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Sunday, December 28, 2008

The World's Biggest Ponzi Scheme

“The Day the Earth Stood Still” may be a film-remake from the past grabbing the imagination of viewers by telling a story of an alien space craft landing on Earth, starring a human looking outer space man and his loyal robotic companion, but the fact is the Earth has begun to stand still because of the world’s biggest Ponzi Scheme, which began 30 years ago, and now, has come to an overwhelmingly loud screeching halt.

The nation has fixed their eyes on the economic vampire, Bernie Madoff, who ripped off his richest-of-the-rich investors out of $50 billion, as well as others managing funds of funds and closely similar concoctions. The media has clamped on him the ball and chain label of Number 1 Ponzi Scheme Con Artist. I have to disagree. The Number 1 Ponzi Schemer, the world’s honorary economic predator, goes to President Bush and his 2 heister-shyster racketeer side-kick vampires: Hank “The Paulie” Paulson, and “Bada Bing” Bernanke. The grandmaster Ponzi Schemer award goes to Alan Greenspan, who began the entire plan under Ronald Reagan.

This 30 year in the making, American government-endorsed, and president-presided-over Ponzi Scheme is what has severely damaged our economy, as well as other economies around the world. China has played a big role in the downfall by becoming the world’s assembly line using low paid, unprotected workers. Millions of drone assembly line recuits paid for by multi-national corporate greedsters killing jobs in our country while enriching themselves through low paid, with no-to-minimal benefits exploitable workers. By doing so, these corporate predators have increased the GDP of China, which has funded our debt oriented lifestyles, while, at the same time, kept their currency artificially as low as the dollar so their “stuff” could be readily available and real cheap to the maxed-out, over-spent American consumer.

Greenspan claiming he had no idea that our financial institutions were not capable of policing themselves is like saying that a vampire has no idea that their victims would end up completely drained of their life-sustaining blood after having drunk their dinner. In Japan, such a widespread and devastating failure would find the prominent authority figure responsible for the grand theft swindle taking hold of the honored Samurai sword for their final admission of guilt. Mr. Greenspan, we are still waiting for this very final apology!!

Bush has allowed Bernanke and Paulson to further the government’s Ponzi Scheme role by dumping more burdensome, unsustainable debt onto the shoulders of taxpayers, their children, and children’s children. Bush never took on the blame for the economic meltdown. He has always been compelled to deflect the finger-pointing away from himself and toward Congress, as well as Wall-Street, yet it was HE who put the Ponziites into the SEC, the Congress, and embedding them throughout the government, while encouraging lenders to loan to anyone who was breathing when they were walked in to sign for a home mortgage loan.

“Corporate America has a responsibility to make America a compassionate place”, said Bush. His code word for Ponzi was compassionate. He also said, “Wall-Street got drunk”, and corporate greed, along with market excesses, and the flow of foreign cash were to blame, yet he has yet to identify himself as the bartender for those drunken Wall-Streeters. Bush himself a proponent of greed and excess, and the recipient of his own personal foreign cash bailouts resulting from his failed oil businesses, has embraced the failed Ponzi framework disguised as free market economics. Such trickle-down, laissez-faire, free-market policies were actually the propellant used for this blazing bonfire of the economic “vanitees”.

President Bush and many congressional cons and hacks were recipients of generous campaign contributions from the financial banking industry indebting themselves to the richest of the financially rich allowing their Ponzi Scheme to go unregulated and unsupervised, and without question or transparency, while escorting Bernie Madoff into the arena of fraud with top hat in hand, as one bows gracefully before the Man. Bush’s con-artist advisor was his senior Ponzi promoter—Karl Rove.

Bush began his own presidential phase of the 30-year Ponzi Scheme with his effort to use his position as president to push his government into enticing and encouraging middle class Americans to use their credit worthiness to borrow and buy bigger, heavier, and even, thirstier vehicles, fancier washer and dryer machines, stainless steel stoves, vacations and much, much more pleasing the Ponzi bankers.

