Occupy Earth and Occupy Yer Self Cause the Good Ole Days is a Gone!

You know the old saying, if Americans can’t afford a house, we’ll just start selling them to someone else, and if they don’t live here we’ll give them visas. And the other saying we’re all familiar with, if you came here just for the education, wait, we’ll give you a visa so you can stay and work too! Oh, and my favorite, if you let us build a military defense system in your eastern European country we’ll kick down a bunch of summer work visas so when we visit our own national parks we can be taken care of by your students instead if ours!

I know some of you might be a bit confused and might not remember many of these old cliches. I admit it’s been some time since we sold out our own for a new fold. Let me think, that would have been before most of you were born, but maybe some of you remember. I think it was around the turn of the century. You know, when we used to lock the polish immigrants in the factory until their 15 hour shifts were over.

If I remember correctly there was a fire in one of those which really messed it up for the rest of us, or we’d probably still be gathering new folks from other countries still, but only when the folks we have start to ban together and ask for things like food and water while their working. That really cuts into their productivity if you ask me.

Look I hate to be the dick here, but don’t we have something like 12% real unemployment. I know it’s a bit inconvenient to keep counting the ones that no longer count, but really! Now you want to give foreigners visas so they can buy the homes you just kicked our unemployed asses out of. Better yet, why don’t you up the ante on the next generation and offer them visas if they’ll vote for your party in the future. Seems like the next best thing to telling the truth and actually having to support your constituency base. Oh wait, that’s not us I forgot. That’s for the 1% and we’re just here to get fucked as often as it fits your political bullshit.

And don’t worry about the fact that there are way more of us than you, cause we’re way to dumb to see through all your powerful talking points and misdirections. In fact we’re so dam close to hill billies that you might as well kill us fir be’n so codependent. Probably the only way you’ll really get any real rest at night.

Now that I seem to have your attention, let me tell you what’s going to happen next so that you won’t be totally caught off-guard when the lights go out! A day will come, and it’s coming soon, that you will open the news paper and find out that confidence in the fiat currencies, you’ve bled the world around you by, won’t be worth toilet paper. I know what you’re thinking, that you already knew and hedged your billions in metals, which frankly will help, but not you. In fact the few coins that people do have will be passed around a few times and the raw truth will suddenly dawn on the others, like a vision, that we don’t need to trade anything. That it was all just an idea that was held in place by the fear of the unknown.

Shame too, that you spent everything you had trying to save a failing idea, while we built an entirely new way of experiencing right In front of you, but you couldn’t figure it out. You tried. We watched you and to you it all seemed like a game without rules or an outcome, nothing you could stop or control, so you considered it an unimportant shadow.

You know what the true irony of it all is? That you will be forced to need. Not by any of us, but by your own actions. You’ll really wish there was an Armageddon that would spare you from living in a world without gold plated fixtures and Latvian maids, but mostly you’ll have to live with yourself among us. In plain clothing we made without your investment. And they won’t cost you a dime and we’ll love you for asking and yes of course will always be our true flag of unity!

Here’s a clue, and it won’t be enough for you to realize it in time, but more of something to reflect on when you finally build up the courage to come out side. It’s the same thing that set Harry Potter apart from himself. The thing that pooh could never speak. It’s the sound of a bee on a warm afternoon and a field of flowers without toil. And you can not monetize it, no matter how hard you try. So when it all comes crashing down around you just remember. I and a few friends did this and never fired a shot! Not really. Actually, you did this to yourself… And what a fucking ride that was!

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Socialmedia Influence – Currency of the Future is now available on Amazon.com, Amazon.co.uk, and Amazon.de

25% of royalties go to support the Occupywallstreet Movement.

Michael Light started Endoflex in 2006 to report the beginnings of the Subprime Mortgage Industry Fallout and has continued with the recent Occupy – United for Global Change.

Occupy Wall Street has changed the way we see the media, and it’s relationship to the powerful influencers of the World, and may even be the spark that ignites the shift from monetary policy influence to Socialmedia Influence. Michael Light reveals this shift in his book with a succinctly humorous history of influence and the shifts that have preceded what may be the next Global paradigm shift.

