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Guest Post: A Fistful Of Dollars - Part Two

Submitted by Tyler Durden on 05/01/2011 15:26 -0400

Submitted by Jim Quinn of The Burning Platform

A Fistful Of Dollars - Part Two

It is not easy to destroy the greatest empire in the history of mankind. The 20^th
Century was the American Century, but as with all empires, the
combination of hubris, monetary debasement, imperial overreach and
delusional overconfidence have set in motion the inevitable downfall of
the American Empire. The policies, decisions, beliefs, and institutions
implemented over decades have led the country to the threshold of
financial disaster. Based on my observations, a catastrophic combination
of demographics, fiat currency debasement, titanic levels of debt,
smothering taxation, power in the hands of the few and Wall Street greed
have led us to peak Empire. It will be downhill from here as we
experience collapse, revolution and ultimately, retribution for the
guilty and presumed guilty. I have already addressed the Baby Boomer
generation’s contribution to our current plight, to the delight and
accolades of Boomers across the land in For a Few Dollars More – Part One. The
Boomers were a victim of their size and the timing of their arrival on
the scene of empire collapse. Their delusions of debt based wealth and
me first attitude could not have been satiated without the creation of
the Federal Reserve and the institution of the personal income tax in
1913.

“When a man’s got money in his pocket he begins to appreciate peace.” – Joe – Fistful of Dollars

“Every town has a boss.” – Joe – Fistful of Dollars

In the Old West of the 1800’s, before the creation of the Federal
Reserve, money in your pocket meant gold or silver. If Joe were to
repeat that line today, he would change it slightly:

“When a man thinks he’s got money in his pocket he begins to
appreciate the good things in life like McMansions, BMWs, government
provided retirement, government provided healthcare, and delusions of
ever increasing wealth.”

Man made inflation is a glorious invention for the men who invented
it. For the people who deal with it every day, not so much. Joe knew
that every town had a boss. If you didn’t know who the boss was in the
United States of America before 2008, you know now. Ben Bernanke and the
Federal Reserve Bank of the United States is the boss of this town.

Crony Capitalism Pays for the Cronies

Without Federal Reserve intervention in the financial markets since
September 2008, the biggest banks in the world would have entered
bankruptcy liquidation. The U.S. economy would have experienced a 10% to
20% fall in GDP. The unemployment rate would have soared above 15%. The
stock market would have fallen 70%. Wealthy bondholders and
stockholders would have seen their wealth cut in half. Incumbent
politicians would have all been thrown out of office. The richest
Americans, constituting the ruling class, would have borne the brunt of
the pain.

In a true capitalist system, organizations and people who assumed too
much risk and made poor decisions would have failed. But the United
States does not have a capitalist system. We have a corporate fascist
economic system where a small cartel of bankers, military weapons
suppliers, and mega-corporations set the agenda for the country through
their complete capture of politicians and the mainstream corporate
media. At the height of the crisis in 2008, President George Bush
revealed whose side he chose:

“I’ve abandoned free-market principles to save the free-market
system, to make sure the economy doesn’t collapse. I feel a sense of
obligation to my successor to make sure there is not a, you know, a huge
economic crisis. Look, we’re in a crisis now. I mean, this is — we’re
in a huge recession, but I don’t want to make it even worse.”

George Bush was born with a silver spoon in his mouth. He was not
trying to save the free-market system, because we didn’t have a free
market system. He was saving his fellow billionaires under the cover of
saving the average American. Bush knew as much about saving our economic
system as he knew about when to declare mission accomplished in Iraq.
He turned the task of saving the free market system over to his
multi-billionaire Goldman Sachs Secretary of Treasury Hank Paulson and
the real boss of Washington DC, Ben Bernanke. These noble American
patriots proceeded to save the top 1% richest Americans on the backs of
the American middle class. They did it under the guise of keeping the
country out of a Depression. Those who committed the crimes and
destroyed the worldwide financial system not only didn’t get punished,
they were enriched by the actions of Paulson and Bernanke. This entire
sordid chapter in the history of the American empire from 2008 until the
imminent collapse, sometime before 2015, will leave future historians
dumbfounded at the utter insanity and foolishness of the decisions that
were made during the death throes of the empire. Not only did George
Bush not save the free-market system, but he drove a stake thru its
heart.

To boil the entire 2008 financial collapse down to one word, it would be: DEBT.