The Ponzi bankers wanted to squeeze more and more from the shrinking budgets of middle class Americans by convincing them to take equity out of their homes and increase their mortgage debt, while raising their debt burden, but softening their blow with lower rate re-financing packages. The economic Ponzi Parasites delighted in more available credit-driven debt formed into more non-transparent derivative obligations, which were insured against failure through credit default swaps.

Next came the “Go-Shopping” bugle call following the 9-11 tragedy. Polish up your credit cards and do your civic duty. Add to your debt, again, for the sake of the nationalized Ponzi Scheme!!!

All of this increased middle class debt giving the Ponzi Predators more debt to sell, while grabbing more fees, commissions and bonuses for themselves. This process turned into more non-productive wealth increasing the GDP, and fewer non-exportable products sold in order to help lower the trade deficit, which actually added to it.

They used the incomes of middle class consumers to fuel their Ponzi Scheme. All forms of consumer-driven debt was packaged and sold from bank to bank from hedge fund to wealth fund to broker-dealer, everywhere in the world, excessively leveraging their manufactured debt-driven derivative toxic hot potatoes turning one toxic hot potato into 100 of them; and then, taking those 100 toxic potatoes and making thousands more from them to the tune of 1000 trillion hot potatoes spreading worldwide in scope. Today, many have vaporized and all that is left is around $62 trillion.

Much of this exploding debt asset bubble inflated home and commercial real estate values increasing the opportunities to further speculate, which pushed prices artificially upward. What began as mortgage debt selling morphed into a serial re-financing Ponzi Scheme eventually collapsing for most of the investors down the Ponzi Line, except for those close to the top who profited immensely as they tried to stash their bootie into more secure locations.

Just in the last couple weeks, The Ponzi Aristocracy are considering adding more to the smoke and mirror illusion by bailing out hedge fund vampire predators, since they have gone to Bernanke, Paulson, and Bush crying for help. They want the taxpayers to permit the bundling of auto, student and credit card loans to create securitized debt obligations in hopes there would be investors awakening from a deep, deep decade’s long sleep willing to buy these non-transparent loans, many of which might actually go into default, as a way to add more debt to America’s balance sheet. This Fed Window is called TALF, which means Term Asset-backed Securities Loan Facility.

These hedge funds want to borrow $200 billion from the Fed’s TALF window at virtually a zero interest rate to sell pools of credit card receivables, auto loans, and student loans. Their drooling desire is to find suckers who might be brainwashed into buying them up. I wonder if there are any Rip Van Winkle-types, now waking up, who are looking for investments?

As America falls further into its economic abyss, the Ponzi Aristocracy want to further their riches, while the United States enters, what maybe viewed as, bankruptcy, in 2008-09. The projected cost of the bailout is $8 trillion. Fannie and Freddie Mac are guaranteed $5-6 trillion. In 2007, the public debt, what the U.S. owes foreigners for funding our economy—the two wars, etc.- amounts to $10.6 trillion. Yet, our GDP, all that the U.S. brings in to the Treasury and the nation’s net worth comes to $13.8 trillion.

Our debt is, at least, $23 trillion, but our GDP is $13 trillion. America’s private debt is considered a bit more than 100% of the GDP. Our debts exceed our revenues. So, what we are left with is our current government willing to create more Ponzi Scheme debt, but not invest a penny into the real economy—the economy that produces things, hard goods, that are created, crafted, and sold worldwide. This is what is called the industrial and manufacturing economy, and not the financial-debt-paper asset-class economy that has miserably failed us.

This Ponzi Scheme was known, supported, facilitated, promoted, and advanced by those given permission inside the government and from those contributing to it. This was all a massive predatory vampire-like scheme to suck the personal assets out of working America in order to enrich the richest of people; and now, once it has collapsed around them, they want to be bailed out!!! This has been nothing more than the biggest economic heist ever planned or schemed.