Join the conversation on Facebook

Fair Trade vs. Capitalism – Truth vs. Theory

One of the things I don’t hear anyone talking about or writing about, other than Michael Lewis, is the real reason why the economy is in its current state. The major component of this defect is the notion that anything can be restored while this missing link is ignored.

Right now the heads of economics are wrangling with the heads of policy and everyone just wants to come out of it on the other side. The biggest problem with that cliche right now are the false premises being exercised which are only helping exasperate the issues plaguing the current system. The first and most spouted misnomer is the idea that the solution is relying on better times ahead, when the banks start loaning and housing prices stop falling, which will lead to higher employment and an increase in consumer spending. Presto!

It is explicative to Ben Bernanke’s actions of printing money. The idea that the economic system is like a machine that needs fuel is only one of the dynamics of its engineering. Yes, fuel makes the car go, but there are literally millions of moving part and just paying attention to the obvious one obviously isn’t solving the issue.

One thing I think worth mentioning is Keynesian economic theory which states that a certain amount of influence (interference) can benefit the system. It has become vogue for economists to bet this theory at every corner without considering that that its a supply side theory. For instance, when the banks went into collapse, it would have been pertinent to let them. This is a supply side deficit and points out it’s error; the banks having been deregulated stopped doing correct risk assessment and took it in the ass for it.

Some people might think that means regulation is good, but it doesn’t matter. There wasn’t any in this case and it collapsed. It’s not the fault of regulation it was the banks lending and risk modality. Giving them all the peoples money to save them wasn’t fair for the people. If we’re going to bail them out then yes regulation is in order, but the banks lobbied for the freedom to assess their own risks and lost sight of facts along the way. So, fuck’em! All the help is doing now is dragging everyone else down with them! It’s not like their going to start loaning money now that they can see the realities of the issues that aren’t really being solved.

The argument used to get everyone to buy this solution in the first place was the threat of losing the banking industry which would put us in a total collapse and it would take years to recover form it. This solution doesn’t really benefit the rest of the system. It’s a real catch 22.

Now if we consider the real issues behind the problem then the proper diagnosis can be made. The first issue is the derivatives industry surrounding mortgages. Breaking up mortgages into bite size pieces changed there value to no longer reflect the truth they represented. As a condition of this mistake, it caused the housing markets to be oversold, thus inflating housing prices and by osmosis flipped all the asset wealth in the US into the debit column. In other words is created liquidity appear that wasn’t real.

The other thing it did was peg the value of the dollar to the value of property indirectly. This way, as long as housing prices continued to move up it goes unnoticed. Since this has been the case for the previous 71 years no one could have guessed it would be all that likely to occur again.

In 2006 when it started, the FED could have stepped in and forced an immediate consolidation of all the mortgage securities. It could have been a federal buy back and would have cost everyone holding these security whatever percentage would have been fair to write-down and would have completely restored confidence. Confidence was the leading cause of the banks ending lending in 08 when the shit hit the fan. The LIBOR rose 200 basis points in one day and nothing has been back to business since.

Instead the decision was made to pour trillions of dollars into the problem every year since and guess what… The problem isn’t solved. I remember hearing everyone giving Bernanke all this praise for his credentials as a Harvard Genius who had studied the Great Crash and knew what he was doing. Obama left the guy in his position because he believed that his familiarity with what was happening was essential to the position and that just tells me that neither of these guys are smart enough to understand economics as dynamical as the current US economy, let alone globally.

So, now there are millions of people in the streets to protest the mess we now in and to them it us simple greed that caused all the problems. It’s very likely that the president really does little in regard to true economic policy, I mean he doesn’t even understand it right! If he did he would have seen Ben as an issue needing to be resolved rather than rewarded. In essence is greed, but really it’s just plain old ignorance when it comes down to it. Occupywallstreet isn’t going to get the system to humility. If anything the media is now just using them to press their own agenda which happens to be aligned with the Fed’s ridicules assumptions about how to get thing back to where they were and dude… I don’t mean to be disrespectful by saying this, but you really need to rethink the entire system at this point. Fighting to keep it is insane!

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Socialmedia Influence – Currency of the Future is now available on Amazon.com, Amazon.co.uk, and Amazon.de

25% of royalties go to support the Occupywallstreet Movement.

Michael Light started Endoflex in 2006 to report the beginnings of the Subprime Mortgage Industry Fallout and has continued with the recent Occupy – United for Global Change.

