The Dollar Destruction Derby!
The fact is that ex-Fed chief Alan Greenspan with his 40-year low interest rate has demolished the U.S. economy!
It really is quite simple.
For years the U.S. dollar represented the bench mark for world currency. That dramatically changed when the U.S. stock market plummeted as high tech, over-valued stocks surged downward. Other stocks tumbled. Alan Grenspan, who sat on the sidelines as the high tech boom skyrocketed stock prices, made this observation:
This mild bit of economic common sense counsel had little effect. Like sheep following each other, the high tech stock investors thought the stock surge would never end, and didn't pay much attention to the advice to check corporate profits.
Following the sharp downturn in high tech stock prices, other investors having lost a lot of faith in the overall stock market, there was a huge slide with great losses.
In Greenspan's memoirs "The age of Turbulence" he gave his opinion of the 1987 stock market crash. When the savings and loans had unwisely invested billions in the overheated real estate market, that gigantic loss cost the U.S. government some estimated $500 billion to bail out the savings and loan institutions. In his book, Greenspan on page 177 stated the following:
"We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability.
"Indeed the sharp stock market break of 1987 had a few negative consequences for the economy."
What was Greenspan talking about? The real estate market collapse by the over-extension of credit by the savings and loan industry did have a decided negative effect on the U.S. economy.
Just as in the high tech stock collapse, investors lost hundreds of thousands of dollars and the impact sent ripples throughout the economy. Was the $500 billion savings and loan bailout not threatening jobs, production and price stability?
Of course it was.
After the high tech stock slide delivered a hard blow to the stock market, Greeenspan figured out a unique but dangerous way to salvage the economy.
He sent U.S. interest rates to a 40-year low. Foreign investors in the U.S. currency were ripped off (robbed). So were senior citizens, who invested in certificates of deposit, getting a measly 2 percent return for having full faith and trust in the U.S. dollar.
Who were the beneficiaries of this dollar destruction derby? They were realtors and lending institutions - banks. At a recent Washington Mutual stockholders meeting in Seattle, it was admitted that bonuses were given to loan officers who oversaw risky, sub-prime loans.
This was not just the policy in practice at Washington Mutual, but at a score of U.S. banks. Sub-prime loans for homes were given to individuals with poor credit ratings and insufficient incomes to pay for the loans when the interest rates rose.
Of course, many borrowers, seeing how real estate was skyrocketing due to the 40-year interest rate low, decided to gamble, hoping to flip over their real estate purchases and sell before the real estate bubble collapsed.
In the Golden State of California and the Sunshine State of Florida, prices did skyrocket. Thirty percent of home loans in California were interest-only, tempting those who knew they could never afford the escalating interest rate built into their contracts.
Bush boasted about how well the economy was doing. But after the truth bout the real reasons for the Iraq War were revealed, most U.S. citizens paid little attention to anything he had to say. He flew Air Force One to 50 states, trying to get U.S. citizens to trust Wall Street with Social Security savings.
Again, people in the U.S. flatly rejected that idea of trusting Wall Street with Social Security savings. Bush's popularity dipped so low that national polls revealed that 70 percent of U.S. citizens did not approve of what this Republican administration was doing.
Bankers working with Wall Street backed these numerous mortgages, many of which were sub-prime risky sales contracts. They called them mortgage securities. A large percentage of those so-called "securities" weren't worth the paper they were printed on. The world-wide loss to bankers is estimated at $300 billion to $400 billion.
Has anyone gone to jail for this massive institutional fraud? Not that I've read about. But the C.E.O. bankers have granted big bonuses to themselves, even when they have resigned or been fired.
On May 5, Congress was in the process of bailing out the 2 ½ million homeowners facing foreclosure. These homeowners feel betrayed by bankers when they gambled on their home purchases going up, aware they could not afford a higher interest rate, making them unlucky gamblers.
To walk away from a foreclosure in their homes, it is considered a taxable amount of money (in other words--taxable income) until the home is sold, and the exact amount of losses can be calculated and they then are liable for that money to be taxed as income. This was a reality most hasty buyers never considered.
The 1987 savings and loan debacle cost around $500 billion for taxpayers in the U.S. If the $300 billion bailout goes through Congress, taxpayers will again be forced to fund mistakes of ex-Fed chief Alan Greenspan.
How does Alan Greenspan feel about the many economic experts who blame him for lack of oversight of U.S. financial institutions?
Two million U.S. tourists travel to England and Europe during summer vacation time. With the British pound twice the value of the U.S. dollar and the Euro at 1.55 to one U.S. dollar, the U.S. hard working citizens have been betrayed.
