LUNATICS IN CHARGE OF THE ASYLUM: GOLD, GREED AND DECEIT
September 25, 2008
By watching America’s financial meltdown, the lunatics took possession of the asylum in the past week. What amazes taxpayers stems from the fact that the people who brought us this “1929 Crash” crisis in 2008, think they can solve it by taking even more money that doesn’t exist! Whether Treasury Secretary Paulson begs for a $700 billion bailout or Mr. Bernanke cajoles Congress—American taxpayers foot the bill. Taxpayers foot the bill like friends buying a bottle of Jack Daniels for a 16 year old alcoholic while giving him the keys to their cars.
Americans enable more corruption, financial anarchy and the cartel of Congress.
I spoke with Colorado economist and humorist Michael Folkerth, author of “The Biggest Lie Ever Believed” with his website.
“We are living in historic times, ugly history, but history all the same,” Folkerth said. “One of my readers asked me to simplify what is happening with our monetary and banking systems to Mikeronomics.
“In the words of the King of Simple, Wall Street (including banks) had legal gambling debts that were considered too large to cover. Our leadership said, “No problem, we’ll tax the public to pay your debts and you can get back to what you do best; gambling with other people’s money.”
“I have written for years that Wall Street is nothing more than Las Vegas on steroids. They drain the life blood out of American companies to a point of sending them into bankruptcy or moving off shore.
“Once all the damage was done here in the U.S., they have moved their money and investments to such places are Communist China, Korea, Brazil and India, stating that we must compete in a global world. Hogwash! (that is an economic term)
“Our economic woes didn’t materialize overnight; they began around 1970, when our insistence on exponential growth in GDP collided with physics. The monetary system and matter-energy systems no longer balanced.
“The matter-energy system (all that is real and tangible) must balance with the monetary system (the man-made creation of money). This was the case prior to 1970 as can be seen here.
“While it is absolutely imperative that these two systems balance, the growth of the matter-energy system is constrained by a finite-physical barrier. The monetary system, being man-made, is not. To complicate matters even further, the monetary system grows exponentially or geometrically, due to the power of compounding interest. These facts make the two most important underpinnings of our economic system incompatible. A condition that cannot long exist; and it didn’t.
“This balance of our two most important aspects of our economic system is a well known requirement. A requirement that has been acknowledged nearly since time began. To keep the man made monetary system from running amuck, it was kept in check by requiring a physical element be provided prior to the printing of currency, that of silver and gold. In this way, a semblance of balance was thus possible. Gold from the finite system was required to match that of the creation of paper currency which is infinite. Good plan!
“Around 1970, that balance was no longer possible. The necessity of creating an exponential growing supply of money to match that of compounding interest coupled with the desire to grow population and GDP, was no longer achievable when constrained by the waning supply (and cost) of the physical check and balance of gold….unless that is, the rules could be changed. Bad plan coming up!
“In 1971, America went off the gold standard forever. Now that the pesky constraint of a physical check and balance for the dollar was removed, money could be printed in ever increasing quantities and resource depletion and population growth were non-issues; temporarily. The wisdom of centuries was thrown out the door in lieu of greed, power, false wealth and trying to fool Mother Nature. We would soon learn that Mother Nature is one mean Mother.
“The massive amounts of paper money that could be produced by simply “monetizing debt” opened the door for some of the most elaborate forms of gambling ever perpetrated on the American people (it was your money in the game). Clever inventions such as “fractionalized banking, credit default swaps, derivative trading, short selling and a hundred other legalized scams brought forth the gamblers, fraudsters and profiteers to shear the willing flock on a daily basis.
“But these gamblers and fraudsters are not the shell game hustlers of the dingy city street corner; these shysters are America’s most elite and shall not be chastised as they have the full backing of the best government that money can buy. Don’t believe me? Look at who is paying the gambling debts.
“However, physics trump human rule makers every time and in the most severe manner. The new system of debt accumulation (rather than balance), lasted a mere 38 years.
“During those 38 years of our ill conceived imbalance with nature, the following has occurred:
1. Our funded National Debt has increased from 371 Billion to the current need for a ceiling of $11.3 Trillion, an increase of 3045% over 38 years, or an average of 80.14% per year. As a benchmark, the National Debt increase for the 20 previous years was 69% or 3.45% per year.
2. The U.S. went from the world’s largest creditor nation to the world’s largest debtor.
3. Oil production in the U.S. decreased by 40% and consumption increased by 40%.
4. The total amount of dollars in circulation has risen from approximately $500 Billion to more than $10 Trillion or a 2000% increase. And backed by what? Taxes!
“To this point, I have been speaking about the funded National Debt. I have not included the unfunded debt or the private debt. America’s unfunded debt (promises made for government retirements, Social Security, Medicare etc.), run the number up to $75.1 Trillion.
“And then there is the private debt of some $42 Trillion which rounds up America’s total debt to $117.1 Trillion. This is equal to $386,091.00 for every child in the U.S. After all, that is who we expect to pay for our exploits against balance is it not?
“The U.S. has reached what I refer to as the “maximum debt level.” The monetary system of debt has become greater than all matter-energy collateral on earth from a balanced perspective. The imbalance has become so great, that just one week ago; our entire monetary system nearly collapsed…and should have. And will!”
Mike Folkerth offers a short-course in economics. Our president remains clueless and the corrupt ‘Cartel in Congress’ bows to the corrupt Federal Reserve while we pay the bills.
One of my sources said realtors, mortgage lenders and the like provided no-down-payment to some five million illegal aliens and minority poor without any investigation as to their identities or ability to pay their monthly mortgages. With nothing invested, they lived in those homes long enough to skip out when the bankers chased them down for not paying their mortgages.
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Who holds the bag and ultimately pays for all that corruption? You do! As more millions from Mexico moves into the USA, the more we imitate Mexico. Corruption becomes the norm! Yippee ki yea!