Occupy Wall Street has changed the way we see the media, and it’s relationship to the powerful influencers of the World, and may even be the spark that ignites the shift from monetary policy influence to Socialmedia Influence. Michael Light reveals this shift in his book with a succinctly humorous history of influence and the shifts that have preceded what may be the next Global paradigm shift.

Join the conversation on Facebook

Occupy Earth United for Global Change – Oct. 15th. 2011

On October 15th the entire World will stand in the place they live and Unite the World in a movement that began as Occupy Wall Street, sponsored by the Canadian magazine Adbusters. It is being called United for Global Change. #Occupywallstreet as it is referred to on Twitter, began as a grass roots move to call attention to the extreme imbalances that have been growing in the World’s Economic system. It has all but been completely ignored by the mainstream media and when the news is covered it has been laced with shades of PR “talking points” reflecting several different interests.

It would appear from the slants being conveyed in the media that Democrats believe they can Co’op the movement and turn it into possible legislature to help push plans through Congress that will give them more clout to tax the rich to pay for job bills. While the right wing has called the event in Wall Street a “Class War” and “Dangerous”, and Glenn Beck has gone so far as to suggest that these protestors have intentions to drag people out into the streets and “kill” them. It just amazes me that so much slander around a movement that has the sole intention to call for a more “Participatory Democracy”, according to organizers in Boston.

Several failings in the attempts to discredit the movement have begun to shift people over to new sources of information for the news surrounding the events taking place, now in every major city in the US and on Oct. 15th in every major city around the World. No news has come out of China as to whether they will attempt to join Western forces in their move toward Solidarity against what is being referred to as the “Corporate Banking Political Media Group”. I’ve always just called it Capitalism, which seems to be up against the same possible fate that fell upon Communism in the 90′s. Central leadership always seems to fall victim to monetary control and looses sight of it’s main constituency, which is people!

Some news people have spoken out against the mainstream media’s blatant disregard and close to slander of the events, especially Keith Olbermann who has become a huge proponent of Twitter as the one place that anyone can find almost all the news being reported. The entire event and every local event is being organized on Facebook with page named after each event, OccupyLondon for instance is the “occupy” event taking place to protest the London Stock Exchange. Events can be search using either Facebook or Twitter and specific news being posted is listed according to each event. For the London Exchange it would post with the hashmarked version of the Facebook page, #occupyLondon. It is also possible to follow each groups Twitter account @occupyLSX, and so forth.

It amazes me still to see how long the media is holding out on acknowledging this isn’t a bunch of pot smoking hippies, but as has happened in NY and now in Boston, it is being helped by the Labor Unions and people of every age group and occupation! The divided has become so critical in this writers mind that it will be difficult if not impossible for them to ever regain the public trust enough to ever be considered a valid or credible news source.  So, rather than expecting to hear about the events in your area, cause there will probably be little to none, get a Twitter account or look up your specific area on Facebook to get all the news relevant to your location! And don’t believe the mainstream media when they quote the now famous “talking point” that this is an unorganized group of kids without a clear message. The message is quite clear! Occupy – United for Global Change has organized an entire World Event on Oct. 15th 2011 to show solidarity for Economic Justice, and they have done it using Social Media!

Facebook/OccupyEarthUnited

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Socialmedia Influence – Currency of the Future is now available on Amazon.com, Amazon.co.uk, and Amazon.de

25% of royalties go to support the Occupywallstreet Movement.

Michael Light started Endoflex in 2006 to report the beginnings of the Subprime Mortgage Industry Fallout and has continued with the recent Occupy – United for Global Change.

Occupy Wall Street has changed the way we see the media, and it’s relationship to the powerful influencers of the World, and may even be the spark that ignites the shift from monetary policy influence to Socialmedia Influence. Michael Light reveals this shift in his book with a succinctly humorous history of influence and the shifts that have preceded what may be the next Global paradigm shift.

Join the conversation on Facebook

#occupywallstreet – The Revolution Will Not Be Televised!

A group of radical young men and women who call themselves #occupywallstreet have done just that. They have not only managed to occupy wall street, but they have also managed to capture the hearts and minds of an entire nation, if not the entire World!

