Is America’s Economic Recovery On The Whole Based On A Rotten Sham?

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DrKrbyLuv's picture
DrKrbyLuv
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Joined: Aug 10 2008
Posts: 1995
Is America’s Economic Recovery On The Whole Based On A Rotten Sham?

The economic “recovery” we are now witnessing is based on theft, greed and deceit. It’s a giant rip-off, a rotten sham. In this sleazy imitation of a free market economy, liars, cheats and deadbeats are the ones getting rewarded.

And as for the savers, the hard workers, the ones who chose to honor their debts and live within their means? Nothing but a bunch of suckers. (They’re the ones paying for it all.)

No Morals Is the New Normal

Two weeks ago your humble editor asked, “Did the Housing Bust Fuel the Consumer Spending Binge?” In that piece, it was explained step by step how the phenomenon of “strategic defaults,” i.e. homeowners walking away from their mortgages, may have fueled a surge in retail spending by way of freeing up cash.

As it turns out, it looks like the strategic default thesis was correct. And this helps show why those who were expecting a “new normal” got it wrong.

  • My 25 year old niece had $10,000 of outstanding credit card debt. Recently, she told the bank she couldn’t pay. She is not unemployed so the ‘hardship’ is all relative. Nevertheless, the bank offered her a concession which she refused. They offered another concession, she refused again. Finally, they told her if she paid $150/month for 2 years (total of only $3600 with no interest), they would call it paid in full! She accepted in a heartbeat. It is less than a month later, and she celebrated her good fortune by going on a cruise to Hawaii.
  • A friend owns a small manufacturing co. He tells me of one of his female employees who was saddled with a $450,000 home she purchased almost five years ago with no down pmt. One year after her purchase she pulled $75,000 home equity and purchased ‘fun stuff’ including a boat. She recently walked away from the house (now saddled with $525K mortgage), purchased a new house for $200,000 (in her sister’s name) and kept all the goodies purchased from the home equity withdrawal. With the much lower mortgage payment she just bought a new car.
  • My brother-in-law wanted to know if he should stop making payments on everything. He lives in Virginia and his carpentry skills are not as marketable as they were in the height of the boom. He and his wife’s best friend have lived close-by for many years. For the past 13 months since they strategically decided to stop paying their mortgage, they had yet to be contacted by their bank. Not even one letter! My brother-in-law doesn’t understand how they get to pocket the mortgage and spend carefree, including a 10-day Caribbean vacation.

The Revolutionary Rip-Off Machine

To understand why the banks don’t really care about strategic default losses - why they can let defaulters go a year or more without so much as a slap on the wrist - take a look at the following chart from Gluskin Sheff.

The chart shows the financial sector’s profits as a percentage of all corporate profits in total

Before the crisis hit, the financial sector had worked its way up to more than a third of all corporate profits at the peak - an obscene number in itself. Thirty-three cents out of every dollar earned by way of financial engineering? You don’t see that kind of imbalance in a healthy economy… only in a paper casino “phinance” economy, where the “ph” is for phony.

A License to Print

So how are the banks ripping off the taxpayer, you ask? By way of the record steep yield curve. In keeping short-term rates near zero, the Federal Reserve has given the banks a license to print money.

Thanks to Ben Bernanke, banks can borrow as much as they want for practically nothing… plow that cash into longer-dated U.S. Treasuries… and make perpetually huge profits with little to no risk. It’s like a permanent backdoor bailout subsidy.

Small Business Pain

Meanwhile, even as corporate America rejoices, small business continues to starve. According to a recent survey from the National Federation of Independent Business (NFIB), the credit picture is worsening for small business now. Despite all the hoopla, the employers of more than half of America’s workforce have reason for pessimism, not optimism, in the quarters ahead.

An estimated 47% of Americans pay no taxes at all… and the fat cats at the top of the oligarchy ladder certainly get a lot more out of the system than they put in.

To be honest, I don’t really know what to think of my country any more. This ridiculous, debauchery-ridden, quasi-socialist Ponzi-scheme of a recovery is going to end in absolute disaster. Crushing deflation, hyperinflation, heck, maybe even martial law… it could all be coming down the pike, in wave after debilitating wave, when the music finally stops.  - complete article link

The writer of this article is waking up but still doesn't understand what is going on.  The coup of 1913 gave away our financial sovereignty to the international banking cartel.  They create money on our credit (only "We the People" back it up) and then charge us interest and principal for money created for free.

This has been going on for quite awhile but now they finished transferring wealth and will soon be taking our pledged collateral.  It has always been about financial enslavement and now, they are moving to a tyrannical new world order to end the nation state. 

We as a people are too ignorant to figure out that we can take our power to issue money any time we want.  We will pay dearly as we submit ourselves and future generations to life as serfs under feudalism.

Larry

V's picture
V
Status: Platinum Member (Offline)
Joined: Dec 14 2009
Posts: 849
Re: Is America’s Economic Recovery On The Whole Based On ...

 

 

gyrogearloose's picture
gyrogearloose
Status: Platinum Member (Offline)
Joined: Sep 8 2008
Posts: 549
Re: Is America’s Economic Recovery On The Whole Based On ...
V wrote:

 

 

sorry you are wrong..... lies arn't nothing.....Laughing

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