Three decades of ever increasing levels of consumer, corporate, and
government debt eventually led to an unprecedented implosion. It was as
predictable in 2008, to those who understand the fiat monetary system,
as it was to Ludwig von Mises decades ago:

“There is no means of avoiding a final collapse
of a boom brought about by credit expansion. The alternative is only
whether the crisis should come sooner as a result of a voluntary
abandonment of further credit expansion, or later as a final and total
catastrophe of the currency system involved.”

Federal Reserve – Destroyer of Worlds

The 2008 crash and the 1929 crash were manmade disasters. Alan
Greenspan and Ben Bernanke created the atmosphere and conditions that
led to the risk taking by bankers, home buyers and consumers. Monetary
expansion, excessively low interest rates, the Greenspan/Bernanke Put,
disinterest in regulation, and pandering to politicians allowed the
party to get out of control. Taking away the punch bowl never crossed
their mind. The Federal Reserve is controlled by the major Wall Street
banks. These banks were partnerships until the 1980s, with partners
personally liable for the actions of their banks. Excessive risk taking
meant possible personal bankruptcy. Once they became corporations,
excessive risk meant excessive compensation for the executives, with the
downside being borne by the shareholders.

But that wasn’t enough. The executives were large shareholders, so
they convinced the Federal Reserve to bail their corporations out
whenever they made bad bets. It was a sweet deal if you were a banker.
Knowing their lackeys at the Fed had their back, the goliath Wall Street
banks used their power and wealth to convince the SEC to waive the 12
to 1 leverage rules so they could leverage their balance sheets 40 to 1.
This meant that a 5% loss in their capital and they would be insolvent.
The Harvard MBA CEO titans of the financial world created the housing
bubble through their creation of fraud inducing mortgage products, a
bewildering array of derivative products that even their MBA geniuses
didn’t understand, and betting against the derivatives they were selling
to their clients. When this toxic brew of fraud and debt exploded in
their faces, the value of the assets on their books plunged by 30% to
40% in 2008 and 2009. The 10 biggest financial institutions in the
country were effectively bankrupt. An orderly bankruptcy liquidation
that wiped out the bondholders, stockholders and top executives was the
solution to excessive risk taking and failure.

This was an unacceptable solution to the billionaire class that owns
half the financial wealth in the country. The President was a
multi-millionaire. The Treasury Secretary was a billionaire. There were
250 millionaires in Congress. The top executives of the banks that own
and control the Federal Reserve are multi-millionaires. The owners and
talking head pundits of the mainstream media are all in the
billionaire/millionaire class. The cover story used to bilk $700 billion
from middle class taxpayers into the coffers of Wall Street mega-banks
was that if we didn’t hand over the loot, the financial system would
collapse and a Great Depression would ensue. Every program, policy, and
rule change that has been rolled out since September 2008 by the Federal
Reserve, Treasury, and Congress has benefitted billionaires, bankers,
and politically connected corporations. The Federal Reserve has printed
over $2 trillion out of thin air to save the billionaires that have been
pillaging the middle class for decades.

The Federal Reserve bought $1.25 trillion of toxic mortgages from
Wall Street, allowed these banks to borrow at 0%, threatened the FASB
into suspending mark to market accounting so banks could fake the value
of their loans, instructed banks to rollover commercial real estate
loans as if they weren’t really worth 40% less than the value on their
books, and rolled out $600 billion of QE2 in order to create a stock
market rally, benefitting their billionaire constituents. The $800
billion stimulus program was shoveled to the corporate friends
(contributors) of Congressmen across the land. Cash for Clunkers
benefitted government owned car companies. The home buyer tax credit and
changing loss carry back rules benefitted mega home builders. Every one
of these deeds enriched bankers and billionaires while further
impoverishing the working middle class. Real middle class wages continue
to fall, unemployment remains near record levels, real inflation in
food and energy is running above 10%, senior citizens haven’t gotten a
Social Security increase in two years, savers are getting .25% on their
savings, home prices continue to fall, and future generations will be
stuck with the bill for the billionaire bailout.

The standard of living for the average American continues to fall.
Real household income is lower than it was in 1999. The only reason it
increased in the 1980s and 1990s was the huge influx of women into the
workforce. Two earners were needed to try and maintain a constant
standard of living. Real average weekly earnings are lower today than
they were in 1970, even using the government bastardized CPI calculation
that has been so massaged since 1982 that it has only resulted in a
happy ending for government bureaucrats at the BLS. Calculating the CPI
exactly as it was calculated in 1980 reveals the truth of what the
Federal Reserve has wrought on working class America, a drastic decrease
in their standard of living. The insidiousness of Federal Reserve
created inflation has sucked the life out of the middle class and
enriched the cocktail party class.