Some people, in this country, are entirely unaware of this, ironically, due to the complete lack of news coverage by the mainstream media. A few people including The Last Word, Keith Olbermann, and the Huffington Post have, on the other hand, joined the side of the people and are reporting what is now happening in over 140 cities across the country. It has begun to spread beyond our borders, just as the subprime mortgage scandal has spread like a contagion around the globe.

The real news happening here is not the tens and hundreds of thousands of protestors being counted in the hundreds by the NYTimes, but the some-odd 3000 Tweets an hour being produced by the crowd of American Citizens who have finally reach a level of discontentedness equal to the size of that crowd, which is growing by the thousands daily.

Facebook statuses have been bombarded with pictures of police brutality and the photos of teenage female photographers being “hauled away” for participating in a Constitutionally protected right of the people; the freedom to assemble, and the right to petition the government for the redress of grievances!

These blatant disregards for the Constitution and the following debuts of YouTube video after YouTube video have only succeeded In stirring up even more people to leave the comfort of their unemployed dulldromes, to join the struggle of their community; to be represented by the current political non-sense that sold us “Change” and delivered 4 more years of Guantanamo Bay and an Iraq war nobody wants!

So, keep it up America! You deserve the right to representation, and you are correct to hold this rally at the front door of the reason things got this gray for our country! They will listen to most of us if we speak in one voice! And keep the Tweets flowing, with your links to blogs and articles that support our dialog! This will not end until our change is complete and socialmedia influence is King!

Cheers!
If you like this post visit our Facebook Page @facebook.com/KlickDSE for more news and information about #occupywallstreet or follow us on Twitter @solight111

The Long Road to Transparancy

In 2006, it was hard for me to imagine the response the Fed would offer about the rise in Foreclosures, which pointed to a horrible lending practice that had been thriving through the last few years previous to it. During that time Sub Prime lending was coming of age. It produced a total of no less than $3 Trillion dollars worth of risky loans. The obvious solution, to me, at the time was to restore the conditions of the original titles, to the properties these trillions of certificates represented. The issue during the crisis was, “how to price something no one wants to buy”, which lent to the nickname “Toxic”.

In Goldman Sachs 2010 SEC filing, these previously “Toxic” bonds with a thousand different acronyms, are now being referred to as “Fair Value Financial Instruments”. The Federal Reserve has accepted over $2 Trillion worth of these, as collateral for loans to the banks who would have collapsed in 08 had they been kept on their books. Banks during the crisis were leery to lend to each other on the general concern that these notes or securities were worthless, and that these institutions holding them needed to dramatically ‘write down’ their value. Instead the Fed offered to take them for collateral, under the auspices that they could be traded later when the crisis had passed thereby earning the US a profit for helping.

The challenge for me and lots of other investors is the casual nature that seems to be the “New Federal Reserve”. Gone is the Greenspan age of diligent research and proactive policies. It was a shock to me when I read Ben Bernanke’s comments to Congress in 2007, that the Subprime fallout would stay in the subprime industry and “shouldn’t be” a threat to the general economy. Instead it led to some of the worst days in our economic history, and throwing out uneducated (or un-researched) guesses about something of a $3 Trillion dynasty seems surprising to me.

Today the Wall Street Journal reported that the Fed had failed to disclose some $80 Billion dollars worth of loans it had made to several of the groups that were leading the battle cry for this flimsy market of massive risk. Throughout 2008, from March through December, the Fed loaned $80 billion to institutes like Goldman Sachs and Deutsche Bank AG, in an attempt to provide liquidity to support more mortgage lending and keep the mortgage security industry moving, while slightly after the main fallout in 08, the Fed was telling Congress that they needed more oversight powers in order to avoid a systemic failure if the future ever presented the opportunity. What I want to know is why didn’t the SEC look into what was happening with the ratings agencies when Steve Eisman went to them with a detailed outline of the market and it’s risks!

I recently had a chance to read, “The Big Short”, by Michael Lewis, which outlines the Subprime Market through it’s various faces and gives the perspectives of men like Steve Eismen who were shorting the market by purchasing Credit Default Swaps, while financial institutes like Goldman Sachs were using the same default insurance to give customers confidence in the products. Everyone claims this was to make cheap credit available for everyone, but what will the over-all cost be when the dust finally settles; when the only thing that changed is the words used to describe the original problem and the original problem still looms in the form of massive debt.

