LilBambi’s Blog – BambisMusings

It’s hard to believe how things have gone down in the past two months, but let’s just look at it from 3 months ago till now.

Here’s a snapshot from Bloomberg from August 20, 2008 which is still AFTER things were getting shaky:

U.S. stocks dropped for a third day as speculation grew that government will take over Fannie Mae and Freddie Mac, and oil’s climb to a two-week high sent airlines and consumer shares falling.

Fannie Mae and Freddie Mac, the biggest U.S. mortgage financiers, tumbled more than 17 percent on concern rising debt costs will force the Treasury to bail them out. UAL Corp., the parent of United Airlines, and US Airways Group Inc. declined more than 12 percent. Macy’s Inc. and Kohl’s Corp. retreated, leading retailers lower, after Goldman Sachs Group Inc. said the rally in department stores will end.

The Standard & Poor’s 500 Index slumped 3.84 points, or 0.3 percent, to 1,262.85 at 10:04 a.m. in New York. The Dow Jones Industrial Average lost 41.53, or 0.4 percent, to 11,307.02, and the Nasdaq Composite Index fell 4.08, or 0.2 percent, to 2,380.28. Two stocks retreated for each that rose on the New York Stock Exchange.

The S&P 500 is down 19 percent from an October record after the biggest U.S. housing slump since the Great Depression slowed consumer spending and spurred more than $500 billion of credit market losses for banks globally.

(More in the article link above the quote)

And now – November 15 snapshot from Google Finance:

DOW 8,497.31 -337.94 (-3.82%)
S&P 500 873.29 -38.00 (-4.17%)
NASDAQ 1,516.85 -79.85 (-5.00%)

That’s the result of almost 100 yrs of The Fed (central bank) playing with the the Boom Dot Bust (thanks Firesign Theater) — Inflation and Deflation – in other words playing with the interest rates to create booms and the resultant and ultimately inescapable busts. The longer they play with us (our lives), and that’s what they are doing, the worse the bust will be. They are throwing our own tax dollars through these insane bailouts at “the problem” and they can not stem the bleeding! How many more billions and trillions of our tax dollars will we have to pay (we, our children, our grandchildren and great grandchildren, etc.) for this as our dollar is devalued?

Sandra Hamilton wrote two articles on LewRockwell.com recently that really hit home:

Toxic Anger. Dr. Ron Paul Has the Cure, But Will Anyone Listen?

Most of us know by now that a lot of toxic debt has been filling up the balance sheets of our financial institutions creating one heck of a financial meltdown. What we do not know is what the solutions to those problems are going to create in terms of human emotion.

Everywhere you turn these days you hear cries of “we have to save the homeowners; we must lower their payments and keep them in their homes.” Why? Why do we have to save these people? Why should someone get to have a home that they can only keep if others help pay for it? Why do we have to save the institutions that lent to them? “They” say they need one trillion dollars or more of my money to bail out a lot of people. Why on earth do I have to give my hard-earned money to irresponsible people? The thought is making me very angry.

(More in the article link above the quote)

Toxic Anger 2: Getting Angrier and Ron Paul’s Cures

Recently I wrote an article titled Toxic Anger about the mortgage crisis and how it now seems that many hard-working Americans will be forced by the government to pay for people who live in foreclosed homes to keep their homes. Well, the situation has not gotten any better.

More injustices abound. It seems that we, the people who work hard, the responsible, are being forced by the government to support the following irresponsible, gambled and lost, groups:

We, the people, have already bailed out nine Wall Street banks who are thinking about using $108 billion dollars of the recent $125 billion taken from us by the government to give to employees as bonuses. In fairness, many of these employees’ compensation packages are bonus driven and people are saying these folks should not work for free, but if your company went bankrupt and had to get stolen money to keep going, do you still deserve that money? After all, it is not coming from the company anymore.

We, the people, are supposed to bail out additional homeowners in expensive neighborhoods who can pay their mortgages just fine, but are learning the value in being a looter and are now ceasing to make their payments. They have learned that is better to be a looter so they too can be in foreclosure and get a better mortgage on their home. (Sorry I don’t have a link for this, but I heard it on 11/6/08 on CNBC.)

We, the people, are now supposed to bail out the auto industry and the United Auto Workers Union because although these companies are not profitable, we need them to stay in business and keep losing money. President elect Obama has promised $50 billion of our dollars to keep them in business. (Although how long they will stay is business is questionable since both GM and Ford posted losses of more than $27 billion in the first half of 2008 alone).

In addition, hedge funds, the insurance industry and others are all looking to get some of our money. Daily, more people fall into the looting category and fewer feel the desire to remain producers. Ayn Rand predicted this over fifty years ago in her brilliant book Atlas Shrugged. A must read for all these days.

We are told we need to give these folks money because they are “too important to fail.” Here is a nice little article about past industries that did not get bailed out and as a result they brought the calamity of lost jobs. These companies included the typewriter industry, hoop skirt manufactures, and the enormous horse and buggy carriage industry that took with it stagecoach drivers, wheelwrights, and blacksmiths, as well as those darned buggy whip manufacturers.

Okay, so by now you are angry: Really, really angry. If you are like many Americans, this year you saw your home lose as much as 50% and many portfolios are down 60%. Even if you live in a tiny apartment in New York City and don’t have a dime to your name, you have seen food and fuel prices go up like never before. We are all paying for this in some form. You now understand that all of these bailouts are coming from you and you don’t like it. What can you do?

(More in the article link above the quote)

Ron Paul has the answers but no one is listening.

Ron Paul’s answers wouldn’t be any easier than the current (I guess you can call it a) plan, but Ron Paul’s answers are based on sound Austrian Economics, and Ron Paul’s answers would be a wiser move for the future where we would not be beholden to central banks and a growing, no freight train of growth of the national debt in the wake of this stupidity.

As a commercial says, “What’s in your wallet.” Or maybe a more important question, how much is it worth?

And with winter approaching (and already here for some places), one has to think hard about this:

Inflation 1923–24: a woman feeds her tiled stove with money. At the time, burning money was less expensive than buying firewood.

The wikipedia entry above called Inflation in the Weimar Republic says:

John Maynard Keynes described the situation in The Economic Consequences of the Peace: “The inflationism of the currency systems of Europe has proceeded to extraordinary lengths. The various belligerent Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they required, have printed notes for the balance.”

Sound familiar?