The International Forecast
The Crony Capitalist Bailout Nation
written by Bob Chapman
Saturday August 8, 2009
When the subprime/credit-crunch debacles first unfolded, we took the position that there should absolutely be no bailouts because such things are illegal, unfair, immoral and flagrantly unconstitutional. You do not mess with private contract rights, or dole out special privileges to a chosen few on a whim, lest you become known as just another Banana Republic. We are a nation of laws and legal precedents. You don't throw out hundreds of years of legal precedent by subordinating secured bondholders to unsecured creditors, all with the blessing of our Supreme Kangaroo Court and its nine numbskulls, who are appropriately dressed like Darth Vader, and then expect any other nation in the world to take you seriously.
The Crony Capitalist Bailout Nation
written by Bob Chapman
Saturday August 8, 2009
When the subprime/credit-crunch debacles first unfolded, we took the position that there should absolutely be no bailouts because such things are illegal, unfair, immoral and flagrantly unconstitutional. You do not mess with private contract rights, or dole out special privileges to a chosen few on a whim, lest you become known as just another Banana Republic. We are a nation of laws and legal precedents. You don't throw out hundreds of years of legal precedent by subordinating secured bondholders to unsecured creditors, all with the blessing of our Supreme Kangaroo Court and its nine numbskulls, who are appropriately dressed like Darth Vader, and then expect any other nation in the world to take you seriously.
Our nation has lost any modicum of credibility and integrity, and the only nations who continue to deal with our government are the ones whose governments are even more criminal than ours is and/or who are caught in a "dollar trap." This fact alone is enough to kill the bond markets. This total disregard of the law and of legal precedents creates tremendous risk in the minds of foreign investors, and that means higher interest rates, and lower bond values, both public and private. And never mind the coming hyperinflation! We deserve to have the dollar lose its reserve status and to have our treasuries rated as "junk" bonds based on the actions of our leaders alone, much less the state of our economy. No contract is sacred anymore. They just make up the rules as they go along.
When we recommended against bailouts, we initially were referring to the subprime borrowers who lied on their applications and never should have been given mortgages in the first place. Bailing out failed financial institutions was the farthest thing from our mind because it was simply unthinkable. Instead, we have seen subprime borrowers given token help and watched in horror as the failed Illuminist financial institutions were given the key to Goldman Sachs South and its Treasury Department. We watched slack-jawed as the United States of America became the "Crony Capitalist Bailout Nation." If anyone is going to be bailed out, it should be the taxpayers and not the elitist transnational corporations and financial institutions who park their foreign profits offshore and don't pay any taxes on those profits! COME ON!!!
But the bailouts of "anointed" Illuminist companies have served one purpose very well. They have provided us with the smoking gun that proves the existence of the Illuminist agenda which we discuss in every issue of the IF. What do we mean by that? As Joan Rivers would say: "Let's talk."
Let us first say that the only sensible solution to all the ongoing debacles, other than an immediate purging of the economy which is what we recommended because it would minimize the pain of financial excess and maximize the speed of recovery, would have been to correct the defaults that were causing the various real estate and other credit derivatives to lose value. The defaults could have been corrected by making the loans current or even by paying them off altogether.
When we recommended against bailouts, we initially were referring to the subprime borrowers who lied on their applications and never should have been given mortgages in the first place. Bailing out failed financial institutions was the farthest thing from our mind because it was simply unthinkable. Instead, we have seen subprime borrowers given token help and watched in horror as the failed Illuminist financial institutions were given the key to Goldman Sachs South and its Treasury Department. We watched slack-jawed as the United States of America became the "Crony Capitalist Bailout Nation." If anyone is going to be bailed out, it should be the taxpayers and not the elitist transnational corporations and financial institutions who park their foreign profits offshore and don't pay any taxes on those profits! COME ON!!!
But the bailouts of "anointed" Illuminist companies have served one purpose very well. They have provided us with the smoking gun that proves the existence of the Illuminist agenda which we discuss in every issue of the IF. What do we mean by that? As Joan Rivers would say: "Let's talk."
Let us first say that the only sensible solution to all the ongoing debacles, other than an immediate purging of the economy which is what we recommended because it would minimize the pain of financial excess and maximize the speed of recovery, would have been to correct the defaults that were causing the various real estate and other credit derivatives to lose value. The defaults could have been corrected by making the loans current or even by paying them off altogether.
The math is totally obvious. Anyone with a high school diploma, a calculator and Internet access could have figured it out. Yet apparently the people with 1600 combined SAT scores, Ivy League diplomas and many years of Wall Street experience apparently could not figure this out. Do you really believe that? If so, you are incredibly naive. You probably also believe that the psychopathic leverage, moronic lending standards and outlandish ratings on bonds and derivatives were the product of mistakes, greed and poor judgment. Again we say: COME ON!!!
Moral Hazard (Noun)•S: (n) moral hazard ((economics) the lack of any incentive to guard against a risk when you are protected against it (as by insurance)) "insurance companies are exposed to a moral hazard if the insured party is not honest"
Moral Hazard (Noun)•S: (n) moral hazard ((economics) the lack of any incentive to guard against a risk when you are protected against it (as by insurance)) "insurance companies are exposed to a moral hazard if the insured party is not honest"
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