Two real burning questions to ask about the world’s biggest Ponzi Scheme are: where is the outrage, and, where are the indictments?

Happy New Year, jerry

5 comments:

danski said...

im outraged!
im an outraged genX'r
my whole working life all ive known is debt.
wages arent bouncing back anytime soon, this one will hurt more than the previous ones.

Anonymous said...

Actually the biggest ponzi scheme is Social Security!!!

And I didn't see one mention of the Democratic Congress writing out the check for the bailout's!!! You guys are so slanted and one sided, there is blame all the way around. Let the free market really be free and these bailouts wouldn't have occured. Also, I bet in the 90's when Clinton was in office you were probably PRAISING Greenspan:)

jerry, of eye on washington said...

Anonymous---Greenspan was put into the position of Federal Reserve chairman by Republican President Ronald Reagan. Reagan fully embraced Greenspan's policies of laissez-faire, free-market, trickle-down, supply-side economics, which was the very beginning of today's economic collapse. Clinton had his hands tied, upon entering the office of president by a Reaganite Republican Congress. Clinton continued to support Greenspan's inept philosophy of free market, free trade, bubble building economics. It was Republican Phil Gramm who wrote the law, and pressed it forward that fully deregulated the financial institutions. That law was called the Commodity Futures Modernization Act-1999, passed in 2000. This act allowed for off-balance sheet selling of toxic derivatives without legal supervision. These bond builders lived in the inky shadows of Shadow Banks, which were counterparty to most of the nation's biggest banks. It were Republicans who allowed for the elimination of the Glass-Steagal Act, which muddled the lines between interest-only savings banks and risk oriented investment financial institutions.

Yes, we sure are slanted; we are fully against the Reagan Revolution, Neo-Con politics, and the Bush administration, which was the death-knell for this economy. We are also against Obama continuing the same path as we have seen in the past. Change is what is required to change course. I am losing my faith in it happening.

Bush fully embraced all that was guilty in regards to this economic collapse. He allowed for outsourcing, runaway deficits, increasing unemployment, stagnation of real wages, a collapsing dollar, China becoming the consumer's minimum pricing workshop, destruction of our industrial sector, burdensome wars with no exit strategy, unregulated mortgage lending, the financial sector to create worthless securities strictly for greed and fakery and more.

Dude---there is no free market! When will you figure that out. There never was a free market. The market has always been a welfare program for the ultra-rich and corporate elite. The laws have been written to favor their greed program. The Republican elite would have NEVER allowed for the uber-rich to lose. When will you figure it out?

If everyone making a wage fully contributed into the Social Security program, there would not be a problem today, but contributions are capped at around $90,000. Any earnings over the cap are not contributed. In addition, Reagan, and all presidents thereafter, robbed Social Security for the purpose federal budget operations because those "borrowed" social security IOUs would not be counted as federal budget expenses.

Anonymous---your rage targeted toward Clinton needs to fade. Clinton left office 8 years ago. Bush took the reins and ran the wagon over the cliff. There is plenty of time to scrutinize the Obama administration. We are with ya on that one!!! Ron Paul possessed no magic economic dust. McCain just wasn't smart enough to even find where he put his Blackberries.

Anonymous said...

I don't have any expectation of the government ever doing anything to help anyone, rich or poor. I guess that is why I figure the least involvement they have in ANYTHING the better.

If I remember correctly it was Johnson that opened up SS to the general account. Also, I don't have RAGE for Clinton, I think he was a bad President but a 'good' politician. Your hatred for Reagan and the policies that gave us the longest economic growth in history and the greatest standard of living EVER known to mankind is what needs to fade. You look at a so called poor family in the U.S. and compare what they have to a family in any other country and I bet there will be stark differences in what they think is 'poor'.

Why should someone be forced to 'DONATE' money into a failed system when they will not get any return on that money?? For the record I do not come close to the $90k limit. You spew wealth envy like it is a good thing. I have made my lot in life, rich, poor or middle class but the only thing the government can do is 'TAKE' from me, what I earn in life, I EARNED, it wasn't and shouldn't be handed to me by a government or any other entity.