Real Average Weekly Earnings

The stealth transfer of wealth from the working middle class to the
richest in our society was done through convincing the middle class that
buying things with debt made you richer. This delusion was sold by the
billionaire owned corporate mainstream media and peddled by billionaire
bankers to the masses through credit cards, “creative” mortgage
products, easy access to home “equity”, auto leases, and easy financing
products. Only in a society where a fiat currency could be printed by a
central bank with no requirement that it be pegged to an anchor such as
gold, could such a staggering amount of debt be accumulated.

Delusions of Debt

The bill that has been rung up is in the form of a national debt that
has increased by $4.6 trillion since September 2008, a 48% increase in
two and a half years. Over this same time frame real GDP has increased
by $200 billion, a 1.6% increase in two and a half years. Over this same
period, the Federal Reserve has tripled their balance sheet by adding
$2 trillion of debt. Think about this for one second. The leaders of the
great American empire have burdened future generations with $6.6
trillion of new debt and increased the Gross Domestic Product by $200
billion. Is this a good return on investment? Did the 30 million
unemployed and underemployed Americans benefit? Did the 45 million
people on food stamps benefit? Did the 11 million households who are
underwater in their mortgage benefit? Did the 3 million people who lost
their homes in foreclosure since 2008 benefit? Are Americans paying
twice as much for groceries and gasoline benefitting? Did the Tunisians,
Egyptians, and other poor people around the world benefit?

The answer to all these questions is NO. The only
beneficiaries have been bankers, billionaires, mega-corporations and the
politicians who were bought off by these greedy traitors to the
Republic. Anyone with an ounce of sense knows the country got into this
mess due to the issuance of mountains of debt that was un-payable based
upon any reasonable assessment of future cash flows to service the debt.
Consumers could never have increased their wages enough to pay off the
credit card, mortgage, home equity, student loan, and auto debt they
accumulated since 1980. The government could never collect the amount of
taxes needed to pay for the $100 trillion of entitlement promises they
have made over the last four decades. By 2008 we had reached peak debt
delusion.

The only questions that remained were how would the debt be defaulted
on and who would bear the brunt of the default. The Federal Reserve
Chairman and the U.S. Treasury Secretary rolled out a master plan that
revolved around convincing the masses they were being saved, while
actually enriching their masters on Wall Street. Their PR machine and
captured mouthpieces throughout the mainstream media and in Congress
spun the fear mongering message of Depression if the mega-banks were not
handed trillions of taxpayer funds.

The proof of what did not happen is borne out in the chart below,
showing the total credit market debt in the U.S.at $52.6 trillion, $200
billion higher than it was in 2008. If those who had collected billions
in fraudulent profits while using unprecedented levels of debt were
rightfully required to take responsibility for the catastrophe they
caused, the debt levels would have dropped dramatically. The losses
would have been borne by those responsible. The economy would have taken
a body blow, all Americans would have been hurt, and many billionaires
would have become millionaires or even paupers. The debt would have been
written off and lessons would have been learned. The remaining banks
(there are 8,000 others besides the 10 who control 50% of the deposits)
would have followed traditional risk mitigation methods and the economy
would have recovered.

But, as you can see, debt was not written off. No bankers were harmed
during the making of this fake recovery. No criminal bankers were
prosecuted. No government drones took responsibility for their failure.
While the masses were distracted by stimulus packages, mortgage
moratoriums, Obamacare and reality TV, the debt was shifted from the
criminally negligent banks to you. The proof is right on the Federal
Reserve website for all to see:

Financial institutions reduced their debt from $17.1 trillion in 2008 to $14.2 trillion today.
The Federal & state governments increased their debt from $8.7 trillion in 2008 to $11.9 trillion today.
The GSEs (Fannie, Freddie, Sallie) increased their debt from $3.2 trillion in 2008 to $6.4 trillion today.
Corporations increased their debt from $7.0 trillion in 2008 to $7.4 trillion today.
Household debt declined from $13.8 trillion in 2008 to $13.4
trillion as the Federal Reserve backstopped the write-off of $600
billion of bad debt by the banks.

Over $6 trillion of toxic debt was shifted from the insolvent
financial industries to the middle class taxpayers under the guise of
“Saving the System”. Bad debt does not become good by shifting it to
taxpayers. The story line about Americans embracing austerity is false.
Household debt rose from $8 trillion in 2000 to $13.8 trillion in 2008, a
72% increase, and has declined by 3% due to write-offs, not austerity.

