What Comes Next?

Thoughts from the first week of the Obama Presidency

That the left in America isn’t nearly as gracious as the right. The shoe throwing party just before inauguration day was shameful. I think that’s because essentially, Americans are conservatives who punish the Republicans for letting us down, and liberals have to be excessive in their opposition because that’s the foundation of their existence.

Traditionally, we respect the Constitution, but when frustrated, overcompensate in our disappointment and elect liberals. We were so satisfied and successful with Ronald Reagan, we let our guard down and let his VP, George H. W. Bush move up a notch. Bad decision. Our disappointment in the elder Bush resulted in Bill Clinton’s election. The Junior Bush’s two-time failure has resulted in the most wicked political swing ever.

As politicians go, Obama is probably as honest as any of them. Certainly, he’s a better man than the likes of Christopher Dodd or Barney Frank, or the horrifying Tom Daschle. I think he’ll find that if he plays honestly, he’ll find much more stalwart friends in Republicans like Richard Lugar than the morally and politically corrupt hacks like those mentioned above. Keep them close, Mr. President, because ultimately, they are your (and the American people’s) enemy.

I had hoped that Obama would shock us all and call Ron Paul to the White House and ask for help with the economy. But no, his political machine is intoxicated with painting him as a modern day FDR, not because Roosevelt saved us from economic ruin, but because many people today think he did. The truth of the matter is, FDR’s programs deepened and extended the Great Depression, and then goaded the Japanese into attacking us and drawing us into World War II. FDR killed many times the number of people George W. Bush did. WWII ended the Great Depression, at the cost of over 400,000 American lives.

As Obama follows the path of FDR, massive government spending for infrastructure, then war, what will the total be? Last time, the biggest weapon that could be used against us was a 1,000 pound dumb bomb dropped from an airplane. This time? Nuclear or  biological agents capable of killing hundreds of thousands could be deployed by single combatants.

What this means.

The route we’re taking shows no sign of changing. Over a Trillion dollars have been pumped into the black hole of this economic meltdown, to no effect. Every single dollar printed and injected into the system will eventually show up in the form of inflation. The $825 Billion stimulus package the new President is pushing will pump another huge glob of currency into that black hole. Notice, that I said “currency” instead of “money.” The paper our Government is printing isn’t money, it’s claim against that wealth, making each note or credit in a bank account, worth less.

WCN.net isn’t investment advice, and you shouldn’t use it as such, but I’m happy to share my plans and strategies with my readers. I’m continuing to invest in metals (Gold, Silver), and stock up on food and water.

Things are not getting better. They will continue to get worse. Protect yourself and your family.

Back From A Break

It’s been quite a long gap in posting, but for good reason, I think. My family, for the first time in many years, took a long holiday break from work and school. Though I had every intention of “working” on WCN.net while away (it’s more a labor of love and concern than true “work”) I decided a couple days into the vacation to consider it work and stay away from it. That, in my opinion, was a good decision, as it allowed me to soak in some life, recharge, and watch the world more as a participant than as an observer. I believe the insight I gained from this helped me better understand what’s going on, and it gave me some ideas to share with you in the coming weeks.

Once I got back to the “business” of WCN, I saw some things that need to change with the site. You’ll start to see some of those changes gradually over the next month. The big change is of perspective. It occured to me that this site has been mostly about the possible branches on the path that our economy and resulting society could travel. WCN.net is going to start being more about the path we’re on and what you can do to survive, thrive and be successful in our new world. Make no mistake, we are in a world that’s much different than the one we were living in 2 years ago.

We are living through a societal paradigm shift that is changing almost everything about the way we live in the U.S. Part of that paradigm shift is that sites like WCN.net, Kunstler.com, Financial Armageddon, When Giants Fall, WorldNetDaily, Urban Survival and others are “suddenly” seem less directed at the “paranoid fringe” and more for everyone. Those sites mentioned haven’t changed their direction, many people are simply seeing the light. Events have played out in ways the writers and editors of those sites (and many more, by the way) predicted. Those who previously scoffed are now getting it, and in many cases, preaching the gospel of dramatic change.

The tenor of WCN.net won’t change. The changes I’ve been writing about for a couple years now are happening, and instead of engaging in the tempting “I told you so” that would be easy to write, I’m going to transition to writing more about what preparations and activities could help ensure survival and success in these difficult times.

Get Ready for MUCH More of This

Republic Windows and Doors, like a lot of companies around the world, ran out of money, and had to close up shop. Naturally, the (union) workers there are angry, probably even more angry than if they’d been asked to take pay cuts. So, rather than leave, they’re occupying the plant, demanding the severance and benefits they say they’ve earned.

President-elect Obama says they are “absolutely right” to do this. Interesting choice of words for a President-to-be, who is the chief enforcer of laws in the U.S. They are absolutely right to do this? Does he realize just how many more of these situations he’s going to face in his single term, especially since he is throwing his support to the movement?

Here’s the story.