Ian Shepherdson, High Frequency Economics Chief U.S. Economist, said in a May 7 Associated Press story:
"It helps exporters by making U.S. goods cheaper overseas and boasting overseas earnings when converted to dollars." He concluded, "Thank goodness for the weak dollar."
This is another brutal betrayal of the average, hard working U.S. citizen. Greenspan, who has made such a mess of the U.S. economy, waltzed away with an $8 million advance from Penguin Books for "The Age of Turbulence."
The Iraq War has cost hundred of billions of dollars in death, destruction and debt. An Iraqi government signature has not been produced granting the U.S. long term leases of 63 of Iraq's 80 oil wells.
John McCain said he doesn't want to see U.S. soldiers fighting in the Middle East over oil ever again.
Is that what the Iraq War is all about, Senator McCain? Is it all about oil?
This important question should be investigated by the U.S. Justice Department now!
I couldn't agree more. However, Alan Greenspan, slug though he may be, is not entirely responsible for what's happened to this nation or its economy. There are businessmen in the White House, so corrupt they probably even shocked Greenspan, who refuse all attempts to hold the greedy bastards of Wall Street World accountable for a damn thing. For these kinds of crimes, and that is just what they are, crimes of greed, the accountability should reflect the crime and the motive. Take 2/3 of everything they own. put an electronic monitor on them, make them continue to work but only that. There is no sense in the tax payers having to pay for a limited stay at Club Fed. For the rest of their miserable lives they will go to work and come home, with 2/3 of their salary put into the Social Security trust fund. Let them live in a run down trailer park on U.S. 17, or in the slums of some city or the other, who cares? If we did that right now, to every corporate theif we can find, the social security trust fund would be solvent for the next 30 generations.
All it will take is one or two such sentences and businessmen will get their effing acts together, at least for awhile. Then there will have to be a few more such sentences handed down. These people are basically sociopaths or functional psychotics, who find ripping off their fellow citizens (especially older people and poor young working couples, who foolishly believed in George Bush's "ownership society") much more fun than killing them, like Ted Bundy. They have no empathy for others. (Remember the Enron memos?) They just plain don't care. Money is their god and their over-inflated egos are all they can hear. Until they suffer for their crimes, in a way they can understand, they have no motive to stop, even while they are ahead, and the devil only knows what kind of rip-off scheme they will come up with next.
Americans, in the majority, have not trusted Wall Street since, at least, the Great Depression. Nevertheless, it has been shoved down the throats of many working class Americans in the form of 401Ks, pension schemes and the like. Several years ago, we saw former employees of Delta Airlines get letters simply saying that their pension is no more. ("Gee, you really didn't think we would actually pay you the money, did you?") Of course, the guy who made it possible for the pensions to go away and not hinder the corporate officers, with their grotesquely inflated salaries and perks, anymore was given a bonus of $20 million and sent on his way, so he can do the same thing for some other corporation goons.
In an ancient empire, these greedy fools would be the nobility. As I recall from my history classes, the nobility did not fare much better than the emperor and his court, when the peasants finally lost trust in the social institutions of their day. Sooner or later all peasants wake up. Usually because someone finally gets them to see that they no longer need "Daddy," on the thrown. To the degree that "Daddy" and his friends are sick, criminal jackasses who have been robbing the people blind for years, sending their kinfolk off to die in foreign wars just so the wealthy nobility can become wealthier, imprisoning others whose crimes are trifling compared to their own and have basically stacked the deck against the peasants, with impunity, there will be blood shed.
The post-modern day American Corporate-empire is very close to that point. It has become clearer and clearer to the average Joe and Josie, in the last 30 years, that Americans cannot trust their social, governing and religious institutions. (basically, this was one of the messages of Hippies, but few got it.)
Working Americans do not have time to watch every government agency to make sure they are doing their job, most do not have the time or the knowledge to watch the markets. For heaven's sake, Americans don't have the time to raise their kids or care for their elderly! They are all too busy worshiping at the altar of productivity, whether they like it or not. We are like squirrels on an exercise wheel in this country. While we are all busy keeping a roof over our heads and our families clothed, fed and educated, the institutions that were set up to protect us from scoundrels in the market place and other such vermin, to keep the nation's infrastructure, both fiscal and physical, in good shape, to reign in an executive branch gone wild and other such necessities are not doing a damn thing, except passing more laws that make our lives a living hell.
Nevertheless, we are living in a lawless land. Of course we, the peasants, are always the last to know, because all kinds of piddling laws still apply to us, mostly laws to protect the corporate criminals who own our legislative branch of government.
Its is time for a warning to go out, from the people to their instituitons: "Do something or we will."
The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.
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