American coinage now based on unsecured mortgages loans.

And here comes the bailout! I freaking knew this was coming. I mean, all you had to do was watch the game tape from the Savings & Loans scandal. Nothing like socialism for the rich! Of course, when someone gets bailed out, someone has to pay. That person is you, me and your grandma.

As you have probably heard by now, the Fed and JP Morgan are coming to save their boys at Bear Sterns. I suspect JP Morgan will be owning Bear Sterns by Q3 of this year, but that’s a whole different matter. That’s private capital, they can do whatever the hell they want. The Fed, on the other hand, is public capital. Again, you, me and your grandmother are the backers of the Fed.

Of course the Fed is a private organization, so there is no accountability for the asshat moves they are making this week. Here is one of my favorite moves:


The borrowings from the Fed will be secured by collateral furnished by Bear Stearns, and the Fed, not J.P. Morgan, is bearing the risk of losses if that collateral falls in value.

Thats a pretty sweetheart deal for J.P. Morgan. So basically the Fed has let Bear Sterns swap their unholy securities backed by mortgages for safer Treasury bonds. What this means is that the Fed is now backing the US Dollar on said mortgages.

By fiat, our coinage is now backed by the defaulting loans across America. This has to be one of the stupidest ideas ever. I challenge anyone to find a historical model of where a country got out of a economic slump by devaluating their own money. History will not be kind on this move.

And the worst part is Bear Sterns is not a bank. Never has been a bank, never will be a bank. It is an investment house. So technically they cannot even use the Fed’s discount window to access yet another $200 billion dollars the Fed is injecting into the  money supply. They have to get JP Morgan to do that.

Wait, $200 Billoon new dollars in the system you say? Yes, last week, the Fed announced an industry-wide rescue package that would provide as much as $200 billion in loans to banks and investment houses and allow them to put up risky home-loan packages as collateral.

Again, our dollar is now being back by the home-loan meltdown. This is so stupid that the Swiss Franc caught the dollar today. The rest of the world has officially stopped all dollar buys, and all but refuses to even pick up the phone if Bear Sterns or other such cash strapped banks and investment houses are calling from America.

See, investment houses are like a dude with a black box. You are never allowed to see inside the black box, but the dude assures you there is quite a bit of loot in that box. Plus, if you put your loot in the magic black box, it will magically grow like they are magic beans. Of course, everyone needs to believe in the power of the black box for this to work.

If people no longer believe there is loot in the black box, they will stop putting money in said black box. If enough people lose faith quickly enough, the black box is complete worthless and the dude goes broke.

Bear Sterns is that dude right now.

The intervention by J.P. Morgan and the New York Fed shows Bear “didn’t have enough money to turn the lights on this morning,” said Carl Lantz, strategist at Credit Suisse. “And in a big picture sense, this isn’t that comforting.”

Wait, I remember this story!

Went something like this:



Bear Sterns is the Duke Brothers, except in reality we have Republican Socialism that keeps private enterprise from failing. If only the Duke Brothers lives in our fantasy world instead of the one Hollywood creates.

But in the world of Republican Socialism, the Duke Brothers are saved by you, me and your grandmother. And when you are paying $10 lb for chicken, you will have the Fed to think. And the Fed doesn’t get a crap about what you think, because they are a private organization.

And the first thing to solving the riddle of Republican Socialism is to make the Fed accountable to the people of these United States of America, and not the hedge fund row, and only to the hedge fund row.

Why the coinage of the US dollar is not under government control is probably one of the best kept secrets in America.

And as always, it has to do with money.



Bonus:

The entire wealth of the USA is also in a black box. The world has recently decided that our black box is pretty worthless. In effect, they have decided our dollar is pretty worthless.

What these means, as Republican Socialism fails, it exposes the ugly truth that the rich are only rich because they say they are rich. If you take away their black box, they would be eating out of dumpster by the end of the month.

Of course to distract the people from this inconvient truth, you better do something drastic. Especially when even Nobel Prize winners calling Republican Socialism a form of looting.

Something crazy, oh say, like attacking Babylon.

17 comments

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  1. http://www.dailykos.com/storyo

    God I love a good meme.

    Let’s get this ball rolling big and strong, because there is still a member of the Keating 5 out there in public life.

    Yes, a man who helped bail out the Savings&Loans back in the day and got his hands dirty doing it.

    His name is John McCain.

    See where I am heading with this yet?

    • Pluto on March 14, 2008 at 10:01 pm

    [I also posted this comment on Four @ Four. Sorry for the repeat, but I’d like you all to see it.]

    Save Yourselves Some Financial Grief

    For my friends at Docudharma, here’s a Really Smart Thing to Do:

    Now would be a really good time to physically hold a foreign currency (in your home).

    Travelex  is the largest currency exchange company in the US. These are the people you buy currencies from before you go to Europe, for example.

    Travelex  now offers a great and private service. No forms (bank docs) to fill out.

    You just go to the link above, select your currency, get an exchange quote, type in a credit card or debit number.

    Your foreign currency will be delivered to your home the next day.

    (You can buy up to $1,500 at a time.)

    You can sell this currency back to them whenever you want to cash in to spending dollars — or you can exchange it for another currency that is soaring. They have thousands of local offices in every city.

    This is also a slick way to invest in safe currencies outside of the banking system.

    The worse that can happen is that the currency might lose a little value against the dollar — but not for the long term. It’s much more likely that it will be worth a lot more than you paid for it.

    At this time, I would buy some Euros and Swiss Francs, maybe some Krone (Norway). The Euro is probably going to $1.70 this year. You can buy Canadian, as well, but it moves up and down, lately, so you’ll have to time your selling days. Still, it is very safe. They are ALL safe, so buy several different ones for extra safety.

    Don’t put this money in a safety deposit box! Or, gold, either, if you have it. (I do not buy gold, but it was made illegal to use in 1932, the last time this happened, FYI.)

    It will be a great source of spending money (when exchanged a little at a time) to buy food and stuff over the summer. I would exchange a couple thousand, if you have it. Just in case. You can also go to your local Travelex office at the shopping mall and use cash to buy currencies. Just keep it under $1500. It’s not a big investment or risk. It’s just smart.

    As a final note, the Mexicans, who actually have a very monied middle class, tend not to use banks. The hold their wealth in hidden pesos. Now, I am told, they are frantically trying to buy Euros — and the Mexican government has blocked these transactions for some reason. (The peso is pegged to the dollar, so they know they will crash with us.)

    Just do it. You have nothing to lose. It may save you some serious trouble. Just pretend you’re Paris Hilton preparing for a European trip. 😉

    • OPOL on March 14, 2008 at 11:35 pm

    Thanks man.

    • pfiore8 on March 14, 2008 at 11:39 pm

    move to another country…

  2. I haven’t chosen the path towards moving to another country based on a whim – but rather based upon hours,weeks,months oh hell probably at least a year plus reading thousands of articles that all point to one conclusion:

    We are not only in a recession – but actually a Depression- the scale of which most people are oblivious to. Today’s bail out is only forstalling the same conclusion – the markets are failing and there is no way to stop it. It would actually be better to let a failure occur – my guess is it will be Wamu – unless the brits bail it out because no US firm will – and let the unfolding damage begin.

    The continued bail outs are only making the situation worse and the ensuing damage greater. But hold onto your seats – because the damaged that is going to occur – most probably this year – is going to be very very scarey.

    • documel on March 15, 2008 at 2:15 am

    Enjoy–or cry.

  3. unless it gets really bad, then I will dump everything and live with relatives in Germany.

    Going to get a degree in renewable energy tech first and then move to Europe with a much higher chance of getting a job.  

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