Fiat currency is now our undoing. The US congress voted the Federal Reserve Act into existence in 1913 and since that time we have seen the US dollar eroded to a worth of 5% of its original value. We stood idly by as Nixon unilaterally shut the gold window in 1971, untethering the dollar from any anchor to reality. No wonder the French hate us. It was because they wanted to convert their dollars to gold Nixon told them to pound sand. How do you like that for balls? I wonder what the Chinese are thinking right now. I’ll tell you what their thinking. They just moved about a billion people from the rice patties into the cities to man their newly built shod factories where they produce products half as good as what Americans can make and then charge a quarter the cost. They’re thinking holy shit. How do we keep a billion people making stuff if the Americans aren’t there to buy it? You think we have a problem on our hands. Just wait until the orders stop rolling in to China and all those assembly workers have to move back out into the rice patties. I’ll bet a thousand bucks they see revolution before we do. They just got their first taste of capitalism and they ain’t gonna want to go back to the stone ages. Just like we don’t want to go back to work.
Over the course of the last few decades the middle class of our society has become acutely aware of economic bubbles, corporate corruption, government cronyism, and a wall of deception built in the name of the almighty dollar. The facts are the facts. The gap between the rich and poor in the US has never been wider. This entire nation was duped into the belief that if you had things, like a bitchen house, or a cool car, or took expensive vacations that you were rich. Not so. Somewhere along the way we forgot that debt was a claim on our future income. A liability no matter how you dressed it up, with teaser rates, no annual fees, no income documentation to qualify, it was all just a claim on our future. Well the future is here. The four horsemen of the apocalypse bear down on us every waking moment. Their coming for their claim. And they want our souls.
This crisis began when banks pushed exotic mortgages as a means to realize a dream. The institutions that sprung up around this colossal ruse churned trillions of dollars into new homes made of sticks and stucco. When the mortgage machine was running full blast US dollar reserves parked overseas flowed back into this country as fast as you could say “escrow”. Free market capitalism, however perverted this chapter was, was working. However, when it went bust the free market broke down. The Fed stepped in and replaced the arms-length buyer. Our central bank is now the sole purchaser of mortgages in the US. All prices are hence distorted as the free market no longer exists. US GDP is about $13 trillion dollars. The Fed has already purchased $1.0 trillion in MBS directly and about another trillion in toxic assets. This cannot go on forever. This is known as monetizing debt and will lead to a form of financial destruction the likes of which will make the Great Depression look like a day at LegoLand.
This is it. There is no other game in town. When the Fed quits buying mortgage backed securities from Fannie Mae, Freddie Mac, FHA, and whoever the hell else is still stupid enough to be lending into this clusterfuck, it’s game over. System collapses. Markets evaporate. All wealth gone. Martial law. Riots. Every man for himself. Perhaps the greatest revolutionary soul in all history, Thomas Paine, wrote as the opening line in his series of pamphlets, The Crisis – “These are the times that try men’s souls.” The Crisis was written during the American Revolution and cut to the heart of the ideas and beliefs of great men who chose freedom over tyranny. And if you don’t think that our modern system of selective taxation and fractional reserve banking with a secretive privately owned central bank and the fiat currency of which they force you to accept is not tyranny, then we are of a different opinion.
It is a federal crime to walk into a grocery store and pay for your food with gold. If that isn’t tyranny, I don’t know what is. What is it going to take for this country to wake up, pull our collective thumb out of our ass, and march on the streets of Washington? I’ll tell you what I think it’s going to take. First, it’s going to take real estate values to finally capitulate once and for all to the overwhelming negative forces that so far have been held at bay by the Federal Reserve. Second, it’s going to take the US population to wake up and realize that the unemployment rate is twice what the government reports. Third, when what is left of our savings and 401k money is gone and we have nothing left to sell on Craig’s List we’re going to see a lot of desperate people taking to the streets.
Had the Federal Reserve not bailed out the banks by swapping perfectly good US Treasuries for worthless toxic assets, had they not stepped in to become the sole buyer of mortgages in the US, had they not bailed out every imaginable banking misstep our entire economic system would have collapsed at their feet. Isn’t that the definition of failure?
Do everything you can to convert all your assets to cash or cash equivalents. Do not hesitate to buy physical gold and silver even at current prices. Prepare for the worst. Hope for the best. Vote every incumbent politician out of office barring (NYSE:R) Ron Paul and (NYSE:D) Alan Grayson. The Federal Reserve has got to go. They have pulled the biggest heist in the history of our planet and we sit idly by cheering them on to do more. Are we really that stupid?
Finally, if you don’t believe my ramblings then visit ShadowStats.com read the open content section and browse the headlines of the subscriber section. I am a paid subscriber to this site and have found it to be the only sanctuary of truth in the midst of this manufactured fog.
Disclosure: No Positions