, entitlement-minded people, in combination with an entire generation that views these people as victims and wants to level the playing field, is a very dangerous combination. And we see the results today.

The Baby Boomers are destroying this country, all for their own selfish, self-flagellating reasons, and the legacy they will leave will certify their designation as the Worst Generation: the country will be in worse shape than they found it.

I am not surprised in the least that just as the Boomers are retiring, Universal Health Care is coming. These people are going to stick their children and their children's children with a bill of debt that is beyond imagining, all because this selfish generation wanted to "save the world."

If I had any say in the matter, I would say one thing to these people: "You reap what you sow."

More to come.