Saturday, January 31, 2009

Obama Pledges Mortgage Help/ Buying into Keynesian Group Insanity…

What Keynes had in mind was to build up savings during the high points of cycles and then to use that surplus later to smooth out the downturns (this has been twisted into never ending deficit spending). What Keynes and his modern day ilk do not understand is that the simple math behind never ending growth simply does not work over time as that growth eventually turns exponential…

The mechanics of a debt based money system favors the central banks. While Obama realizes that what's left of the middle class is disadvantaged and he struggles to "do something" to help them, he is at the same time surrounded by the very same people who helped create the unworkable math in the first place.

Make no mistake; while he may struggle to do the right thing, President Obama has wrapped himself with central bankers who have stated that they prefer to see a one world system that is owned and controlled by the central bank. Their vision is of a world where everyone and every country has already spent their future productivity and is thus indebted to them. In this way, the future labors and production of mankind belong to them. Sound radical? That's exactly where they have us headed. I ask you to please assimilate the facts, understand the math, and realize that I sounded just as radical three years ago when I was talking about the credit bubble popping and economic storm that we face. Now here it is, and it's not over, not by a long shot.

Obama pledges mortgage help

"In his weekly radio address, the president said he will soon unveil a plan that will help lower mortgage costs and revive lending."

“…and revive lending?” See, that’s the problem in a nutshell. Everyone wants to revive lending. Basically they are saying, “Let’s recreate that credit bubble because it was so much fun!” How about stimulating some savings? That’s what’s going to happen regardless. This is more “pushing on a string” against consumers who already possess too much debt.

"Soon my Treasury secretary, Tim Geithner, will announce a new strategy for reviving our financial system that gets credit flowing to businesses and families,' Obama, a Democrat, said in his weekly radio address. 'We'll help lower mortgage costs and extend loans to small businesses so they can create jobs.'"

Republicans, who opposed the president's stimulus package of over $800 billion largely because of its spending priorities, suggested mortgage help as well, proposing government-backed 4% fixed-rate mortgages for "any credit-worthy borrower,' Senate Republican Leader Mitch McConnell said.

'The availability of these low-interest loans would increase demand for houses significantly and low-interest mortgages would boost household income,' McConnell said in a separate radio address. "

Huh? See, here are people who don’t understand the difference between credit and income. People don't need more credit, they have too much already! What they need is real income from producing something other than a paper shuffle. I think what McConnell meant to say is that by fixing low interest rates consumers can take on even more debt, or they could choose to save or spend the difference in a refinancing, but guess what? That won’t happen. And, there is no free lunch. Forcing interest rates down, no matter how they do it will also devalue the currency, once again proving that there is no free lunch in economics.

The very notion of a money system that requires never ending growth is just insane, it is an attempt to defy math over time and cannot work for sustained time periods. People throughout the world have borrowed their future productivity away – they have pulled their income forward. Now it’s time to pay up – even better, it’s time to get to work creating a sustainable long term dollar system that is not based upon debt, but is instead based upon productivity (no, that would not eliminate private party interest).

Step one in the transition? Eliminate the fed, let the free market set interest rates, create a legitimate market place and regulatory framework for legitimate credit derivatives, eliminate all speculative derivatives, and force the “bad banks” to mark to market immediately. Yes, most of the “bad banks” would be instantly insolvent and would die. Too bad, but there are plenty of good banks and budding entrepreneurs who are ready and willing to fulfill legitimate banking roles.

Oh, and lockup the bad actors like Hank Paulson, Jamie Dimon, John Thain, Angelo Mazilo, Bernie Madoff, and many others! You get the idea. They all belong behind bars, especially Hank Paulson who, in my opinion, has done far more damage to investors and the United States of America than Bernie Madoff could even imagine. No, he was not acting on behalf of America and Americans; he was acting on behalf of himself, Goldman Sachs, and all the other criminals who knew exactly what they were to doing to rob the citizens of this country.

Unfortunately, President Obama has surrounded himself with more Keynesian nut jobs. I say that not as a joke, but in all seriousness. It is quite literally insane to continue to attempt to elevate deficit spending deep into the multi-trillion dollar level in an attempt to re-inflate the world on behalf of the central bankers. It is quite literally insane to continue spending more on our “defense” than the rest of the entire planet combined.

Chalmers Johnson – Keynesian Military Spending (6 minutes):

It is insane to create a Ponzi system of social welfare and to expect it to last. It is insane to pull the bad assets from the bad players and to hold the taxpayer responsible (Aggregator Bank Concept… Who Are We Helping?). It is even more insane to create a Ponzi system of finance and expect never ending growth in the first place. If that concept hasn’t sunk in yet, again, I recommend that you, President Obama, and his Keynesian friends Spend some Time with the Good Dr. Bartlett…

While they are at it, they should see in full color the heights to which this nation’s debt levels have soared by reading Death by Numbers, they will then see that the Math No Longer Works... They will also find that we are so far away from our own constitution and founding father’s vision that it’s unrecognizable – My MONEY 'tis to thee...

Now, if you think all of that is radical, then all I can say is, by all means, just do nothing until the markets have lobbed off 90% of their value! When we have all awaken from our mass delusions and group insanity, then we can get about the business of creating a sustainable system going forward.

While I applaud some of the moves taken by President Obama, he must wake up to the math and surround himself with people who understand the situation, it’s root causes, and who the bad actors are. Here’s a hint Mr. President – whatever the current crop of central bankers suggest, do the opposite!

It’s time. Doing the right thing will be painful, but continuing to do the wrong thing will be even more catastrophic. It’s time to turn the page, Mr. Obama… They're hurting down on Mainstreet.

Bob Seger – Mainstreet:

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