The most interesting and telling part though, is this:

One of the factory’s workers, Silvia Mazon, said in Spanish that she needs the money owed to her for an $1,800 monthly house payment. The 40-year-old from Cicero said she has enough money saved to survive for one month.

“We’re making history,” she said.

An apparently Spanish-only speaker, working in a factory in Chicago with only a single month’s savings and her house payment is $1,800?

This, is why the work of James Kunstler, George Ure, Michael Panzer and others, is so important. This situation is going to get worse. Much worse, and there will be a huge number of people like the unfortunate Ms. Mazon, who were participating in an economic model they thought was never-ending. One where real estate always rose in value, there were always blue collar jobs available, and new cars and plasma tvs grew on trees. Unfortunately, these assumptions were wrong, and those who didn’t understand that will be hungry, moneyless and angry.

Have you thought about what you will do then?

Morons Leading

First of all, let me state my opinion.

Christopher Dodd is the worst kind of leader we could possibly have. What kind of chump takes a “sweetheart deal” from Countryside when he oversees that industry’s regulation (or lack thereof)? I know, I know, that’s the whole POINT of getting elected to Congress, to feed at the trough of graft. I get that. But, jeesh, Chris. Be a little more shamed, would you?

Now, he’s calling for the resignation of the head of GM as a condition of bailout.

Okay. Dodd and Obama say things like Obama did on TV today:

“The big three U.S. automakers have made repeated strategic mistakes,” Obama said. “They have not managed that industry the way they should have.” Any financial aid must be “conditioned on them making significant adjustments.”

Is he kidding? What business has he or Dodd ever run that he can make statements like that? Where did these geniuses, almost all of them in Congress there because they couldn’t make the kind of living they can get stealing from the taxpayers, relying on their business acumen or hard work in the private sector, get their business savvy?

What business do they have telling anybody anything? Wasn’t Dodd part of the oversight of the financial industry (hence, the kickbacks and sweetheart mortgages he got) that is melting down? Wasn’t he talking about how healthy it was when there were those ringing alarms about Fannie and Freddie, only to be beaten down and called idiots for their opinions that we were heading for disaster?

Christopher Dodd is a failed regulator, and should be given no oversight of anything more important than a mop, but I’m sure he’d screw that up as well.

Amazing.

The TARP Has Failed

Predictably, the bailout has failed.

The Cutting Edge lays out the promises made, none of which have been kept. Treasury Secretary Henry Paulson, who should be held accountable for the fiasco he has needlessly piled onto the fiasco that this government’s economic policy has helped create, is apparently, as the site says “winging it.”

By any reasonable assessment, the Troubled Asset Relief Program has been a miserable failure and a complete waste of taxpayer money. The basis used to ram the bill through Congress was the purchase of the toxic assets off of bank’s books. Not one dollar has been used for this purpose. The main purpose for passing the $700 billion bailout was to restore confidence in the markets.

On October 3 when the TARP was signed into law, the S&P 500 was at 1,114. Today, it is 887. The 20 percent decline in the markets in six weeks doesn’t show much confidence in Paulson’s acts. Paulson changing course every few days has shown the world that he is “winging it.” He has floundered from buying toxic assets to jamming capital down the throats of banks to his current plan to support consumer debt. Did Paulson lie to Congress about buying toxic assets?

Paulson has handed out a grand total of $310 billion of the initial $350 billion tranche. He would have to go back to Congress for the 2nd $350 billion tranche. Congress was supposed to create a five-member congressional oversight panel, but hasn’t. The White House was supposed to nominate, and the Senate was supposed to confirm a special inspector general to audit and investigate where the funds are going. After six weeks, President Bush hasn’t proffered a nomination.

Poorly run automakers (GM, Ford, Chrysler), poorly run cities (Atlanta, Philadelphia, Detroit, and Phoenix), and poorly run states (California) are begging for a piece of the pie. The banks that received the first $179 billion have not made any loans with the special money. Indeed, some are using the money to buy other banks. It appears their goal is to become “too big to fail.” Others, like Citigroup, are using the money to buy back bad assets from off the balance sheet SIVs they created. SIVs are the “structured investment vehicle” instruments that Citibank invented in 1988 to become part of its so-called “shadow banking” system. The solvency of the SIV world is now in question.

Hence, TARP has failed.

But then again, maybe not. The TARP has obviously failed to do what we were told it would do, but were we told the truth about its purpose?

I don’t think so.

I believe the TARP may have been intended to provide a huge pile of cash to do two things:

1. Rescue the Wall Street gamblers who created this mess and who are in bed with the regulators. Remember, Paulson worked on Wall Street, so his buddies are his “skin in the game.” Also, remember the corruption that runs rampant through Washington, DC, like Christopher Dodd’s sweetheart loans from Countryside – he’s the head regulator of that industry in Congress now.

2. Keep the stock market bouncing around, and up occasionally, while the Bush Administration is still in the White House. Many think a group funded by Paulson’s TARP money is the entity creating these end of day rallies that in the last half hour of trading, prop up the DOW. Once the money (and the Bush Administration) is gone, these “economic commandos” will disburse, and a massive crash could occur.

At least that’s the theory.