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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