----- Original Message -----
From: Jon Roland
To: [email protected]
Sent: Monday, July 13, 2009 10:37 AM
Subject: [Lis-LEAF] "It's all just one big lie"
Six Syllables to a Savage Truth
By Stewart Dougherty
On December 9, 2008, $65 billion of investor money was at peace. On the
fear / greed seesaw that is said to characterize investor emotion, fear
was down on the ground, while greed was high in the sky, having all the
fun. Greed was earning a steady 1% per month, making fear look like an
over-cautious fool.
On December 10, 2008, six simple syllables transformed that greed into
lead, sending it crashing to earth while launching fear to the moon.The
syllables were these: "It's all just one big lie," and they were spoken
by Bernard Madoff, in an admission that his investment fund was nothing
but an illusion and a fraud. They represented a savage truth that would
wipe out the savings of thousands, and toll the bell for the rest of the
world's investing public.Those six syllables possessed powers far beyond
their size. They forced $65,000,000,000.00 to vanish back into the thin
air from which they had materialized. Thin air has been busy these days,
as you will see.
The fact that a mere six syllables could cause a multi-year,
$65,000,000,000.00 fraud to implode is testament to the truth's
simplicity and power. The truth represents intellectual gravity, and
sooner or later, all things fall into its arms, whether they want to or
not. The truth does not need phalanxes of lobbyists, czars, public
relations personnel, pundits, pontificators, propagandists, pollsters,
or politicians to express itself. Rather, it represents magnetic north,
toward which the human consciousness is naturally inclined. In the
beginning of the revelation of a truth, only those with courage can see
it; in the end, it is clear to everyone.
[Editorial note: In this article, we will express numbers in digits. The
government, financial "services" industry, and television talking heads,
to name a few, are currently bombarding society with the terms
"billions" and "trillions." The constant repetition of these terms has
given people a false sense of familiarity with them, and made them
appear "normal" and "everyday." These colossal sums are anything but
normal and everyday. They are monsters that are tearing apart our
fiscal, financial and monetary systems. Those who casually throw around
a trillion here and trillion there, such as the steady parade of CNBC
commentators, try to act as if they understand the magnitude and
implications of these sums, but they don't, because the sums are
incomprehensible and their systemic consequences are totally unknowable
and unpredictable. This is patently obvious given the extreme financial
crisis afflicting our nation and the world. Also, only "two" of
something, such as trillions, doesn't seem like very much to most,
whereas the written expression of that same number, in this case
$2,000,000,000,000.00, does.]
Compared to current fiscal, monetary, economic and financial reality in
the United States, Madoff's losses were modest, even quaint.The USA's
fiscal year 2009 federal loss (which is euphemized for the masses by the
term "deficit," which sounds technical, econometric, and not nearly as
bad as what it really is, a loss) will exceed $2,000,000,000,000.00,
more than 30 times Madoff's $65,000,000,000.00 loss. Keep in mind that
it took Madoff a professional lifetime to lose that money; the United
States will lose $2 trillion in just one year, and according to official
budget projections will continue losing hundreds of billions more,
annually, for decades to come. (More on this in a minute.)
The cost of the government's financial-crisis-related bailouts and
guarantees currently exceeds $13,500,000,000000.00, which is 200 times
larger than the Madoff scandal. And the nation's unfunded contingent
liabilities, for programs such as Social Security, Medicare, Medicaid,
government pensions and the like stand at $75,000,000,000,000.00, 1,150
times larger than Madoff's fraud. They should let Madoff out of jail and
put him in charge of the Treasury. Maybe America could get some relief.
Of course, these numbers make laughable the government's righteous
indignation and shocked disbelief that a "Ponzi scheme!" as "large" as
Madoff's could have operated in the United States. The government's
response is a textbook example of the intelligence industry's
attention-diverting technique known as misdirection.
In June, 2009, the Congressional Budget Office, a government entity,
issued its "Long Term Budget Outlook" for the period 2010 through 2080.
The executive summary begins with these words: "Under current law, the
federal budget is on an unsustainable path -- meaning that federal debt
will continue to grow much faster than the economy over the long run."
While that statement might seem stark, it is the verbal equivalent of
morphine compared with the actual numbers in the CBO's long term budget
projection, which are nothing short of terrifying.
According to the CBO, over the next SEVENTY fiscal years, the federal
government will NEVER have a surplus. Rather, the United States will
continue to suffer massive, escalating, multi-hundred billion dollar
losses ("deficits") each and every year for the next SEVEN DECADES,
which is when the budget projection stops. Under both CBO budget
scenarios (catastrophic and worse-than-catastrophic), losses in fiscal
year 2080 will be the largest of the entire 70 year series, meaning that
the budget crisis will continue well beyond 2080. In the best case, the
2080 loss will be 17.8% of GDP; in the worst case, it will be 42.8% of
GDP. To put this in context, the 2009 federal budget loss is projected
to be 11.9%, in this, the worst financial crisis in American history. So
2080 will be 50 - 300% worse than now. Who the CBO thinks will fund
these trillions of dollars' worth of forever losses, they do not say.
