Thursday, March 31, 2011

Worse than it appears

Greetings good citizen,

The, er, ‘near collapse’ of the world’s financial markets is purported to have been caused by reckless lending/investment, of course, the official version is ‘speculative’ rather than ‘reckless’ but it turns into the same difference.

Is it really ‘reckless’ to, er, ‘lend’ money to people you ordinarily wouldn’t GIVE a dollar to for a cup of coffee?

Worse, of course is the ‘unsubstantiated income’ part of the puzzle. For CENTURIES banks have DEMANDED absolutely rock solid proof of both income and employment before approving even a modest loan.

So what the fuck happened? Did bankers suddenly ‘lose it’ and start handing money out to anybody that asked, because they asked?

Um, no…in fact something much more sinister was going on behind the scenes.

First and foremost the, er (now global) ‘economy’ had arrived back to the same place the US economy had been thirty years ago, that forbidding place they call ‘saturated markets’.

And the only way to shake more business out of chronically ‘underpaid’ consumers was to ‘loosen credit’.

And the only ‘safe’ way to lend to, er, ‘marginal’ borrowers was to have the government ‘guarantee’ the loan.

Anyway, push come to shove and pretty soon we’re talking a quadrillion dollars here!

Seriously good citizen, is the WHOLE FUCKING WORLD worth a QUADRILLION DOLLARS?

Because if it is, then we have a Zimbabwe situation on our hands where the problem folds in on itself, how much can a dollar be worth?

The answer, as we are finding out, isn’t much at all.

Like that weren’t bad enough, ‘throwing good money after bad’ is only making the whole situation worse.

The entire US housing market is (very generously) estimated to be worth 7 trillion dollars.

Our current ‘dearth of buyers’ situation probably drops that generous estimate by more than half, you’d be lucky to get 2 trillion for the whole US market (considering how much of it lies in an ‘economic desert’ now.)

So where does this ‘thousand trillion dollar’ figure come from?

Why, the same place all values come from, the greedy heart of the investor (coupled with the ‘bottomless’ pockets of the government.)

But that’s not the problem is it? The problem is how much of this ‘imaginary value’ is going to ‘leak’ into the real economy?

This is the shit ‘hyper-inflation’ is made of. It is the same thing that leads to 2 bottles of spring water and a pair of watercress sandwiches ‘fetching’ nine figures.

At which point the ‘money’ has gone ‘beyond funny’.

When the ‘scrap value’ of the paper exceeds a note’s ‘face value’, you know you’re in trouble.

This is precisely why bankers are being rewarded with million dollar bonuses.

If you or I had fucked up this bad we’d be staring at prison time!

Anyway, more than three years into this monumental cluster fuck and things STILL aren’t on an even keel.

Naturally, some of that is due to NOBODY BEING PROSECUTED for the original crimes, (which is a crime in itself) and the fact that nobody has enacted legislation to curb these destructive practices from continuing. Another crime but hey, we can just keep stacking ‘em up because ‘rich men don’t go to jail’…

Something that is likely to remain true…although if I remember correctly, the elite of King Louis’s court spent their brief last days in the Bastille before they were beheaded.

I’m thinking most of today’s elite will never see the inside of a courtroom, most of them will be tried and executed on the streets.

We’re even seeing some of the same behavior on display that was seen during those perilous times.

Which is to ask ‘do the poor even exist if we do not see them?’

My own sister was living out of her car…but I’m a lot ‘closer to the ground’ than your average resident of a ‘gated community’ is.

My job, as I keep pointing out, is to bring the big picture into focus for you. If you cannot see the ‘treachery’ of those who would cheat you out of everything they can get away with, It’s not because ‘nobody’ was pointing it out…although I am as close to ‘nobody’ as you’re ever going to get!

How sad is it good citizen that in the space of fifty years we find ourselves stranded aground on the exact same shoals we wrecked on in the late 60’s?

And until we alter how and why things get done we will keep on, er, ‘crashing’ here.

Just another tidbit for you to chew on.

Thanks for letting me inside your head,


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