With another day of this we'll have to shut down the market. Here is any possibility of $700 Billion helping out going down the tubes, right? Ten years ago today the market closed at 7899.52. That's a far cry from the 13,000's we were seeing last year during the holidays. Roughly 60% give or take. Okay, ten years ago the economy was much heathier. I mean, we were actually paying down the national debt. The famous debt clock, now over $10 Trillion, was going backwards! With the spectacular rise in the Dow comes spectacular inflation, also know as a bunch of overvalued crap. Now how overvalued was everything a year ago? I still don't believe things are at their true value now. Think about it; is a studio apartment in Midtown Manhattan the size of a walk in closet really worth $300,000+. Now what if it's a co-op (you don't really even own it) and have $700 a month in maintenance? And a window unit? And the building is old and decrepit? And there's an upcoming special assessment? Of course units are never like that, right?
How 'bout that gas you pump into your car? Worth it at $4+ a gallon. I hope you don't need premium! $5 is a killer (c'mon, $4.899? That's five buckaroos, pilgrim).
Everything costs too much. It's called inflation. It was made worse by the stimulus checks we all received. I was made worse by giving tax breaks to the wealthy, which in turn made luxury goods more expensive because, well, they can afford it and the luxury goods manufacturers have no issue charging anything they want. Very simply, if there's more money around, everything will cost more.
To make matters worse nobody saved any money. Everything was paid for in credit. The people that aren't high net worth racked up the credit card bills on expensive baubles that seemed so important, like 20" wheels and D&G suglasses. Gotta keep up with the Jones' after all! Real money was thrown away like old newspapers. Even the banks were throwing it all away, chasing after what turned out to be figments of their imagination, like high interest loans to unqualified borrowers that had an ice cube's chance in hell, or maybe to be more modern, the Arctic's chance on Palin's Earth of making it.
Let's think of a way to make an artificial situation that can lead to catastrophe in the marketplace. Let's pick a random point, say, housing. In particular: home sales. Real property if you want to get all technical about it. If you wanted to, and this is all hypothetical of course, to create massive amounts of inflation, and distraction (I'll get to that later), the home market is an excellent place to accomplish that end. Now people tend to see home ownership as the ultimate expression of security and accomplishment in their lives. It is a great undertaking and the feeling of walking into your new home is singular. There is, quite literally, nothing like it.
Now, if you wanted to add some perceived value to the overall market you could do things like, rob the Social Security Trust Fund to pay your expensive war bills or you could make the banks ledgers look like there's tons of money about to come in. Okay, how? Let's start by lowering interest rates to the point that money becomes unbelievably cheap, on a long term scale... to the banks. Now let's find the biggest thing people can buy so they can spend, spend, spend... like houses. Let's think of all the things that people need to fill the ginourmous houses they just bought... on credit (hey, it's 0%, right?... for now). Let's have people spend, spend, spend. Let's see what else they um, need... a new SUV perhaps? How about a flat screen TV? Only a few thousand!
Now while all this money is being spent, a lot of money is being made at the same time. More money made is all the excuse most people, and the companies they run, need to spend more money. The problem is that all the money isn't real. It's credit. It's an IOU. A promissory note written in non-biodegradable ink on plastic cards and stored in digital libraries that know incredibly detailed things about your life. Things you can't remember, or don't even know, like your mother's, mother's, mother's maiden name.
So all this stuff is built up of monopoly money (no offense Hasbro, I love that game!). So where's the real money going? Well, the real money isn't a Stimulus Check because that was just money printed out of thin air. Money in the bank is non-existent until you pull it out. I'm not getting richer. Who's been selling lots of stuff? Maybe expensive stuff like... bombs and planes and warships and... aw shit. Here we are again, just like when Ronnie was president, and WWII. Lots of federal spending on $1000 stainless steel toilet seats. Matching brush only $500 (only in WWII it was bullets and tanks and the sweet smell of freedom, so I guess pretty much just like Ronnie's time! Just more painfully all around).
Anywhere else? Let's see... if I had a consumable good that didn't cost me squat and I could sell at tremendous profit, and have world governments subsidize the cost so consumers don't have to pay $20 a gallon straight out of their own pockets, but just through their tax dollars, I'd make a killing. I'd even buy some Palinticians, er politicians so I could eradicate Polar Bears for fun. I could, with some help from GM, bring the world to it's knees! Moo-ha-ha-ha! Moo-ha-ha-ha!
So, the ones that are actually seeing real money, real US Dollars, want real US Dollars. Now where do you find that, in a world of unregulated (sic) credit run amok? Where might there be a trust fund with trillions (not billions, trillions) of those US Dollars meant to protect the weakest in society just ready to loot? Ah, Social Security. Now how do I access all that delicious money? Maybe I could rig an election or two... Hey, I know! I COULD RIG AN ELECTION (or two)!!! Now how do I get away with it? Ou, ou, ou, I know I could tell everyone that the multi-trillion dollar trust fund is going bankrupt. That's a great idea. I could even tell people we can privatize that trust. You know, put the remaining money in Wall Street so it would, guaranteed, make more. Who doesn't trust the market? Just look at where it's headed!
Okay, your tax dollars go to all that too. That's real money. The fake money is the stuff you don't really own because you have to pay your bills. That's the bank's money. Now where's the bank's money? Tied up in that overvalued apartment in midtown that will probably auction of for it's real value somewhere closer to $150,000, and no, it's not a deal at that price; it's fair market value. It's okay for the banks though, because you had to buy mortgage insurance. They don't by it, you do. On top of all that the banks saw to changing the bankruptcy laws so, even if you can't pay, you still owe them no matter what. There is a way out. It's called suicide, but that may leave the debt to your relatives. Ouch! I didn't know that banks could legally make legislature... hmmm. Maybe it is a ray of hope if the insurers won't, or can't, pay! Like AIG for example...
Basically, all this fearcession stuff is a bunch of hooey designed to distract you while the public coffers are pilfered by the very people that are supposed to be looking out for our collective interest. You're just too busy paying credit card bills and trying to make your mortgage to know what just happened to you.
Credit crisis? I don't smell no stinkin' credit crisis. I smell coffee.
It's like any other insane thing you may ever investigate: just follow the money. Just follow the stench of it all. This time it leads right to 1600 Pennsylvania Ave NW, and there... it doesn't smell like coffee.
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