Champion of the Middle Class

By extending the debt, shifting it to the taxpayer and pretending it
is payable, the Federal Reserve and your government have chosen, to use
its weapon of choice since inception in 1913 – INFLATION, to default on
the debt. It is not a new tactic, it is their only tactic.

The Federal Reserve has slowly and methodically destroyed the
American middle class through relentlessly printing more money and
purposefully creating inflation, since its reprehensible creation in
1913. For the last three decades only one voice in the wilderness of
Washington DC has fought this banking cabal.

“Since the creation of the Federal Reserve, middle and
working-class Americans have been victimized by a boom-and-bust monetary
policy. In addition, most Americans have suffered a steadily eroding
purchasing power because of the Federal Reserve’s inflationary policies.
This represents a real, if hidden, tax imposed on the American people.

From the Great Depression, to the stagflation of the seventies,
to the burst of the dotcom bubble last year, every economic downturn
suffered by the country over the last 80 years can be traced to Federal
Reserve policy. The Fed has followed a consistent policy of flooding the
economy with easy money, leading to a misallocation of resources and an
artificial “boom” followed by a recession or depression when the
Fed-created bubble bursts. In conclusion, Mr. Speaker, I urge my
colleagues to stand up for working Americans by putting an end to the
manipulation of the money supply which erodes Americans’ standard of
living, enlarges big government, and enriches well-connected elites, by
cosponsoring my legislation to abolish the Federal Reserve.” – Ron Paul – Sept 10, 2002

His colleagues in Congress did not stand up to the Federal Reserve in
2002. Instead, they cheered them on as Greenspan’s ultra loose monetary
policy led to the greatest housing bubble in history and a financial
collapse unparalleled in human history. As the collapse was hurdling
down the track in 2006, Representative Paul once again rose in protest
against an organization that is rapidly destroying the American dream.

“The coming dollar crisis is not likely to be “fixed” by
politicians who are unwilling to make hard choices, admit mistakes, and
spend less money. Demographic trends will place even greater demands on
Congress to maintain benefits for millions of older Americans who are
dependent on the federal government.

Faced with uncomfortable financial realities, Congress will seek
to avoid the day of reckoning by the most expedient means available –
and the Federal Reserve undoubtedly will accommodate Washington by
printing more dollars to pay the bills. The Fed is the enabler for the
spending addicts in Congress, who would rather spend new fiat money than
face the political consequences of raising taxes or borrowing more
abroad.

The irony is that many of the Fed’s biggest cheerleaders are the
same supposed capitalists who denounced centralized economic planning
when practiced by the former Soviet Union. Large banks and Wall Street
firms love the Fed’s easy money policy, because they profit at the front
end from the resulting loan boom and artificially high equity prices.
It’s the little guy who loses when the inflated dollars finally trickle
down to him and erode his buying power. Someday Americans will
understand that Federal Reserve bankers have no magic ability – and
certainly no legal or moral right – to decide how much money should
exist and what the cost of borrowing money should be.” – Ron Paul – July 11, 2006

The dollar crisis is upon us. Congress and President Obama are
avoiding the day of reckoning. The Federal Reserve is enabling
profligate spending by politicians, while at the same time enriching
their masters on Wall Street. Everything being done in Washington DC
seems to be the exact opposite of what should be done. I think the fable
of the scorpion and the frog describes our situation best. The scorpion
asks a frog to carry him across a river. The frog is afraid of being
stung, but the scorpion argues that if it stung, the frog would sink and
the scorpion would drown. The frog agrees and the scorpion stings the
frog during the crossing, dooming them both. When asked why, the
scorpion points out that this is its nature. The Federal Reserve is
printing money, creating inflation, enriching billionaire bankers, and
dooming the country to certain collapse because that is its nature.

My intentions have been foiled again. I realize that my attempt to
put our current economic predicament into perspective will now need to
be a five part series. . For a Few Dollars More addressed the Baby Boomer impact on America’s decline. A Fistful of Dollars examined
how the Federal Reserve’s actions over the last few decades have
impoverished the middle class and has placed the country at the brink of
collapse, The Good, the Bad, and the Ugly will
address the nefarious creation of a central bank and the implementation
of a personal income tax in the dreadful year 1913. Outlaw Josey Wales will
scrutinize the looting of America by a small group of powerful,
connected, super rich men lurking in the shadows, but pulling the
strings on our puppet politicians. Lastly, Unforgiven will detail the impending collapse of our economic system and the retribution that will be handed out to the guilty.

I can’t wait to see how it ends.

- advertisements -

Sun, 05/01/2011 - 22:14 | 1226953 Fred C Dobbs

No they will be just like you. Be prepared for it being all your fault.

Sun, 05/01/2011 - 17:29 | 1225978 booboo

We know who, how, when, where and why. Everyone and their brother is a Financial Nostrildumbazz, what we need is a Financial Sheriff with a BIG JAIL and a hangin partay cause lying ain't no way to make a living.

Sun, 05/01/2011 - 17:41 | 1225996 Lndmvr

Stop the Ron Paul love fest. After a book called " End the FEd" he shows up on Fox saying , " I won't end the Fed" yyada yada yada. I hope the ones from the last go round that voted with thier money hold on to it until someone says and can show prior resolve to et to the real prblems of the country. Like I told my wife with the last ammo buy. You just need a couple more than the bad guy or save 1 just in case.

Sun, 05/01/2011 - 20:47 | 1226646 Waterfallsparkles

I agree. Ron Paul has gotten a little squemish for my liking. Looks like they have gotten to him.

Sun, 05/01/2011 - 17:44 | 1225998 lynnybee

I'm bookmarking this article as a "favorites." .......... liked the clear, easy to understand & plain old truth-telling from this author.

Sun, 05/01/2011 - 17:56 | 1226012 rufusbird

Oustanding read...sent it to a few friends...

Sun, 05/01/2011 - 18:01 | 1226020 ebworthen

Buying the present with the future leads to paying for the past in the present, eventually.

Sun, 05/01/2011 - 18:51 | 1226131 topcallingtroll

You have some great quotes.

Sun, 05/01/2011 - 18:09 | 1226029 linrom

What's the end game-- Gold, and you all are going to cheer the next big swindle put into motion by the bankers, GATA and the FED!

Sun, 05/01/2011 - 18:24 | 1226045 Use of Weapons

Ok, here's a little history:

I spent the last 5 years working my ass off [tm] on a small business [when cashed in, roughly £2mil - peanuts, really - but a lifestyle business, so it works a little differently than most other models - read "large overheads". Let's say, roughly £4-6 if it was a 'proper' business]. I'm very sore about the entire deal, since it was a family business, and my advice: "Sod all of this - there's a huge recession coming, dump everything in gold and forget this dream" [yes, missed silver] was ignored. Put it this way - if people had taken my advice, the family would be +£10-15mil, not getting a silly +£1mil on a shitty 5 year return of 200k / year with added "wasting my time".

Now, I've waded through the obvious impediments to business:

#1 Stupidly high Rates, taxes, pre-taxes and general nonsense, for no services I've actually recieved, ever. Oh, and PAYE, which can kiss my ass - the local [20 mile radius] economy is totally fucked, and we're hiring and spending on staff. And wait... we're paying local councils to stuff their gills? Fuck you.

#2 Utilities through the roof - and fraudulently mismanaged. In one case, a 2 year case went to the Ombudsman - which was ruled in our favour, then revoked. Then ruled not twice, but three times in succession more and more in favour of Corporations.. and each time... you guessed it? Their figures got better, and were believed every time! Even after I'd proved that they were falsifying them. [No, really: if anyone can tell me what type of industry can draw 600 KW an hour for a month, please forward it on. Apparently, a rural business can. A rural business that doesn't actually use electricity for anthing barring lights.]

#3 Hiring people who don't want to work for a living. Seriously. I had a client on site tell me (about 3 years ago - he was an officer in the airforce): "It isn't enough to show you're smarter, funnier, working harder and leading by example... sometimes you just have to crack the whip". I ignored him - hey... this is a lifestyle business, surely any muppet can see that its an easy ride if you all do your fair share and support the boss... right?

Wrong. I spent more time sorting childishness out from my work force than my client base. It was close, but: endgame - I neither wanted to employ any of them, nor did I want to deal with the childishness of my clients anymore. Oh: add to that - getting sued by them on dismissal for gross negliance or falling over or anything they could get away with.

#4 Macro-Economics. Bottom line: It doesn't matter how good my 'Brand' was; it doesn't matter how friendly we were, and how professional the service, and how much return business we got, or how much people wanted to be on the list to use our services. Bottom line: when gas hits X, wages are going down, costs are up -- we're a lesuire / lifestyle business, and we'll get burnt. We got burnt a whole lot less than some due to effort spent, but... there's nothing you can do about the macro as a small business owner.

End of the day, I cashed out with 0 debts and roughly market value - which given the playing field was fairly good going (put it this way - given the 'family' angle, I'd have bet for total bankruptcy in 2007ish).

/Rant over.

