The Greatest Depression

The FDIC has warned that well over 100 banks, and possibly over 200 banks, will fail in the coming year. Considering that the failure of just IndyMac bank depleted the FDIC's reserves 10-20%, the average investor should watch the financial pages with great concern for his or her own economic sustainability and fiscal well being.

America has a financial disease which will only get worse. But the problem's root does not lie with the banks. It starts with the mortgage lending rules being relaxed to boost the economy after the terrorist attacks of September 11, 2001. Loaning money to anyone who could fog a mirror led both directly and indirectly to the current housing market depression, in which some California developers have been seen selling two houses for the price of one, and foreclosures have ballooned to all time highs.

The abundance of those new, seemingly infallible mortgages after 9/11 caused new markets to erupt as collateralized debt obligations (CDO's) and mortgage backed securities evolved an ecosystem of complex derivatives instruments that bundled and packaged worthless paper to sell to a public who unwittingly purchased and traded them as though their AAA rating wasn't its only collateral, when in fact, it was. That $1 quadrillion market has effectively ended itself, because buying and purchasing debt means exactly that. It means you are buying and selling something that holds absent value.

The hedge funds are heavily invested in the derivatives markets, and they are just now starting to fail alongside the banks. Just last night, the $3 billion Osparie Fund collapsed, giving an insight to the financial trauma possible by these hedge funds, the financial markets' equivalent of roulette-odds gamblers.

Ever since the Federal Reserve stopped publishing the M3 report of the aggregate money supply in 2006, there hasn't been an accurate governmental accounting of inflation. According to the highly respected economist John Williams from www.shadowstats.com (as often referenced in bestselling books and in the financial papers), real inflation is currently around 17%. Yep, really.

Another statistic the Fed has recently discontinued has been the amount of foreign wealth invested in America. If one happens to read the financial pages, as I do, it's obvious that the government doesn't want people to know that sovereign wealth funds from the Middle East have already begun to purchase large percentages of the skylines of major cities, major ownership in major banks like Citigroup, large blocks of cities' foreclosed suburbs they can buy for pennies on the dollar, major bridges, entire HIGHWAY systems they're turning into toll roads, and even (and here's the REAL shocker) the PUBLIC UTILITIES OF DISTRESSED CALIFORNIA CITIES.

Overreaction? No, I think not. Wisconsin Republican Congressman Paul Ryan told the right-wing news outlet CNSNews.com that the bankruptcy of the Republic is a certainty, that all the public actuaries and all the objective scorekeepers of the federal government are predicting total bankruptcy. (http://www.cnsnews.com/public/content/article.aspx?RsrcID=33574)

So America's leadership, in a response to this looming threat, is merely letting the repo man come collect his due. China funds us, South Korea funds us, Russia funds us, the EU funds us, and they're getting their money's worth in the form of real property instead of a worthless fiat currency. The Middle East has already gotten first dibs on the most prime slices of the United States, and the rest is being divvied up right now between them and everyone else.

One has only to look at the environmental crackdowns on the private citizenry by bureaucrats from far away to recognize that America's natural physical collateral is merely being preserved so it can later be sold to the highest bidder to negate the current, automatic $500,000 owed by every family, everywhere in this nation, to pay off our government's debt. There are moves being undertaken now to limit domestic manufacturing, return farmlands back to "natural habitats" the DNR stocks with whatever is available, while still selling huge mines across America to foreign mining interests who don't clean up their workspace and don't pay their environmental fines while the "precious" wildlife suffers the consequences. These lamentable events and laws are undemocratic, hypocritical, and they're flat-out destroying America's sovereignty.

Witness now the proposed seizure of private lands in KOOCHICHING COUNTY by the environmentalists through new zoning changes being kept suspiciously quiet. When growth is limited, there can be no growth; that's the goal. Voyageurs National Park and surrounding areas, once menaced by debt and foreclosures and unable to be subdivided as a result of autocratic rezoning initiatives, will make a nice addition to a Saudi portfolio.

A depression is coming. Everyone in government knows it, sophisticated investors know it, and even amateur market-debblers are coming to understand that the contrived but carefully-inked numbers on the forehead of our civilization are screaming one thing and only one thing.

As the screams become the death rattle of the Republic, and as the ink fades to become entirely red, the rest of you will find out what they mean.

The repo man is coming. He's knocking at your door right now.