Now the task of getting the US Dollar back on track (solving the deficit) has fallen to the politicians to work out and I have a pretty strong feeling that party pride will weigh in against any wise choices. The fact is that even the best economists, mathematicians and social psychologists, coupled with all the facts and the green light to do whatsoever is necessary to solve the puzzle and put the US Economy back on track would probably not like the options. The one thing I’m sure of is that everything is hinged on the continuing US Dollar, which is now in the hands of a 2 party political drama… Curious.

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Socialmedia Influence – Currency of the Future is now available on Amazon.com, Amazon.co.uk, and Amazon.de

25% of royalties go to support the Occupywallstreet Movement.

Michael Light started Endoflex in 2006 to report the beginnings of the Subprime Mortgage Industry Fallout and has continued with the recent Occupy – United for Global Change.

Occupy Wall Street has changed the way we see the media, and it’s relationship to the powerful influencers of the World, and may even be the spark that ignites the shift from monetary policy influence to Socialmedia Influence. Michael Light reveals this shift in his book with a succinctly humorous history of influence and the shifts that have preceded what may be the next Global paradigm shift.

Join the conversation on Facebook

Timing is Everything

Once again we have come to a crossroads in American history where the future will be shaped by politics rather than rational decision making and as usual the Achilles heal will be the past rationale that the US economy is so resilient that whatever decision is made will either be the right one or we’ll have the time to adjust it and everything will work itself out.

I am of course speaking of the US Budget Deficit, which is growing at an astronomical rate for several reasons. On May 15th the US deficit will reach an unrealistic 14.8 Trillion Dollars, this does not include SSI nor Medicare, whose trusts were breached during the Reagan administration in the 80′s. Nor will it include the reality of the Federal Reserves unbelievable holdings of $2 Trillion in still toxic subprime mortgage securities. It will mainly be centered around the bankers and corporations lobbying for their share of a quickly depleting dollar.

The idea that the US economy could never suffer a irreparable hit is the long standing idea that we are America and has no other basis in fact, but lets just weigh that against some truth. The US trade deficit is way to high, and this is a massive liquidity leak, so to speak. The Fed Chief is fudging number that don’t agree with the worlds foremost investors, which has a huge effect on investor confidence, and he seems to be measuring inflation against numbers on paper and not the commodities they purchase. Keynesian philosophy only really works when you have a supply side surplus and excluding food and energy from core inflation is part of that philosophy giving us a false sense of inflation, which can be rated as high as 10% when you take this and other factors into consideration.

In 1971 when the US went off the gold standard gold was $35 an ounce and if we were to rate the US dollars buying power we can see, looking at golds current $1500 an ounce price, that the dollars purchasing power has faded horribly.

We are still seeing adjustments in housing, which for a time, became a meter for the dollars purchasing power, and prices could very well fall back to pre-1980′s levels exposing the system that built the inflated sense of wealth of converting assets into debt. And now the fact of inertia gets to come front and center stage for the final act to answer the question, “can a debt based society beat the odds the past has proven time and time again?”.

The strongest facts, which will likely be overlooked in this scenario of political posturing, will likely be the need to restore the fading confidence in the dollar and a truly responsible fiscal plan to get us back to a long term solvent state. In the Book, “This Time is Different”, the authors point out several indications that have been consistent in the collapse of past fiat currency based economies, and the most prevalent to me seems to be the confidence factor that makes their treasuries a solid investment, and when investors are only interested in 4 and 6 month treasuries, you can practically count the days on their confidence.

The Second Law of Hyper-Inflation

It’s been a couple of years now since the original ripple of the Subprime Market Shift. I am choosing to call it a shift because ever since it occurred we have been steadily moving toward the point of no return. Simply put, the Fed response to the economy over the last 2 years has had a profound effect on the progress and seriousness of what’s happening in the World’s Economy.

The most recent event in the saga has been the slow response to raise interest rates amid a rush of market activity. On paper it looks great, “Highly residual market roars back with a flood of investor cash.” sounds good right? Well without getting into a math quiz prep, lets just look at the basics. In the last 2 years the stock market has gained back 60-65% of it’s pre-subprime shift, while unemployment has very quickly gotten worse, but slowing. Consumer spending is erratic, which means impulsive and not a trend, but rather a whim.