In the same time I wasted 5 years, my brother worked for a major bank. Can you guess which of us has a stable long term future, and which one of us managed (thankyou) to ditch just before collapse? Yep. Bottom line: if you don't want a society, then you won't get one. I'm now 100% behind an epic readjustment of living standards, and it sure isn't going to be me who can't weather the storm.

'Cause, for one thing: I've already done the "living in poverty, in fear of the next pay day and the quiet desperation of running a small business".

I've done it. Now it is your turn, methinks. Enjoy it when the party ends, banksters. 'Cause trust me - this party is sure going to get ugly. Mine's a frapachuniowithextrafrothandbuckshot.

Sun, 05/01/2011 - 18:29 | 1226062 topcallingtroll

A very good rant indeed.

I can see the gathering stormclouds over my small widget servicing business too. It may soon be time to terminate my remaining 1 and 1/2 employees and just take it easy.

Sun, 05/01/2011 - 18:34 | 1226076 Yits and the Yimrum

well said; let the reckoning commence without delay!

Sun, 05/01/2011 - 19:36 | 1226285 Pain Train

+1. I think many small business owners (former or current) would agree.

Sun, 05/01/2011 - 20:21 | 1226544 JR

This is the war, and the more you read, the more you can see the supporting and allied units coming in on your side.

The people squeezed in the middle can make a difference; America isn’t yet Stalin’s Russia. The bankers only win when their corruption is kept quiet and they can operate under the radar. The more the lies are exposed, the weaker the financial elites’ position. People are tired of their bailouts, their wars, their excuses, their scorched earth economic policies, the earnings up 69% from last year for Exxon Mobil Corporation while Joe 6 Pack pays $4.49 for each gallon of gas at a station near me and earns $7.25 an hour pushing hamburgers and fries.

The SF Chronicle carried a story today from Bloomberg Businessweek that says surveys show optimist is fading at small businesses. Here it is :

Small-business owners are reporting a bleaker view of their finances and the direction of the economy than they were at the start of the year, according to three surveys released recently.

While small-business sentiment had registered broad improvement during the second half of 2010, the most recent polls of business owners by Wells Fargo/Gallup, Discover/Rasmussen, and the National Federation of Independent Business show that expectations for recovery have deteriorated.

Optimism appears to be faltering among small-business executives, even as their counterparts at larger companies expect conditions to improve. The dim assessment shows how severely small businesses' finances remain damaged by the recession.

"It's going to take a few years to get back to normal," said Marc Bernstein, head of Wells Fargo's small-business segment.

The bank's quarterly survey, conducted by Gallup and based on interviews with 602 small-business owners, showed that they rated their finances somewhat worse in April than they did three months ago. Owners' expectations for the year ahead dropped more steeply. Overall, the index score of zero represents a neutral outlook, down from 12 last quarter. The measure had been below zero - indicating a negative outlook - for all of 2009 and 2010

The National Federation of Independent Business' Optimism Index, based on 811 responses in a survey of members, slipped by 3 percentage points, to 91.9, in April - the lowest level since October.

In the Discover survey of 750 businesses that have fewer than five employees, 54 percent of respondents said the economy is getting worse, up sharply from 41 percent the previous month.
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/04/30/BU9V1J9UVF.DTL#ixzz1L9GNCssD

Sun, 05/01/2011 - 19:07 | 1226161 Moe Howard

Nice read. Now BTFD as it happens, I see on my desktop silver and gold ticker that silver is $43.41. Hmmmm. Might have to purchase a few American Silver Eagles ........

Sun, 05/01/2011 - 19:32 | 1226258 Pain Train

You guys who keep thinking that the American masses will one day wake up to the reality of our economic situation and demand that the ship be righted are delusional. There is one and only one thing that will cause Americans to realize what has happened: hunger. Real, physical, gut-gnawing hunger. When they can no longer eat what they want, when they want...when it takes a wheelbarrow of dollars to buy a Big Mac...then, and only then, will the reality of our economic situation dawn on the masses. Short of this, they will be distracted by the sitcoms and the reality shows, and the con will continue.

Sun, 05/01/2011 - 20:04 | 1226455 TriggerFinger

I would have read this article, but I was too busy out buying some cans of Alpo with all the money I stole from Quinn's generation.

signed, Boomer

Sun, 05/01/2011 - 20:05 | 1226463 oldmanagain

No suprises to the economic and political collapse. Adam Smith outlined the scenario long ago in the Wealth of Nations. The lifetime of solvent government bonds is about two hundred years from start of debt until the collapse. But debt is not the only culprit, the concentration of wealth writes the final chapter. This is quite evident recently even tho only a decade ago we had a handle on the situation but junked it for the Bush idiocy.

