For some months, I have been writing my thoughts on what has been happening around the world both politically and economically. Surely the motto for the past year must be, “If anything can go wrong, it will.”
The day before Thanksgiving, on November 26th, I warned FallenRepublic’s readers about the dangers of Credit Default Swaps. This, unfortunately, seems only to be the tip of the iceberg. There are many more items out there, with financial dollar amounts making the CDS catastrophe seem small as a mouse in a warehouse. For those who have not read my previous commentary on the dangerous nature of Credit Default Swaps, here is a most useful video explaining the problem and quantifying the CDS portion thereof.
Now, this is not the only problem. As I stated before, CDS were only the tip of the iceberg, tipping in at a whopping $50-60 trillion dollars. You normally would not look at $60,000,000,000,000.00 and find it to be a trivial figure, however; you have not yet seen how large the problem actually is. In the following article, I wish to describe the issues directly facing us financially which do explain Washington, D.C.’s haste to prevent bank failures.
This means, every man, woman and child alive in the United States at this very moment owes $24,000 in bailout funds to Uncle Scam. $7.4 trillion dollars is roughly equal to one half of everything produced in the United States last year. One half of all energy, goods and services produced last year have been absorbed to bail out banks and other ailing businesses whose leadership has already proven their ability to run a business into the ground.
The next question becomes, “What if all this does not work?”
Should the bailouts fail, which history tells us they most likely will, our government will be in irreparably insurmountable debt, our populace will owe more than it is worth, and our markets will be in shambles with a rapidly inflating dollar within the next 2-5 years. One needs only to read the history of inflation during the Weimar Republic in 1920′s Germany in order to see the direction in which we are headed. Read the rest of this entry »
Some of my friends have begun to question my thinking in my opposition to any government bailouts of any company, industry or economic sector. My thinking is rather simple in this matter, consider the following:
We are supposed to be a free market economy. When a business fails in a free market economy, its competitors and new, smaller businesses take over the market share. This is a healthy process which allows smaller businesses the capability of growth and larger businesses the guarantee of survival of the fittest.
When a business does begin to fail, most often, the cause of that failure is lack of foresight within that business’ leadership. This is why I believe the bailouts we’ve seen are the wrong answer. Since corporate leaders have used all their private funds in ways which have led to their business’ demise, why then, should taxpayers give them more money in order to repeat the same mistakes? We are only throwing good money after bad and preventing the very kind of healthy processes by which small business grows and new opportunity in the market emerges. Read the rest of this entry »
Bloomberg is reporting today that our government has now pledged $7,400,000,000,000.00 (7.4 Trillion) in bailouts to US and Foreign companies and banks. In such a move we have begun to destroy the free market by socializing the entire financial sector.
Some of my friends have begun to question my thinking in my opposition to any government bailouts of any company, industry or economic sector. My thinking is rather simple in this matter, consider the following:
