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  • From: bob ford <bobford79 AT yahoo.com>
  • To: homestead AT lists.ibiblio.org
  • Subject: [Homestead] Inflation --commentary
  • Date: Mon, 29 Sep 2008 06:11:21 -0700 (PDT)

I ran across this commentary today on another site, I don't know anything
about the author except that he has been visiting U.S. and posted this
message this a.m. I'm an unsure of his conclussions, I just thought it was
interesting. I went ahead and posted the entire commentary.....


The Last Day
Sam Mathid
Sep 29, 2008

Last week, Hank Paulson and Ben Bernanke announced that taxpayers money would
be expropriated to bail out the bad loans of bankers. Despite the appalling
scale of greed, fraud and incompetence, that is the deal that is being rammed
through Congress as I write. I assume that outcome based on Congress' long
record of having the collective spine of a jellyfish.

The banks, by their actions, have ensured that many people who could not
afford houses were sucked into the market. When the last person was in,
housing prices started their inevitable tumble. Prices are falling hard, and
will continue to fall hard into the foreseeable future. Those who are already
underwater will soon be underwater a lot further. Those who are marginal will
soon be joining their ranks.

A friend approached me today. The dollar value on his house was $600,000 12
months ago. He had a $320,000 mortgage. Today his house is worth $300,000 and
falling.

He has a perfect credit rating, and has never missed a full payment on his
house. His family is one of the many that the current structure is penalizing
in order to support those who bought houses that they could never afford. He
asked me what he should do. My advice was to walk. There is no moral
responsibility for him to continue to pay people who have shafted him in such
a manner.

Why would anyone pay their mortgage when legislation is being drafted to make
non-payment acceptable? If responsible people who didn't over commit are
penalized for the actions of those people who did, then the rules of the game
are corrupt. If the rules of the game are corrupt then don't play the game.
If you do, then you end up as no better than a banker or a Wall Street used
CDO salesman.

Today in my in-box I found an email suggesting that instead of giving $700
billion to the cronies of Hank Paulson, that we should break it up and
distribute the money to every adult in America. The email claimed that would
be an amount in the region of $400,000 for every man and woman in America.
That won't happen of course and for one very good reason.

The current system has collapsed because of the inflation of the currency.
The beauty of inflation for the rich is that they are first at the spigot
when the money is released. They get it at full value and use it to send
asset prices up and off to the moon. It appears that the economy is booming.
It's not of course, but it looks that way to the true believers in the
bizarre world of Keynesian economics.

How much inflation has there been? From the signing of the Constitution right
up until landing a man on the moon the whole American experience, every
house, car, television, freeway, airplane, war... everything, cost one
trillion dollars. Then consider that the debt ceiling has been raised 2 1/2
trillion dollars just this last 12 months. Do you see the value in that? Of
course not; that is because you didn't get it. The rich bankers and their
Wall Street friends that you are now being told you have to bail out got the
lot.

By the time that the money filters down to the poor suckers in the street,
the prices of goods have finally started to rise in line with the rate of
inflation of the currency. The pittance that trickles down to Joe and Suzy is
never enough to cover the higher prices caused by the full amount of
inflation. Inflation ALWAYS causes higher prices, but only after a delay. The
delay is always long enough that Joe and Suzy fail to make the connection
between cause and effect. The already rich elites get the money, Joe and Suzy
get lumbered with the bill via higher prices.

If Congress distributed the inflated currency to the tune of $400,000 to
every man and woman, then ON THE SAME DAY that the money arrived, a coke
would be $20- and it would cost $300- to fill the car with gas. Joe and Suzy
would instantly make the connection between inflation and higher prices. In
one day that would signal the end of the greatest and most insidious scam
that governments the world over play on 'their' citizens.

The inflation in America has been greater than anywhere else over a more
sustained period. That is why the pain of higher prices will be greater here
than anywhere, with the possible exception of Zimbabwe. Joe and Suzy Lunchbox
must never be allowed to understand the inflation scam. That is why cheques
for $400,000 are not going to arrive in anyone's mailbox.

The rising grocery and gas prices that Joe and Suzy are now paying are simply
the repayments due on the vast amounts already given to those first in line
at the spigots years ago. The repayments will go on for a long time. Beyond
the life span of anyone alive today. How high will prices have to rise to
accommodate the infusion of $700 billion in new dollar bills (not counting
the fact that it will end up as $7 trillion after our banks work their
fractional banking magic)? Impossible to know for sure, but my guess is
really scary.

The bankers and Wall Street investors have lost Joe and Suzy's money, now
they want passage of legislation to ensure that Joe and Suzy have to pay them
back. There can be little doubt that Congress will pass it. There will be
electoral rage at the decision with unforeseeable consequences in November.

My wife went to the gas station in Clearwater, Florida yesterday. There was
no gas, so not being desperate she went home. Today she went out again and
found a gas station with a long queue. She queued. Whilst waiting she chatted
to another woman in the queue. This other woman informed my wife that there
was no gas between Ashville in N. Carolina and Charleston in S. Carolina. She
claimed that in Georgia people were fighting over gas it was so short. Maybe
that is not the whole story, maybe it is. Who knows what is true in America
anymore?

Things are falling apart very quickly in America. The downright lies, and
omissions and twisting of the truth, are being continued right up to the end.
There will be a great deal of bitterness if Joe and Suzy ever realize the
nature of the con trick that has been pulled on them. Never forget that Joe
is armed in this country, and oft times Suzy also.

Our children have been in school here, and tonight we went to the Homecoming
dinner. A drum band pounding out the rhythm whilst beautifully gowned ladies
with fantastic jewellery and sundry glitter walked around the room. Men in
beautiful and expensive suits accompanied them. We feasted and drank and made
conversation. On a giant screen, film of the High School football team
(quarter-back has the best stats in the whole US) was played. People were
light-hearted and merry and it was a great night in the American tradition.

I could not help but have the thought intrude upon me that it was like an
'end of America' party. Maybe it's the end of something that had become
rotten, and the re-birth of something far more decent. There are very hard
times coming. When TSHTF [the s*** hits the fan] remember that it is Congress
who is your enemy, not your neighbour.

None of the bankers and Wall Street crooks could have done what they did
without the support and backing of Congress legislation that not only allowed
such actions, but by the nature of government intervention in markets, made
it impossible to survive in those industries without becoming corrupted by
the legislation.

Whilst it does not excuse the lack of moral fibre of those who participated
in this greatest of ever frauds, it is good to remember that we all have
things in our youthful past that we are not proud of. Without a Congress who
completely ignored the Constitution there could never have been the
legislation that created this fraud. Without Congress, America would never
have reached this impoverished state. Without Congress, Americans would
already be living much better lives, with far fewer enemies in the world.

I shall be writing from overseas after tomorrow. I'll look from a distance at
the implosion of America. My family and I have loved living in America these
last nine months and are very sad to leave. I came to chronicle at first hand
the decline of this once great country. The people are wonderful... warm,
friendly, honest and hard working.

I have come to understand much about Americans in the last nine months, and
found nothing that I did not like (apart from the food and coffee), but I am
still a million miles away from understanding why you elect the no-hopers
that you do to your Congress. We all want to be able to come back again one
day. No matter how much my family and I will miss America, it will not be as
much as the world will miss America.

***

The brilliant Professor Antal E. Fekete, economist and mathematician, is
conducting a seminar in Canberra, Australia from the 11th to the 14th
November this year. It is the ONLY seminar anywhere in the world where all


Sep 27, 2008
Sam Mathid
email: sammathid AT yahoo.com

© Sam Mathid 2006-2008








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