Apparently, America is headed back to the Stone Age, thanks to our
profligate politicians and corrupt financial elite.
The United States has already reached the point where it is
arithmetically impossible for it to pay its debts or keep its promises,
unless it devalues its currency to the point where it impoverishes its
citizens and creates international financial chaos. And even devaluation
as a means of ending the country's budget nightmare will be difficult,
given that so many government programs have cost of living escalators,
making inflation a No Exit horror story. This is not subjective opinion,
but rather objective, arithmetic fact, now supported even by government
agencies themselves, such as the Congressional Budget Office. As John
Williams of shadowstats.com has observed, even if personal incomes were
taxed at 100%, the United States still could not pay its bills.
Astonishingly, given this fiscal context, the government now proposes to
effectively nationalize the nation's health care industry, with
projected additional losses of $1,000,000,000,000.00, a number we can be
100% certain will prove to have been grossly understated. Additionally,
it has created $13,500,000,000,000.00+, so far, to bail out Wall Street,
at the direct expense of America's citizens, adding to the nation's debt
misery and hopelessness.
All the while, government has looked on with apparent admiration, envy
and awe as Goldman Sachs announced that despite America's financial
catastrophe and despite the fact that it gorged earlier this year at the
feed trough of taxpayer bailout money, they will reward their staff with
record bonuses in 2009, totalling some $20,000,000,000.00. They are
taking the taxes paid by everyday people such as nurses, teachers, auto
workers and fast food clerks, and stuffing their pockets with it. Of
course, that is just the tip of the iceberg. The rest of Wall Street
will lavish itself with taxpayer-funded bonuses, too.
Even more astonishingly, on June 26, 2009, in the midst of America's
employment and economic meltdown, Congress approved $108,000,000,000.00
in loan-guarantee funding for the International Monetary Fund (IMF), so
the IMF can provide financial assistance to "poorer nations." No
citizens on earth are as indebted as Americans, given the nation's
$11,500,000,000,000.00 federal debt, and more than
$85,000,000,000,000.00 of combined federal debt and unfunded contingent
liabilities. So how the world's most indebted nation proposes to provide
assistance to "poorer" nations is a fiscal mystery, the solution to
which is apparently known only to the spendthrifts in Washington.
Unless, of course, the money were slated to return to the United States
as "foreign aid," but that is not the plan. What arrogance, callousness
and conceit on the part of our government, to strap this added tax
burden onto the backs of American citizens, who are already the most
debt-enslaved people in the world.
The IMF funding is in ADDITION to the government's June 26, 2009
$106,000,000,000.00 supplemental war appropriations bill, which was
supposedly meant to pay for continuing military operations in Iraq and
Afghanistan, but which includes U.S. taxpayer gifts of $660,000,000.00
for Gaza, $555,000,000.00 for Israel, $310,000,000.00 for Egypt,
$300,000,000.00 for Jordan, $420,000,000.00 for Mexico, and
$889,000,000.00 for the United Nations, for so-called "peacekeeping"
missions. War is peace. Orwell must be laughing himself sick, six feet
under.
Congress is in such massive denial about the fiscal and financial crisis
they have already created that their spending orgy continues without
restraint. In fact, the out-of-control spending is now so outrageous
that one can seriously argue that Congress, the Treasury and the Fed are
deliberately trying to destroy the United States. Bob Chapman
(www.theinternationalforecaster.com
<http://www.theinternationalforecaster.com>), a brilliant analyst and
publisher of one of best newsletters in the world, has long argued that
what is happening is part of a systematic plan to bring this country to
its knees so a one-world government-for-profit, owned and operated by
global power brokers can be implemented. His ideas deserve deep and
thoughtful consideration, because his track record thus far has been
nearly perfect.
The fact is that the United States is suffocating in what has become an
airless House of Lies. Social Security is a promise that cannot be kept
with anything even remotely resembling America's current "money," and is
therefore a lie. Medicare and Medicaid are promises that cannot be kept,
and are also lies. SSI benefits cannot be paid into the future, and are
lies. The federal debt cannot be paid, and is a lie. Government pensions
cannot be paid, and are lies. The prescription drug program is
unaffordable, and is a lie. Food stamps and other forms of welfare are
unaffordable, and are lies. And the list goes on and on.
Arnold Toynbee wrote, "An autopsy of history would show that all great
nations commit suicide." This is exactly what we are witnessing today in
the United States: fiscal and economic suicide. As America's
"leadership" injects financial poison into the country's veins, the
citizens stand by and watch, having not a clue about what to do to stop
the destruction. Today's unavoidable reality is that tens of millions of
American citizens are going to die financially before they die
physically, thanks to government losses and crony payoffs that enrich
and empower a small, shameless, greed-stricken minority at the expense
of the entire nation. This latter point is amply demonstrated by
Washington's race to Wall Street's defense via the recent bailouts,
where trillions of taxpayer dollars were handed over to
centimillionaires for nothing, while for the past 20 years, it stood by
and did nothing as the lives of millions of American workers were turned
upside down when they lost jobs that migrated overseas thanks to
state-sponsored globalization, another moronic and disastrous market
intervention.