By the way I am NO fan of Greenspan or the Federal Reserve in particular, but it is what we have to live with. If you don't believe there is a free market then I assume your money is all stuffed in your mattress, why would you have it invested in anything? This downturn(which I believe is just part of a normal cycle) should not be effecting you.

So you guys are really, Socialist, Marxist, Communist or whatever 'ist' you want to make it as long as it is not Capitalist! There really doesn't seem to be much 'HOPE' in your lives. If you believe that someone else is in charge of how you live then you will be disappointed 100% of the time, it doesn't matter if they have an 'R', 'D' or 'I' beside their name.

I assume you guys support the FairTax since it takes the tax burdon off the 'poor' and places it on those greedy rich people that like to spend money. www.fairtax.org

Sorry for the rambling.

jerry, of eye on washington said...

Anonymous--you can believe anything you want. That is what this country is all about. You can assemble your ideas into whatever configuration you desire to get you through life. We are not here to try and change your perspectives.

You believe that you are in control of your own destiny; well then, so be it. You don't want to believe in the concept of a community supporting one another, building a "commons" of which we are all a part of. (That is why we call it a Commonwealth.)

If you want to forget that Reagan created the biggest deficit in history, at that time, and had to raise taxes, and pilfer the Social Security Trust Fund in order to pay for his deficit spending, then so be it.

If you want to believe that the expansion that you talk about was based on real growth, and sustainable productivity, instead of the early stages of what would become a 30 year Ponzi Scheme based mostly on growth in finance and less upon sustainable exportable goods, then so be it.

Wealth envy? That is what the Reagan expansion, and now, the Bush expansion gone bust, was based upon.

The free market has now been proven to be a hoax. The stock market has been manipulated by the Fed's Plunge Protection Team in order to control the stock prices without the transparency needed for honest buying and selling in the market place. That is YOUR free market. But, if you don't want to see it, that is your choice. I really don't care.

You say that, "the only thing the government does is TAKE from me." Well, I guess every time you drive on a road, or highway, you hate it. I guess you don't want environmental clean air, water standards, or regulated health care standards, or equal education, or work place rules, and safety standards, or unemployment relief, if you lose your job and cannot find one overnight, or police and fire departments paid for by the public, or insured bank deposits. The list goes on and on. This is what is called the "Commons" and our taxes support it.

If you think that what is going on is a downturn, then so be it. But, when the rest of the world is finding themselves in a recession, to say the least, and the USD is losing its reserve currency status, and China is becoming the dominant economic power, I would say that this is NOT a "normal cycle". But, if you want to believe it, then so be it.

You have seen your desired light, and have chosen to walk toward it. Be my guest. If you still have your money in the stock market, then good luck to ya!!!
It is only a "normal cyclical downturn." Ya. Right.

Capitalist? You said, "...as long as it's not Capitalist." HUH? What is capitalist about America when the uber-rich don't have to earn it, but can steal it from the average person, and now, the treasury? What capitalist? China is capitalist, and has stolen our jobs, our industries, our labor, our currency, our assets, our GDP. Now, that is Capitalism!! Right Anonymous? My guess is that China would be your kinda place? Because here in the United States the uber-rich don't have to earn their wealth, they can fabricate fake and worthless debt manufactured derivative bonds and sell them at 60:1 leveraging, and then, "insure them" using credit default swaps that are worthless, too, and create your wealth envy capitalism. WOW!

I have spoken my piece, but of course, I am some sort of Commie, socialistic, marxist non-free market anti-capitalist. Right!! I am doing my homework and realize that the very free-marketeering, supply-side, trickle-down capitalists have stolen this country right out from under us and it has nothing to do with social security. It has everything to do with the Republican driven and supported Ponzi Scheme.

But, it is "just part of a normal cycle".