Black Hole Event Horizon- the Fed

[soryang]

I heard an astronomer talking about this the other day and realized that this is what we are looking at with the Fed. Thom Hartman ran a tape of the interview of the Inspector General at the Fed on his show either today or yesterday and then had the brilliant economist from the Univ of Missouri Michael Hudson comment on it. Hudson characterizes our retrograde economics as a return to a feudal rentier society.

The United States is bankrupt.

Repeat: The United States is bankrupt.

It started with free trade, globalism and the dogmatic export of real capital to Mexico and the Far East. Real capital is the means of production. What we were left with was finance capital and impending economic implosion. What to do? Sell collateralized debt obligations to our new creditors to cover the black hole of balance of payments deficit. One problem though, cdo's arent really collateralized so sell fraudulent insurance contracts with them called credit default swaps. Another problem, CDS's aren't covered by financial reserves, they are in fact fraudulent promises to pay. When Lehman and Bear Stearns imploded, everyone found this out. In order to avoid crossing the event horizon into the black hole of total financial collapse, Wall Street in the form of Paulson and Geithner put the Treasury and the taxpayer on the hook for the entire debacle.

Currently we are on the event horizon about to plunge into the abyss. Any investigation of these events would necessarily result in indictments and prison sentences for the Masters of the Universe in the investment banks and mortgage resale markets. This cannot happen under any circumstances because it would result in social and political revolution. Our armies would have to be withdrawn from Asia the collapse would be so devastating.

This is why the Fed cannot answer any pertinent questions and why the Fed is being given regulatory powers to regulate itself. No oversight wanted.

[OmahaBlueDog]

1. Black hole seems a bit of an overstatement

First, let's just say the US is bankrupt. As we've seen -- there's bankrupt and there's bankrupt. We still have substantial assets and cashflow. Were we a company, we'd likely reorganize.

Second, Argentina went bankrupt; life went on. The Soviet Union went bankrupt; life went on. Not every financial catastrophe is Weimar or Zimbabwe.

[soryang]

2. We're still outside the event horizon

...mostly due to the Secrets of the Temple defense, namely stonewalling inquiry and reform. This is a temporary condition only.

[piedmont]

3. oh. noes. we're. doomed. halp!!

:eyes:

[Birthmark]

4. Well, there's three minutes of my life wasted.

[TexasObserver]

5. The US is not bankrupt, or even remotely close to being bankrupt.

Lose the astronomic metaphor. It's not close to accurate.

We are bottoming out from a huge economic decline, one in which all the air pumped into the economy in the Bush administration is being let out. We're nowhere close to being unable to pay the debt service of the US. If we get anywhere close to being bankrupt, I'll let you know.