Yes, Richard, it's appropriate that you should call this voodoo economics,
because that's what it is. That's as opposed to the time that George H.W. Bush
called the Laffer curve by that name. Arthur Laffer was completely correct and
there are thousands of years of history going back to Hamarabi to prove it. But
what we've been living with even since before the creation of the Fed is the
Bank of England model. Benjamin Franklin tried to save us from this, but his
intentions were more or less overwhelmed by the young, brilliant and more
energetic Alexander Hamilton. What we are all living with, Keyensian or not, is
money created as debt.
The average person hasn't the remotest idea what money is, what a bank does, or
that the Federal Reserve in not a government agency, but a private company with
stockholders. You need only to read the Federal Reserve Act of 1913 to see
this. It also appears that the average person does not want to know any of
these things for fear of scaring himself. This is hardly the forum for a
discussion of this type, but since you brought it up I just had to put my two
hundred dollars worth in (inflation, you know).
It's just far too boring for most people, concerned with the price of Chinese
goods at Walmart, to understand the outrageousness of Generally Accepted
Accounting Proceedures (GAAP). They therefore haven't a clue that the Enron
debacle was almost entirely within the rules of those procedures. The only
thing different about Enron was not what they were doing, but that they had
just taken it so far that the company collapsed, even though the fundamental
business was healthy. Cooking the books is completely acceptable within the
rules of GAAP. But the thing is, this only works if you create money as debt,
rather than following the constitutional mandate given to congress. If you ever
need to read financial documents to extract useful information, be very wary
whenever you see the term "reserve", "adjustment", or "variance", this is just
GAAP language for "we don't want you to know what's going on and these numbers
are mostly bullshit".
I never cease to be amazed at the amount of what I consider to be legal
financial fraud that the U.S. economy can absorb. I fully expected some sort of
economic collapse after the savings and loan crisis. But somehow the damn thing
just went away after some major government and Fed smoothing over. I wonder
about it this time, though. There's a lot more money involved and the U.S.
manufacturing base has been thorougly hollowed out by what passes for "free
trade". Already capital from the Chinese goverment is being called in to save
our sorry lazy asses. The Chinese really have no choice because if their
primary export market for manufactured goods collapses, they go into an instant
depression. Who could have predicted this 30 years ago, other than yours truly?
Meanwhile, we hear from both neocons and liberals that we have made the
transition to a "knowledge based economy". Hey Wang, I got me some red hot
all-American knowledge here, how much of it for that flat screen TV?
Cooking the books by Fannie Mae and CitiBank isn't even a challenge under GAAP.
What amazes me is that no one wants to blow the whistle. What good will it do
for them to be taken over by the Fed except to extend the massive fraud for a
few more years? Talk about re-arranging the deck chairs on the Titanic.
We have some nice cactus varieties here in California as well. Do you suppose
we'll get that hungry?
El Nopal
--- "R.C.Macaulay" <[EMAIL PROTECTED]> wrote:
> BlankMSN money news article..
>
> In summary, Rogers says: "We are in a bear market, and only a few big stocks
> that are holding up the big indexes make it look like we're not. Stocks are
> done, and many favorites will go down 80% after people figure out how long
> they've been reporting phony earnings."
>
> It's the remark about phony earnings that is disturbing. He reports a
> prediction that CitiBank and Fannie Mae will both fail and be taken over by
> the Fed.
>
> Fannie Mae has been hiding losses and cooking books for years. They simply
> do not know how much money they have lost.. How's that for management style?
>
> Sure hope the Dime Box saloon can hold down the price of tequila, we should,
> cuz Texas is half cactus, which should count for "sumtin"
>
> Richard
>
> .
>
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