This time it is different. Historically, bad crops, plaques, etc. produced local calamaties. This time we have banded the whole world together to face the Maltusian moment of truth and added the stress of a less favorable climate. What is discouraging is how many rants actually support the theories that caused the mess. We may see "what animal spirits" actually mean, and its not lower taxes. Taxes are a bargain compared to possible other outcomes.

Sun, 05/01/2011 - 20:33 | 1226594 Ned Zeppelin

"The richest Americans, constituting the ruling class, would have borne the brunt of the pain.

In a true capitalist system, organizations and people who assumed too much risk and made poor decisions would have failed. But the United States does not have a capitalist system. We have a corporate fascist economic system where a small cartel of bankers, military weapons suppliers, and mega-corporations set the agenda for the country through their complete capture of politicians and the mainstream corporate media."

See how we are. Succinct and chillingly accurate. Few (outside this website) understand this simple fact. This is the way it is.

Sun, 05/01/2011 - 20:37 | 1226598 Ned Zeppelin

"The richest Americans, constituting the ruling class, would have borne the brunt of the pain.

In a true capitalist system, organizations and people who assumed too much risk and made poor decisions would have failed. But the United States does not have a capitalist system. We have a corporate fascist economic system where a small cartel of bankers, military weapons suppliers, and mega-corporations set the agenda for the country through their complete capture of politicians and the mainstream corporate media."

See how we are. Succinct and chillingly accurate. Few (outside this website) understand this simple fact. This is the way it is.

Sun, 05/01/2011 - 20:47 | 1226651 topcallingtroll

If you want to see an example of the extreme selfishness of boomers and how they will mass "in full force to bring the state down" on the rest of us to extract money and burden our children with debt check out bicycle repairman's comments.

He has proved the author's main point.

Sun, 05/01/2011 - 20:59 | 1226681 Bicycle Repairman

Your children = my grandchildren. I intend to leave them a social contract.

What surprises me is that you honestly believe if SS went away you'd get some kind of bonanza. TPTB will take from the boomers and give to you. LOL. Maybe you were born last night.

There will be a decade of austerity. And you'll pay up and grow up. All of you gold-plated Reagan babies.

Sun, 05/01/2011 - 21:25 | 1226764 malek

You will not succeed confusing the issue here on ZH.
The problem is Medicare, not so much SS. I wish you live long in good health, but then you will not get from gov't what is promised as of today, in real terms (not just nominal). It is mathematically impossible. Try to prove the opposite if you're so smart, or cope with it and plan accordingly.

Sun, 05/01/2011 - 21:59 | 1226894 Bicycle Repairman

Not looking to confuse the issue. No doubt some debt will be repudiated. SS and medicare will be at the end of the line. What was the last change to medicare? It was Bush's ridiculously expensive drug benefit. So is the trend towards cuts in medicare? Not so far.

You'd better plan. I've got my own funds. You're getting austerity no matter what happens.

Sun, 05/01/2011 - 22:49 | 1227164 malek

End of the line will not spare it from cuts. I missed the part where any democratic incumbent opposed Medicare Part D.
And I am actually looking forward for Obama to propose something like "Medicare Part E" beginning of next year to win the next elections. You think that's impossible? Yeah, I also would have thought that if someone told me "they will extend all Bush tax cuts, and not reduce spending at the same time, but further reduce receipts by lowering SS withholding by 2%."

Thanks, I have been planning for the last 15 years. But with 2 decades for me to go until retirement and none of my retirement savings in a 401k or other gov't controlled scheme, the Obamacare Medicare tax extension onto dividends is likely going to hurt me. Especially if you take into account that you're retirement savings need to grow by 9% annually just to keep up with inflation, and that's before taxes on that "growth".

Hope you got that covered too.

Sun, 05/01/2011 - 23:51 | 1227816 Bicycle Repairman

Doesn't matter who is president. The spending will continue. Look for 5%-10% inflation a year, just like in the 1970s. Inflation will continue as long as it has to. Have I got that covered? Yeah I do, because I lived through the 1970s. Been there, done that.

Sun, 05/01/2011 - 22:01 | 1226902 PulauHantu29

Wall Street Greed + Sheeple Apathy + Ignorance = The Fall of the Empire

Read Niall Fergusson's book about The Fall of Roman Empire.

Mon, 05/02/2011 - 00:01 | 1227898 sasebo

Just waiting to go up to Wall St. Got my straight edge razor ready.

