Betting the farm on a United States economic resurgence

From what I read the United States is now guaranteeing $7.4 trillion in loans and bailouts and there is no end to this rising figure in sight. Our whole national debt since the nation was born is only $10 trillion. So if what they are doing does not work they could easily double the national debt in a year or two and we would meanwhile still be in a depression. Under those conditions the dollar would be finished in the world and America would be finished as a viable nation.

These people are betting the whole farm that they can get corporations and banks back in the black. If they continue to lose money many trillions of dollars will have to be created out of thin air and the dollar will be devalued until it reaches the price of toilet paper.

I think you should be informed about what the issues are and what is really going on. The Fed and the Treasury have been given unlimited money to go “all in” on this last bet to save our economy and they are putting up the whole USA as their collateral.

It was high stake gambling that got us in this mess in the first place. Almost all banks and investment institutions were gambling 20 to 50 times the value of their corporations on hedge funds and derivatives. They kept almost nothing in reserve to cover their loses thinking they could not lose. They borrowed twenty to fifty times what their corporations were worth in order to play at the tables. When the sub-prime market tanked and they lost a few bets they were too leveraged to cover them and they were bankrupted.  Since almost all financial corporations are now in the same boat they are all going bankrupt. The recession and tight lending is also making even the non speculators go bankrupt because so much wealth was removed from the system that these corporations cannot pay or even borrow money to keep their contract commitments. So the government is now stepping in and covering all corporate debt by the government. However, the government has no real money so they are using trillions of dollars of taxpayer IOU’s.

Those who gambled created huge bubbles that should never have been blown. The deflating of the bubbles is removing much wealth that really existed only because of unrealistic profit expectation. The government should have let these go out of business because once the government gets involved they insure and encourage additional unrealistic speculations.

If the government losses this final bet and the economic system keep deflating it will bankrupt the government of the United States and our government will either default on its debts or they will have to pay off their debtors with monopoly money causing a hyper-inflationary spiral that will bring a hyper-inflationary depression that could only be stopped by complete economic collapse and more depression. That is why they are in a panic.

If the government wins the bet it will be sort of business like usual but the loans from the government still have to be paid back and corporations can only do this by rasing prices, cutting workforce, and cutting pay and benefits. Thus, they will reduce the standard of living for stock holders, wage earners and pensioners and that of course lowers government tax revenues. So government deficits would stay high bringing higher interest rates for anyone still stupid enough to risk lending to the United States. If the United States keeps spending more than it collects, sooner rather than later it will bring a devaluation of the dollar and lower standards of living in the United States.

It is rather strange to me that the same people who allowed, encouraged and participated in the leveraging and speculation of banks and corporations are the same people that the government is now trusting to fix the problem. That is also true of Obama’s economic team. These are the same people with the same thinking that helped cause the problem in the first place. Now we should all trust them to go to the roulette wheel and bet the farm that the ball will fall on black? The facts are, if it falls on red we are finished as a viable nation in this world and if it falls on white it does not mean there will not be another worse crises a little down the road.

One thing I find incredible is the man who ran on “change” is putting all the same establishment people into power. You cannot get real change from the entrenched establishment elite. If they knew anything we would not be in this crises. Instead of leadership in a Democrat controlled Congress you now have a Congress that is giving out their responsibilities and unlimited power to Treasury bureaucrats and a Federal Reserve bank that is owned by the very banks it is bailing out?

One way of making Obama change is to give him a dollar. He will give you ninety cents worth of promises and ten cents in change. I always warn about “Lips Law”. Which says, that whatever a politician promises when running for office you will get the opposite after he takes office.

Obama promised change but you will get the same tired Democrat polices of the liberal Left. Probably much like that of Jimmy Carter. Obama’s slogan was “yes we can” but he will find out that he cannot with all those negative thinking people in the United States. Therefore, I predict that by the last year of his first term. That Obama will establish a national year of positive thinking.

Everyone will be told Oprah’s “Secret” that we get what we believe and what we speak in existence. Then for the next year you will only be allowed to say positive things about Obama so he can get reelected unopposed. In his second term he will create a new position more powerful that Hilary’s. It will be called Secretary of Divine Counsel. All hail Oprah and her divine earthly creation Obama. OO

I am adding this paragraph and link to a speech Dick Morris made because his speech really explains everything I said and more in a way that anyone should be able to understand. Believe me he gives a pretty scary picture. Like future hyper-stagflation, and a national health care system that will ration health care for the elderly even after Obama is out of the picture. Morris also thinks Obama will make the same tax mistakes of Herbert Hover. He says you are absolutely giving Barack Obama and Nancy Pelosi and Harry Reid a total blank check to pass anything in the world without debate if they get the 60 seats in the Senate. He thinks the runoff in Georgia will decide that. I guess Morris thinks Minnesota will be stolen in the recount. I say they already have the 60 votes necessary to not have debate because the two independents will vote with the Democrats and if necessary the Democrats will just change the rules of the Senate.