Debt, gutted balance sheets and manna from D.C.

(work in progress, unedited)

A note from Rhome: Please forgive me. I write via stream of consciousness and since so few actually read what I have to say, I seldom return to clean-up my posts…these are truly “web-logs”. For what it’s worth, I predicted the gutting of the balance sheets of banks and the monopolies since 2002. First on ModBlog, and then on efX2 Blogs. I also predicted the current economic turmoil on the Washington Post under my other screen name, “Vunderlutz”. Sooner or later I will write what we need to do to dig out of the mess we are all in.

Giethner and Bernanke are like two circus clowns dressed as firemen trying to put out a fire. There are two hydrants, one that pumps water and the other kerosene….yep, you got it right. They have both hooked up their hoses to the hydrant with kerosene. Bing, bing, bing, batta-bing…WRONG AGAIN!

It’s not only just plain wrong-minded to bailout bankers and industry (auto mfg’s, airlines, AIG, whoever) who are run by the incompetent or by crooks, or both; bailouts are just plainly not “The American Way”.

Worst of all its counter-productive; it will de-stabilize the economy by causing more freakiness over the apparent weakness of the dollar. The last thing we need to do is create more money based on credit.

The bailouts have been counter-productive from the beginning when Bernanke dribbled in a few hundred billions into the “markets” for “liquidity” and “stability”. Actually, it really began with Greenspan which is beyond the memories and attention span of most of those who will read here. Actually, it began further back with the Keating Five and the S&L bailout.

Fast forward to today…suffice it to say, there are many, many problems facing our economy.

A lack of credit is one because it’s getting the most attention in the broadcast and print media. And, of course, the media should know (gag, barf). And, of course (again), being the healthy paranoiac that I am, I can’t help but wonder about congress’s motivations in passing the Bankruptcy Act of 2005?

It’s almost like: Let’s make it harder for the common person to declare bankruptcy; Let’s turn our congressional eye the other way to outsourcing and illegal immigration, and all along let’s let Bernanke dribble our a few hundred $-billion here and there until the final hit, and when the Fed and Treasury will get a $700-billion to hand out.

Is this a plan? Who knew all of this was coming down the pike? and when did they know it?

However, paranoia aside, and aside of all the hubbub over tight credit and foreclosures lays the biggest problem of them all; the lack of confidence in U.S. currency.

The lack of confidence stems from our nation’s massive debt and what appears to be an inability to repay the debt plus interest. All together, our national debt is near $70-trillion which includes the $10-trillion owed by the federal government, plus private debt, business debt and debt of state and local governments. The interest accruing annually on all this debt is several times our GDP.

We just don’t have any assets on our national balance sheet. We don’t have an adequate national cash flow to service our debt — so we borrow again, create some cash and if something will change. Dumb, dumb, dumb and dumber…

Sure we have farmland, freshwater, our homes, and our rusty out-of-service manufacturing equipment. We also have empty strip malls and small town shops.

I guess the farmland could be dug up a shovel at a time; the buildings and equipment could be dismantled – all of it could be shipped to China as payment on our debt – a brick at a time from a building, a bolt and bearing at a time from a machine and a bucket of topsoil at a time.

A national going-out of business sale! The liquidation of the United States of America? It still wouldn’t be enough to satisfy our debt. At least that’s my opinion.

So what doeth Giethner and Bernanke? They hatch a plot to create more money out of thin air based on more credit. Then they throw the money into the air to fall like manna from Washington. They want to spread it to the four winds…they want our nation’s creditors to believe everything is okay.

Will our creditors really think that? Hardly so. They are already way more than a little bit freaky about the value of U.S. currency and our nation’s debt. What our creditors will think about this new plot by Giethner and Bernanke?

The creditors will think, “Now, what is the f#@$ is going on here? Do they think we’re dumb, or what?” their “little freakiness” will morph into a full-blown, sudden-onset, paranoiac madness of the untreatable kind. The USA IS BROKE!!!

Then the anger will morph into madness, then pure insanity, which will manifest itself by fear…there will be fear in the air…it will be everywhere. It will create the kind of fear that’s gut-wrenching, the puking kind of fear, complete with tremors and a rapid loosening of the bowls.

President Obama would be well-advised to nationalize the banks NOW! And once nationalized, reduce the income the bank employees to match that of any other pencil-pusher. The Obama needs to extend credit…lots of it and cheap.

He needs to buy Bernanke and Giethner a one-way bus ticket to wherever they want to go…so long fellas; it’s been good to know them.

When I told my teenage niece about all of this (I might add, very carefully so as not to scare her), she said, “Well duh, Uncle Rhome, I know that! You wanna go to the mall with me and shop?”

Then she added a comment and said President Obama’s stimulus for consumers is too little.

I guess hope is being sold at the mall. Everything is else is about dead but our desire to consume.

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