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 MONEY, IT’S A HIT…………………

NOTE: I was originally going to sequel last week’s political blog with a solution.  This week’s financial meltdown has put that on hold.

This week an icon of rock music died of cancer.  Richard Wright the keyboardist, singer and songwriter from the sixties group Pink Floyd, a musical group that created the incredible album “Dark Side of the Moon” that stood at #1 for over 15 years on the pop charts; an album that probably ranks as one the all-time works of that era that still today stays as relevant and politically strong as when it was released in 1974.

I bring this up not as a eulogy, but as an introduction to the nation’s and world’s financial near-collapse and the things we take for granted that someday we lose without the ability to “fix” or avoid.

The illusion of control is control for most and they are secure with it.  We look to our governments to become mommy and daddy, to make the big bad boogie men go away.  We do not have a clue as to how fragile economies are, much like our lives on this planet.  We hand over control and trust politicians to guide us through life, even though politicians are the most untrustable creatures on the face of the earth.  The divisiveness of modern politics is so emotional and cruel that their campaigns focus on fear to drive you-the cattle-to herd to where they want you to go.  A cattle prod of fear and emotion is the best weapon ever devised as logic always takes a back seat to that ignorance and wrong-headed decisions made under the influence of fear.

We have allowed this “republic” to become far beyond the “military-industrial complex” of the Eisenhower age.  We are now a quasi-Fascist/industry-socialist/forcibly religious prisoners of our own fear.  The meltdown of the financial systems stems from the repeal of the Glass-Steagal Act with the Gramm-Leach-Bliley Act and the loosening and eliminating of regulation at a time when computer trading and incredible computer speed allowed derivatives and exotic financial instruments to seek and plunder pennies on dollars for millions per day. 

It gets worse. The current fiasco is not just Freddie and Fannie; it is the massive amount of CDO’s or mortgage-backed securities that were a derivative invented by Goldman Saks whose CEO at the time was Hank Paulson.  This is squarely what is causing the meltdown. It is the lack of being able to price these CDO’s that has caused the run on the investment banks that bought billions of dollars of them.  It is the deregulation (again Greenspan) that allowed these financial instruments that were based on ‘home values never going down’ that is the root cause.  Paul Volcker, the previous Fed Chairman warned of this deregulation at that time but no one listened.  Those CDO’s are now illiquid and the ‘shorts’ have gone after those investment banks that hold these securities to make massive amounts of money while they bring these institutions down.  I warned of this many months ago. This is not just about donkeys and elephants.

 (See- https://onlymoments.wordpress.com/2008/06/14/slaves-to-the-free-market/ )

CDO’s should have never been allowed to be created.  Remember Greenspan’s 1% interest rate meant investment banks needed more return on their money.  Goldman’s CDO’s allowed the high returns that made them millions until the builders jacked up prices (my wife worked for one and they raised a house that cost 275,000 to 500,000 and then to 750,000 as the rates went lower) and then when FUBAR Greenspan made a speech to Congress (I heard it at with my own ears at the time) telling everyone to buy into a 3-Year ARM, then 6 months later began to raise rates, the obvious happened.  People had bought too much house at too little interest. Speculative investors bought in to the ‘home values never going down’ myth and expected big dollars in flipping…….but I will tell you this much; I know of many families out in the street right now because they have lost jobs the same time as their mortgage rates doubled.  It is a crisis, and it’s not about minorities, these are middle class heart of America people that are homeless, broke, or moving into apartments because they lost their house.  You may not have sympathy for them, but for the grace of God there walks us all.

Mommy and Daddy are gone and we are left with who to blame.  Look in the mirror.  We let it happen, we allowed these greedy imaginative thieves to plunder us on the high seas of finance.  Bailout?  For who?  For the banks, not you. That would be socialism.  We are a nation of suffering a terminal emotional dysfunctional illusion.  Rallying around a flag proclaiming to be the best at everything, to be God’s chosen country is the last gasp of holding on by our fingernails.  This is far from over for the American Public.  The ramifications will be long-lasting and damaging for ‘Main Street.’

There is hope, but we will probably be much too afraid to take the chances.  If I could ‘short’ American attention span, I’d be a trillioniare…….Now you see how easy it can be done, if there was a market for it.

The sun will rise tomorrow, but the world will change with or without you. Control is an illusion we hold close …but as the storm hits…….

“I got mine Jack keep your hands off my stack……………………………but if you ask them for a rise it’s no surprise they’re giving none away, away, away, away”

 

This was originally written in October 2007 when gas was $2.75 a gallon.

It has been decried long before the first Earth Day in the seventies and over thirty years later, we still allow our politicians, oil conglomerates, and irrational perspectives to rule our absurd interconnected world. As the price per barrel rises, we “barrel” into what could be the worst economic recession the world has seen while allowing our dollar to sink to the lowest price relative to other currencies in our history. There are many reasons for slower growth but none so permeating as oil. We feed terrorist countries with huge amounts of cash that they use to purchase weapons from our “allies” to use against us. We allow our economy to be tied to the purchase of that oil and therefore like a heroin addict we can’t break away from the injection.

We use more energy per person than any other country on the planet. Don’t you think it is time for a national coherent plan of action to stop this madness? We need an equivalent of a “moon landing” program, or a war bond campaign of conservation, while the private sector such nuclear (we pay for all waste and cleanup and limit damages in an accident), oil (drilling and lease subsidies, tax breaks),  is given subsidies that have been taken away for alternatives such as solar, wind, and geothermal power to start and then get our automobiles off the track of using gasoline to new technologies of hydrogen, hybrid, natural gas alternatives.

This is your country, you need to become active and demand our government stop this addictive behavior to allow large corporate entities to rule this land by political special interests. This should be an political election platform for our potential leaders, because as I look at the past we are still sitting on our collective butts and wait for government and oil companies to come forth with an answer that is not in their best interest to solve in any form. Now is the time to demand action, or we may be paying in many more ways than at the pump my fellow citizens. You don’t want the extreme ramifications of supply and demand of this “world economy” to destroy what we have built.

We need an Energy Independence Declaration to begin the work to give the private sector the tax breaks they need to innovate and come up with viable alternatives so we can breathe clean air, keep our economy humming, and keep the dollars out of the hands of those who would use them against us given the chance. Your children’s children need a fair shot at a good life.