The main problem isn’t any one of these, and there are more I haven’t mentioned. The real problem is that prices over the last 4 years have skyrocketed in many areas of the economy, while some of these are seeing deflation. Much of this inflation has to do directly with the prices of energy. It has effected everything from shipping to food cost, which are the two biggest burdens on an economy. The US Economy was built on cheap food and cheap fuel. It has a hard time thinking outside of that box, and has been excluded as a model type for inflationary scaling. Normally it fluctuates with supplies, but supplies are limited now and the pressure of demand is not letting up, but excelling.

During the peak of the credit crunch part of the shift many people failed to notice that supplies of rice had dried up. During that time China stopped exporting rice and actually imported it for the first time in history. India, the second largest supplier of rice to the world’s markets as well stopped exporting rice. The Philippines could not get 75,000,000 tons from any one country, while a wheat rust began spreading across Africa and the Middle East. All this will put real pressure on the populational scope of possibilities. How many is too many? In any case both energy and food are real factors and can no longer be looked at as separate from core inflation. It must now be balanced.

These factors are mixing to provide an unstable rate of inflation. The argument against this might be that the economy had suffered infrastructural damage and without TARP and keeping interest low The economy could stall and loose any momentum it has gained by our interventions. Frankly I think loosing all of the exisiting banks that jumped on the derivatives bandwagon would not have been such a huge loss. Loosing GM, who is still pushing big trucks and probably helping with the anti-Toyota campaign can go into the dung heap if you ask me. It would be nice to live in a place where oil company and auto maker bedfellow’s didn’t orchestrate our environment economically.

But what to do about Ben. Obama, after having hindsight to call on, stuck with Ben. Congress approved Ben, and if you ask me; I see Ben as part of the problem at it’s crux. You can’t blame Congress for wanting more American’s to own their own homes, regardless of what Fox News might say, and you can’t blame Alen Greenspan for ignoring what shouldn’t have been such a big problem had the SEC asked for clear disclosure from the banks and investment houses on their inventory of subprime investments. In your mind you think of these derivatives as somewhat safe considering the houses were real, that the securities were representing real value. The problem was they were popular raising the value way above the physical value of the homes. So when it fell it fell hard, and that could have been resolved right away when Ben became aware of the collision about to take place… Oh wait!

That’s right! Ben didn’t do anything! He said the subprime fallout would stay in the subprime market. That was way off by the way. Then we fail to recognize the main stress which would prevent this from being an easy recovery… the price of oil and natural gas, which had been going up steadily since the invasion of Iraq. It was causing UPS and Airlines companies to add service or fuel charges to their services. It was effecting food costs, creating shortages, raising values accross the board. Heating cost one winter effect consumer spending directly, but the demand for these things are primary, while supply on the other hand wasn’t to be cured by invading Iraq. It won’t be solved by drilling in Alaska. The only thing that will solve it is greater efficiency. New technology and conservation.

Yes Ben, we have suffered a major systemic threat, but it isn’t the conditions that fail. It is the system which has so many flaws. All we managed to do was put the dying patient on life support for a little while. The conditions themselves were not met with clearly and desisively. They were resolved temporarily in order for the direction of our economic base to keep perpetuating. The problem is that it won’t last and Ben’s gonna provide us with the keys. Failing to raise interest rate in order to keep moving forward is exactly the wrong thing to do. Your might be thinking that he raised them a quarter point, but that was after the momentum in the market was accelerated to the degree is pressing with now. If he would have raised it for the second time it might have slowed down the pace, but he didn’t.

So here is my prediction from this flotsam of ramblings. Ben’s response have been steadily late. He didn’t take inventory when it started and could have done more earlier without pumping 4 trillion dollars into the banks, who should have failed due to poor risk assessment and management. He could have primed Congress to reign in the banks before the splash and had them increase their cash positions earlier. They could have forced the SEC to ask them for full disclosure and written off the debts, assembling them back into real estates, and not paper. None of these things happened. It is likely we will stay the course and what was the direction wasn’t really working all that well. It is likely to repeat itself.

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The Roar of inflation…

I remember when I was a kid someone tried to explain inflation to me and used some South American Country as an example of what can happen when it goes unchecked. Well it’s coming up on a year now that 4 trillion dollars have been pumped into the economy as part of the plan to catch the fall of the Subprime Mortgage fallout.

