Money: 2008 recap
Zenaan Harkness
zen at freedbms.net
Mon Oct 14 16:43:18 PDT 2019
Exponential Freddie graph in original article.
Underestimating 'Them' & Overestimating 'Us'
https://www.zerohedge.com/political/underestimating-them-overestimating-us
https://www.theburningplatform.com/2019/10/13/underestimating-them-overestimating-us/
“Do not underestimate the ‘power of underestimation’. They can’t
stop you, if they don’t see you coming.”
- Izey Victoria Odiase
During the summer of 2008 I was writing articles a few times per
week predicting an economic catastrophe and a banking crisis. When
the biggest financial crisis since the Great Depression swept
across the world, resulting in double digit unemployment, a 50%
stock market crash in a matter of months, millions of home
foreclosures, and the virtual insolvency of the criminal Wall
Street banks, my predictions were vindicated. I was pretty smug and
sure the start of this Fourth Turning would follow the path of the
last Crisis, with a Greater Depression, economic disaster and war.
In the summer of 2008, the national debt stood at $9.4 trillion,
which amounted to 65% of GDP. Total credit market debt peaked at
$54 trillion. Consumer debt peaked at $2.7 trillion. Mortgage debt
crested at $14.8 trillion. The Federal Reserve balance sheet had
been static at or below $900 billion for years.
During 2007, a risk averse senior citizen couple (my parents) who
had accumulated $200,000 of retirement savings over their lifetime
of hard work, could generate $10,000 of interest income in a
Vanguard money market fund yielding 5%. This supplemented their
modest Social Security income of $20,000 to $30,000 per year. The
interest rate on savings during normal economic times was generally
2% above inflation, which hovered around 3% in 2007 according to
the data manipulators at the BLS.
As the summer of 2008 progressed, I felt more disconnected. I had
been doing everything possible to support Ron Paul’s candidacy for
president, but the masses weren’t ready for the truth or the
reality of our situation. In my opinion the country was already
off-course and headed towards a debt created disaster. But the
average American was oblivious. The economy appeared strong.
People’s 401ks were soaring. And homeowners in many markets had
seen their homes double in value – on paper. I felt stupid as I had
exited the stock market and bought some bear mutual funds and ETFs
during 2007 and 2008.
The stock market had more than doubled since the 2002 lows. The
control fraud systematically implemented by the Wall Street cabal
and their captured political hacks also drove home prices to
astronomical heights, making the average home owner think they were
richer than they were. Billions of home equity loans were used by
delusional dolts across the land to buy luxury vehicles, take
exotic vacations, and basically live far above their means. When
that fake equity evaporated like a puddle in the Sahara Desert, the
delusional masses found themselves living in those luxury vehicles,
until the repo man showed up.
The irrationality and insanity of the Wall Street created housing
bubble was perfectly captured in Michael Lewis’ brilliant takedown
of the Wall Street cabal in the Big Short. When Steve Eisman
interviews a Florida stripper doing a pole dance and finds out she
“owns” five houses and a condo, he realizes the housing boom is a
complete fraud and goes all in shorting the exotic worthless
derivatives created by the criminal bankers.
September 2008 marked the beginning of this Fourth Turning, with
the global implosion of financial markets, the bankruptcy of Lehman
Brothers, double digit unemployment, six million home foreclosures,
a 50% collapse in the stock market, the deepest recession since the
1930s, and shell-shocked consumers defaulting on credit card and
auto loans to the tune of hundreds of billions.
As consumer credit contracted, retail stores began going bankrupt
in vast numbers. Mall operators were left with 50% or vacancy
rates. They couldn’t make the loan payments on their debt. By March
of 2009 the country was in a full-blown crisis. My storage area in
my basement was filled with food, cases of water and other
emergency supplies. I was sure we were at the beginning of an
economic period, similar but worse than the Great Depression of the
1930s.
I certainly overestimated my forecasting ability and underestimated
the abilities of the ruling class to take outrageously reckless
steps to retain their power and manipulate the masses into
believing extreme abnormalcy was actually normal. The first outrage
perpetrated by the oligarchs was passing the $700 billion TARP
bailout of the feckless Hank Paulson lied and threatened to protect
his billionaire buddies.
The turning point occurred on March 16, 2009 when the pocket
protector wearing spineless weenie accountants at the FASB were
threatened by Bernanke and his henchmen into overturning their mark
to market rule and allow the criminal Wall Street banks to value
their worthless mortgages at whatever they chose.