Despite the CBO's calm outline of the next seven decades' worth of
ceaseless, staggering American operating losses and surging debt, we are
fast approaching endgame. One of the greatest prize fights in all of
history is about to begin. In one corner of the ring will be a scrawny,
sick-looking contender called The Lie, coached by Washington, D.C. and
Wall Street. In the other corner will be a 250 pound, aerobically
perfect, experienced fighter called The Truth, coached by the collective
wisdom, experience and technique of Time. Once the fight starts, it will
be over in a second. The same way Madoff's fund was knocked out with one
punch, once he put his Lie into the ring with The Truth.
Speaking once again of Madoff, as a citizen, you must ask yourself this:
what if an official at the Federal Reserve or the Department of the
Treasury woke up one morning, seized by his or her conscience? What if
this official could not continue to lie about America's finances?
What if, in a moment of personal honesty and catharsis, that official
repeated in public, say, at a Congressional hearing, those six simple
syllables spoken by Madoff? What if someone in authority admitted that,
"It's all just one big lie"?
What would happen to the bond market? The stock market? The financial
system? Your local bank? The Federal Reserve Note? It seems logical that
all of these would all suffer, probably mightily. And the prices of gold
and silver? Wouldn't they go up, potentially by an order of magnitude,
as millions scrambled for financial sanctuary?
The financial laws of gravity are exactly that: laws. The narcotics of
hope and denial cannot repeal them, just as they cannot make a butterfly
turn into a 747, convert lead into gold, make America's debt disappear,
or transform Bernanke into a mangod who can make the consequences of
gross fiscal and economic dereliction go away, just because he says so.
The financial laws of gravity say that it is impossible to indebt a
society into prosperity, or moneyprint everyone rich. In fact, reality
says the exact opposite: endless debt and money creation impoverish and
enslave a people, while enriching to a grotesque degree a relatively few
opportunistic, immoral, greedy, insider manipulators, just as we have
seen and continue to see.
If government were genuinely trying to fix this mess, then perhaps we
could have some hope, even though we are already beyond the fiscal point
of no return. But recent actions, such as the June, 2009
$108,000,000,000.00 ($108 BILLION) added funding for the IMF, and the
proposed nationalization of health care, to cite just two relatively
minor examples, demonstrate that Washington is, at best, incapable of
recognizing the seriousness of the country's circumstances, or, at
worst, is spending us into oblivion on purpose. (Collectively, could
they really be this reckless, stupid and destructive? Is that
conceivable? Or is something far more evil and diabolical at work?)
Pinning one's hopes to "change" is an act of insanity given the
situation. The only change in America is the total lack of it.
There is a solution: It is called the truth. The United States
government must irrevocably admit that its wanton, escalating experiment
with socialism, which is now veering into something even more sinister,
called corporatism, which is another word for fascism, has failed
catastrophically, just as it has failed every other time throughout
history that it has been attempted. And the people must be told that
this nation can return to greatness only if they and their government
will re-embrace the virtues that made it great in the first place:
honesty, responsibility, restraint, ingenuity, hard work, self-reliance,
morality, character, dignity, honor, duty, sacrifice, patriotism and an
abiding belief in something greater than ourselves.
Each reader can make his or her own decision as to whether America and
its "leadership" will have the strength to face the truth, or not. If
they do not, then we will soon enter a period of personal and financial
survivalism. If you believe that the nation will not face reality, then
you must immediately begin to put your affairs in order. Those who think
ahead will be able to survive the whirlwind that denial will unleash.
But those who stand before such a tornado, unprepared, have poor and
more likely tragic prospects. The odds that you, the reader of this
article, will find a way to prevail are good. But unfortunately for your
fellow citizens, you are in a small minority. You are distinguished by
courage, thoughtfulness, an ability to face facts, resourcefulness, and
a genuine concern not just for yourself, but for all who are dear to
you. Those virtues were required to get you to this point in this
difficult article. Those same virtues will save you as the flag of the
future unfurls.
July 10, 2009
**********
Stewart Dougherty is a specialist in inferential analysis, the practice
of identifying patterns and trends from specific, contemporary events,
and then extrapolating their likely effects upon the future. Inferential
analysis can be highly predictive. Dougherty was educated at Tufts
University (B.A.) and Harvard Business School (M.B.A., and an academic
Fellow). He can be reached at: [email protected]
<mailto:[email protected]>. He is not affiliated with or compensated by
those he references or recommends. The reader has permission to share or
post this article as desired, as long as the content remains unchanged
and the author is acknowledged. Copyright 2009 by Stewart Dougherty,
with all rights reserved.
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