A few weeks ago Ben Bernanke made the decision not to raise the Prime lending rates, even though the Market had obviously started to catch the wind of the rising tide of money moving around the investment banking industry. Some of the Banks have paid of the loans they received, but there are all these tricks that can turn a million dollars into much much more by lending at a margin (more stuff I could probably understand if I took the time to concern myself about it).

The fact is that all the decisions made by the Fed take anywhere from one year to 18 months to take effect. I found this out when I read some of Greenspan’s theories on the Markets. Greenspan had taken an approach that was new to economics and made all the Fed’s moves based on their direction, while acting ahead of the curve in order to keep it stable. It turned out that this made the bubbles much bigger during his terms, which made themselves known when Bernanke took the straight and narrower road most Fed chiefs had used for years before Greenspan.

The bottom line is that all that money is now starting to show itself. The GDP grew by 5.7% with above 10% unemployment, the Stock Markets jumped back up above 10,000 a few months before that and Ben is just sitting there. He has been setting up some little known exercises of withdrawing money from the system if things start to pick up, but the rule is that once runaway inflation starts it can not be stopped. The big question for me is how long will he just sit there. Slow growth is obvioously something we could use and what we definitely don’t need is crazy inflation raging on us next…

I hope we get it right!

Ben’s not the problem, but is he the “Man to Solve It”?

Now wait one second, Mr. Ron Paul. I don’t think it’s fair to suggest that Ben Bernanke caused the recession. That would be like saying that he personally engineered the subprime mortgage security, these… as Greenspan called them, creative Financial Products. As well it would be like suggesting that he, and not Greenspan, first became aware of these derivatives and how if left unchecked, like most objects the bubbles surround, could have a greater fallout on the bigger economy. Unfair if you ask me, but a saint in this affair he is neither.

Ben, Your crime is negligence my friend. You had a chance to study the possible effect of the subprime fallout in its making. You knew by the figures that it had reached the title of bubble based on the intel you collect on the economy daily. Crunching the numbers would have told you that the value of these products were highly inflated. He also knew that the subprime lendees were starting to default at a rate exceeding what the current (at that time) secondary housing market could absorb (2 million that year alone). And you ignored the fallout.

The housing industry supports so many other industries and about 30% of the blue collar work force, how could you be so naive that you would forget about small appliances and turf farms, or the trillions of dollars worth of collapsible wealth there was hidden in two highly regulated markets; the banks and real estate.

The one thing no one wants to admit is the part that 140 a barrel oil played into that scenario. How it was the real pull that was slowing the economy. It was just bad timing that the subprime fallout occurred simultaneously. Timing was the real culprit of this decades recession, if you ask me.

But… Ben, you could have made a real difference when it started in Dec. 2006. This would have been a great time to look at the senarios the fallout could have, mixed with the fuel pressure. Greenspan warned us that natural gas would peak in the US and that without building new infrastructure to trasfer the reigns to importers, that the preasure it would put on the economy could be catastrophic beyond repair, which coupled with the war in Iraq and the inflation which follows war, it would have taken a real genius to worm us out of that without a flu shot!

Act 2, Scene 2011 – INFLATION

So, here’s the dealio folks. We know that although Greenspan was a economic muse it didn’t save him from ignoring the truth sometimes. Struggle as we do, it’s life! Ben on the other hand has not been at all the successor we were expecting. I think we were into the whole moderating side of Keyenian economics. Sure it won’t last forever, but it does tend to keep inflation and unemployment in check, for the most part. And, here’s where it gets a little tricky, and I see Ben looking ahead a little bit, but… how do you tame a super-hyper inflation.

We just poured approximatly 4 Trillion dollars into the US economy, Europe is already beginning to see an uptick in there inflation from the money they poured into there central banks. The problem is that when these banks start loaning out this money it is going to multiply, as they loan it. This mixed with inflation in every other country that followed this lead will have a global effect of manic deflation.

Seriously we should have let the fallout happen and build a health economic plan that was based on total value, including energy and global costs of repair. It’s not really a choice if we understand what we are facing.

Fed to markets: Let the bubble blow David Callaway – MarketWatch

Fed to markets: Let the bubble blow David Callaway – MarketWatch

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