Citicorp, Bank of America, AIG, GE, Goldman Sachs, and most of the
other “Too Big To Trust” goliath banks were bankrupt. They should
have been liquidated using the bankruptcy process, with their good
assets sold to banks who did not undertake fraudulent risks, and
their executives and investors suffering the consequences.
The fear mongering and fake accounting propagated by Bernanke,
Paulson, Geithner, and their corporate media fake news propaganda
machines had the sole purpose of shifting the fraudulently created
Wall Street private losses to the taxpayers through deficit funded
handouts, free money, accounting fraud, and throwing senior citizen
savers under the bus. Wall Street became richer than ever while
Main Street got fucked again.
As a Ron Paul, Austrian school of economics believer, myself, along
with many other logical minded rational thinking people, believed a
short violent recession where bad debt was expunged from the system
through liquidation and the economy was reset based on corporations
and consumers acting conservatively and living within their means –
using debt sparingly for long-term purposes, was the best road
going forward.
I overestimated the intelligence, critical thinking skills,
self-restraint and math aptitude of the masses by believing they
had learned their lesson after experiencing the second Fed induced
market crash in an eight-year period. I thought the American people
and their leaders would come to their senses and realize the
parabolic increase in debt since the 1990s had to end.
I underestimated the level of fear amongst the Fed, financiers,
politicians, mega-corporations, and billionaire oligarchs when just
a leveling off of credit market debt resulted in global financial
implosion. And I clearly underestimated the illegal lengths
Bernanke and his fellow puppets would go to in order to save their
Wall Street owners and corporate, political and media parasites
reliant upon the ongoing Ponzi debt scheme being sustained.
If I had only believed in the power of massive debt issuance, nine
years of zero interest rates for Wall Street banks, $3.6 trillion
of Fed QE to relieve Wall Street of its bad debt, hundreds of
billions of debt financed corporate stock buybacks, luring millions
into 7 year auto loans, and allowing Wall Street hedge funds to buy
up the millions of foreclosures and rent them back to those who
they had booted onto the street.
If you told anyone in 2007 the national debt would go from $9.4
trillion to $22.8 trillion in twelve years, they would have called
you a loon and laughed you out of the room. Now the national debt
is 105% of GDP and consumer debt exceeds $4 trillion. Millennials
are enslaved with $1.6 trillion of student loan debt, up by $1
trillion since 2009. The ruling class and their propaganda machine
have convinced the masses $1 trillion annual deficits are normal
and sustainable. Nothing bad has happened – Yet.
Our so-called leaders have implemented the exact opposite
“solutions” to a debt crisis than what was required. Of course,
this is true only if our leaders were interested in the long-term
sustainability of the nation and its unborn future generations. If
the ruling class is only concerned with their wealth, power and
control over the masses, then their actions make complete sense.
If I hadn’t underestimated the evilness, greed and egocentricity of
the entrenched establishment oligarchs, I would have stayed
invested in the market, reaping the 300% returns since the 2009
lows. It has certainly paid to bet on the continued treachery of
the traitorous central bankers, politicians, mega-corporation
executives, and the fake news media. Only truly devious, deceitful,
demented wizards of financial fraud could drive total credit market
debt from $54 trillion to $74 trillion as the solution to a debt
crisis.
After eight years of emergency level financial suppression, the
latest Fed puppet, Jerome Powell, dared to raise rates above zero
and suspend the continued buying of government debt. If we were
really operating in a normal economic environment, market rates
would be in the 4% range. But, miniscule .25% increases over a
couple years pushing the Federal Funds rate to 2.25% was too much
for Wall Street and the president to handle.
They have both been throwing hissy fits for the last year,
intimidating and threatening the weak-kneed Powell into cutting
rates with unemployment at all-time lows, the stock market near
all-time highs, and the economy in its tenth year of expansion.
Powell’s cowardly surrender is proof the Fed is nothing but Wall
Street’s bitch, subservient and pliable to pressure from its
owners.
“They’re keeping the rates down so that everything else
doesn’t go down. We have a very false economy. At some point
the rates are going to have to change. The only thing that is
strong is the artificial stock market. The U.S. economy is in
a big, fat, ugly bubble. I will get rid of the nation’s more
than $19 trillion national debt over a period of eight years.
I’m renegotiating all of our deals, the big trade deals that
we’re doing so badly on.” – Donald Trump, September 2016.
...
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