"News that's not known, or not known enough."
Helen & Harry Highwater's cranky weblog of news and opinion.
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"News that's not known, or not known enough." Helen & Harry Highwater's cranky weblog of news and opinion. |
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We are all trapped in The System
Largest U.S. municipal bankruptcy looms in Alabama
Now looka here, Bubba. The total "notional" value of derivatives is more than $500 TRILLION ("notional" refers to the value of the underlying securities upon which the /derivative/ wagers are based.) These Alabama "rocket scientists" made WAGERS which everyone else calls "derivatives" in Interest Rate Swaps. That allowed them to buy the right to pay lower interest rates on their long term debts. Sounds tricky and weird, huh? You woulda figured that they coulda just kept things simple and just taxed the literal shit out of their citizens to pay for their sewer system upgrade the old fashioned way. But noooooo... This has got to be one of those "crowd think" situations, otherwise known as Monkey See, Monkey Do, but where the monkeys are juggling lit sticks of dynamite. Warren Buffett called derivatives "Financial Weapons Of Mass Destruction." And now we learn that cities and states all over the country decided to play with derivatives to save a few bucks? A little known fact is that governments at all level have continued to employ workers using old style employment agreements. Those are the deals where, at retirement age, employees receive generous pensions and lifetime health benefits after working for as little as 20 years. Corporations stopped doing that shit back in the late '80s, except for the top levels of management. Too expensive. Plus, because politicians running governments are unaccountable to "the market", they have tended to generously increase salaries during the same time period. So you have cops and firemen with starting pay of $70,000 and eventually with overtime these jobs pay 6 figures, NOT COUNTING BENEFITS. This year cities and states are going to be required to account for and report unfunded pension and healthcare liabilities (future estimates.) And at the same time, tax receipts are going to decrease dramatically due to falling real estate prices, foreclosures, job losses, and corporate profit declines and losses. We saw this before, in the 2001 stock market bear: financial losses result in tax deductions! Sooooo ... if simultaneously we have cash-strapped cities and states getting hammered by their funky derivatives wagers, what will happen? Who knows? It won't be a happy scene, that's for sure. The Federal Reserve has lowered the "Fed Funds" interest rate to 2.25% and will lower them again this month. That is a negative rate of interest because inflation, even according to the phony numbers from the US government was 4% over the last year. It isn't just food and oil. Overall the price of imported goods rose around 15% in the last year! And our trade deficit started to climb again last month So let's say you saved up your money and bought a CD from a bank. They might pay you 2% interest for a 1 year CD, so you earn two entire pennies for each dollar you lend to them, and then at the end of the year you a) pay 25% income taxes on the 2% "profits" and b) the amount of stuff you can buy with your 102% of invested money has decreased by at least 4%. So you start the year with $1000 and at the end of the year you have purchasing power of no more than $974.40. That's right, the government took away $25 of your money as a penalty for being a good, thrifty, non-subprime debting citizen! (And those numbers are based on the phony government CPI stats The reason for this is that it is intentional. The government MUST create inflation so that the over-indebted citizens, corporations and government bodies can repay their obligations with radically devalued funny money in the future. It is a stealth tax increase on honest, hard-working, decent American citizens. It is class warfare on a grand scale. We know who is doing it, too People talk about inflation like they talk about bad weather, but not too many people realize that it is deliberate, long-term policy. Did you know that approximately 60% of Republican voters still give Bush a positive job approval rating? OK, these aren't "bad" people. They just didn't get the memo. They didn't get hit by the lightening bolt of enlightenment. They weren't told of the facts. They haven't been paying attention. Really, they are victims too. How sad for them to live in a delusional state believing in imaginary things! At one time Mahatma Gandhi was regarded as a dangerous criminal. He was even jailed by the British Empire. A little brown man wearing what we could consider the equivalent of homespun diapers helped defeat the greatest empire in the history of the world! Later, another proponent of non-violent resistance, Martin Luther King, was regarded by the FBI as the most dangerous man in the USA. MLK rocked "The World" and shook up The System. The Second Amendment is a great thing, a foundation of the Constitution. But we won't beat The System with guns. That would only make The System stronger. Enlightenment is the goal, with information, brains and love as the tools. We need to persuade people, not make enemies out of them. And isn't that also the lesson of Iraq? The US lost the war there, and is losing the "War on Terror", because unless the U.S. is prepared to kill EVERYONE in Iraq and every believer in Islam, it cannot win this war with bombs and bullets.
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