Mon, 05/02/2011 - 00:23 | 1228051 Strategery

The message to the American people is that the culpable cannot be responsible, and this is for the protection of the middle class. Yes, as a middle class, we will lose a lot. It is like trying to kill cancer with radiation. Sometimes you have to bring the body near death to kill the cancer. The government and Fed have a new medicine: it will keep us alive and just healthy enough to play human host to their cancer. We will die eventually on this medicine, but you won't be able to recognize us at the time of our horrid and cowardly death. It is time for us to stop negotiating with this cancer! Let us eradicate this cancer from America. If we don't, what remains is not worth saving anyway.

Mon, 05/02/2011 - 03:20 | 1228456 Pitchman

THE RULE OF LAW MUST APPLY TO ALL AMERICANS!

The sad fact is, we do have an elite that has put themselves above the law. And, it’s their their self serving interest, driven by a complicit government, that’s responsible for most of our wows. These are not hero businessmen who build enterprise’s enriching our society and communities. These are parasitic looters with no interest in creating anything. They have captured our ‘representative’ government and regulatory bodies and bend them to their will. Lawmakers and regulators are minions, with benefits.

“Tyranny is defined as that which is legal for the government but illegal for the citizenry.” – Thomas Jefferson

Our nation was founded on the principles of a democratic republic and free market capitalism that no longer exist. The choices presented on election day amounts to no more than peanuts or plain; no choice at all. “The illusion of democracy is an insult to our intelligence.”- Zeitgeiest II

Both parties are of the same spinning coin, serving corporate masters in a system of predatory capitalism where profits are private and losses are socialized. Such a system, controlled by a small group of oligarchs and governmental officials, who stand above the law and direct economic outcomes, is not democratic or capitalist. It is by definition, fascist. Yet, the majority of “we the people” stand on the sidelines as if we have no stake in the game.

“You assist an evil system most effectively by obeying its orders and decrees. An evil system never deserves such allegiance. Allegiance to it means partaking of the evil. A good person will resist an evil system with his or her whole soul. – Mahatma Gandhi

As a percentage of our economy, the financial industry has never been so heavily weighted. This weight has nearly ceased to create wealth, except that which is spun off into the pockets of a very few. From a Logical standpoint the Banks no longer serve their purpose of capitalizing a vibrant business community but generate bonuses by extracting rents. Further, they fabricate the illusion of viability covering up losses or not realizing them. According to Christopher Whalen of Institutional Risk Analytics, “The fraud and obfuscation now underway in Washington to protect the TBTF banks and GSEs totals into the trillions of dollars and rises to the level of treason.”

In spite of $Trillions in government backstops and $Trillions more in bailouts the biggest banks still sit atop $trillions in non performing debt and highly speculative derivatives, (toxic assets). Instead of cleaning up their mess, funds have been used to further consolidate (to bigger to fail) and in speculation; creating bubbles. Financial reform and FASB accounting gimmicks aside, the money center banks are worse off than two years ago. Forced to Mark assets honestly many, are insolvent….

“if the king and his princes aren’t going to punish the people’s tormentors, isn’t it the right of the people to unseat the king? Didn’t a document some rubes signed back in 1776 say just that? To be perfectly clear, this unwillingness of current leadership to “shake up the tree” while the fruit of that tree is poisoning us, gives us the right to defy that leadership.

We the People accept that Justice is not divine and have thus acquiesced that justice must be guided by process to minimize error and the persecution of the innocent. However, the king’s abandoning the pursuit of justice is not a legitimate use of process, it is an unjust act favoring one group of citizens beyond all others, to which the People have every right to respond, including decorating lampposts with tyrants and banksters….” -

THE RULE OF LAW MUST APPLY TO ALL AMERICANS!

“Tyranny is defined as that which is legal for the government but illegal for the citizenry.” – Thomas Jefferson

The following coment to a Bill Black piece is profane:

"if the king and his princes aren’t going to punish the people’s tormentors, isn’t it the right of the people to unseat the king? Didn’t a document some rubes signed back in 1776 say just that? To be perfectly clear, this unwillingness of current leadership to “shake up the tree” while the fruit of that tree is poisoning us, gives us the right to defy that leadership.

Inflection Point

Mon, 05/02/2011 - 13:49 | 1230674 kevinearick

peak empire ...

Guest Post: A Fistful Of Dollars - Part Two

Crony Capitalism Pays for the Cronies

Federal Reserve – Destroyer of Worlds

Delusions of Debt

Champion of the Middle Class

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