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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