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pywong
15th October 2008, 07:38 AM
It is in the nature of politicians to acquire more power for themselves. Some do it for altruistic reasons - they want to do good for the community. But most do it for selfish and evil reasons. As a general rule, we cannot trust politicians with power. There must be in place checks and balances to ensure that politicians do not go overboard. Hence the importance of a two-party system. Even then, it is not enough. What happens if the two parties collaborate together, like what is happening in the US?

We see in the recent actions by the US Senate and Congress to approve the Emergency Economic Stabilization Act (AKA Paulson Bailout) despite overwhelming objections from the citizens, as a case in point. Here, the politicians are using a financial crisis (which they had a big part in creating) to grab more power.

A similar act followed 911 when a few planes were hijacked and were used to divebomb the World Trade Centre and the Pentagon.

Here is Bill Bonner's (of the Daily Reckoning) take on the recent actions by the Central Banks to stem the contagion of the crisis:

Governments are using this financial meltdown in the same way they used the meltdown of the twin towers in 2001 – to grab a little more power. The dumb fist of politics now pushes aside the greedy little ‘invisible’ hand of Mr. Market. Subtle swindles give way to heavy-handed larceny.

Whatever happens, now the financial industry will have to stand in line for pat-downs and strip searches. More people of low intelligence and low self-esteem will find employment protecting the homeland’s financial security. And those who didst ride so high on Wall Street will lie in the dust of Congressional hearings...or lie low in some offshore hideaway. We take all that – as nasty as it is -- for granted.

But the second part of the bunkum is probably dead wrong. Government control of an economy has never led to stability or prosperity. In fact, the record is fairly clear – the more the state meddles, the worse the economic results. In extreme cases, such as the Soviet’s 70-year experiment with a command economy, the results were so spectacularly bad that – at the end of it – Soviet industry had become ‘value subtracting.’ That is, it mobilized an entire economy to extract valuable resources...to ship them... to refine and process them...and to turn them into finished goods. And at the end of the day, the finished products were so badly made and so out-of-touch with what the market wanted that they were worth less than the resources that went into them!

No one is planning to recreate the Soviet system. Instead, they’re thinking that maybe a little political supervision would be a good thing.

Always keep in mind:

1. Government have no business to be in business, other than in the business of defence, public service or essential utilities like posts, water, sewage, telecommunications, power and transport. Other than that, they should keep their nose out of our lives.

2. Politicians cannot be trusted with power. I have not met one who went into politics for his health. If, we the people, do not put in the effort to monitor and control them, then we deserve to be short-changed.

pywong
15th October 2008, 07:45 AM
Oh, Say, Can You Still See? Part 15: The Crooks Love a Crisis

Posted by Russell McDougal on 10/1/2008

You have been robbed blind. I have repeatedly warned that a power grab has been in the works during the present financial chaos. More authority is now being given to the specific entities that caused our present financial and economic problems. Beware.

There has never been, in US history, a more challenging time to be a financial editor. It is a humbling responsibility. A clear 98 percent of those who attempt to explain what is going on will be dead wrong. Negotiating this mine field is a major challenge. Truth be told, things are happening so quickly that this missive is being sent as close to deadline as possible. The gory details of this historic bailout will be analyzed in the coming weeks.

This long series was designed to demonstrate the inherent dishonesty in our money and our markets. Enron was not an anomaly! Enron, Fannie and Freddie, Merrill Lynch, AIG, Bear Stearns, Lehman Brothers remain the status quo though they have been banished or thrashed.

The job of government is to provide honest money and a level playing field in the markets. Oops! There is no Constitutional mandate to bail out reckless crooks.

....we face:

1. Nationalization of Freddie and Fannie
2. Rescue of money market funds
3. Mortgage bailout to banks to the tune of $700 billion proposed
4. AIG bailout
5. FDIC bailout
6. Foreign holders of US originated toxic entities are being bailed out
7. Wamu taken over by JPMorgan to avoid impacting limited FDIC funds
8. A continuing cascade of failing derivatives

..... * There is a clause that states stock accounts can be attached by failing brokerage accounts. That would be your stocks getting raided.
* Congressional oversight is bypassed with this legislation and Wall Street gets even more power.
* The planned legislation is to be passed without assigning blame. Nice try.
* Paulson’s old firm, Goldman Sachs, is set up to receive whatever valuable assets come from this shake out. Paulson is personally exempt from civil or criminal liability through this presented plan. Hello.
* Fraudulent actions by AIG and other fascist (government connected corporations) entities never see the light of day.
* The remaining institutions like Morgan Stanley, JP Morgan and Goldman Sachs have consolidated power and are free to continue fraudulent actions. The games continue.

Nothing is being reformed! The day of reckoning is merely postponed.

Who are the losers in this scenario?

1. Taxpayers
2. Homeowners… little to no relief here
3. Anyone who holds US Treasuries or the US dollar. Both domestic and foreign holders will get hosed.
4. The US economy has to absorb these excesses
5. Anyone who deals with increased banking and financial fees in the coming decade

Who are the winners?

1. The fraudulent status quo (Fed, White House Puppets, Congress and corporate friends)
2. Irresponsible banks and financial players who brought forth toxic products that caused this mess
3. Hedge funds and derivative traders

Read more for whole article and to follow the earlier series.... http://www.investorsdailyedge.com/article.aspx?id=1110