A TRILLION HERE A TRILLION THERE.....!

Hi All,
One of the privileges of founding a Channel such as this BLOG is that I get to rant from time to time on matters that, in my humble opinion, I consider important. I am sorry if I tax the patience of our readers.

Whether you have noticed or not, the greatest drama in the History of the Republic is playing out on the Global Stage. This drama poses a threat to our National Security as great as any in our short history as a Nation.

Egregiously bad judgment by our National leaders fostered over time, through the legislative process, the concept that Americans could have anything they wanted; regardless of their ability to pay for it.

This absurd idea lead to a phalanx of rapacious Bankers and Money Brokers concocting the most arcane financial instruments in the history of man.

Mortgages with no documentation or Liar Loans have led to the meltdown of the greatest financial institutions and the melting away of many retirement accounts, we have yet to gauge the full extent of this erosion of value.

Tonight, the Senate passed the so called Bailout legislation I watched the debate and vote with horror; if the House follows suit, I say to you all it will constitute the greatest error in a long history Government overstepping their brief. The potential approaches for the actual failure of the Federal Full Faith and Credit Balance Sheet, with consequences to hideous to contemplate.

Rumor has it that former US Congressman Everett Dirksen once quipped "… a billion here, a billion there, and pretty soon you are talking about some real money." In the last few years we've upped the ante. Now it's a trillion here, a trillion there — on the Wall Street Bailout, on the Iraq War, for instance. It looks like the NeoCons have at least insured that the government will be squeezed in times to come. Their dark dream of Starving the Beast, however, is not a short-term outcome. It looks like the US government is getting ever-more-powerful by the day and by the year, in both military and financial arenas. Or maybe that was their real dream after all. Sad but likely true: Too few NeoCons will go to jail. Too many of the rest of us will suffer.

The Fed has taken on the following obligations to name a few:

Overnight loan for JP Morgan to take over Bear Stearns

parenthetically, this bears comparison to the 1907 bailout organized by The John Pierpont Morgan, which saved the National banking system. That event pales to insignificance compared to the current debacle.

Nationalization of Freddie Mac

Nationalization of Fannie Mae

These two in aggregate account for 50% of all mortgages in the United States.

Overt nationalisation (for 2 years) by granting an 11% interest loan to AIG on condition that AIG surrender 79.999999% of its stock in the conglomerate to the Federal Reserve as collateral, in effect giving the Federal Reserve Bank of New York complete control over the corporation.

The Fed's balance sheet has been taking on huge amount of (worthless) new assets and given away tons of cash on loan -- and we just KNOW how well Wall Street types are at paying back their obligations.

The US Treasury authorizes a flood of Sovereign Bonds [US bonds that foreigners buy] and T-Bills to prop up the cash at Treasury, which will be given over to the central bank to replenish funds.

This means all the bad debt that these idiots have created is now riding on the full faith and credit of the United States of America.

Here's what the potential effects are:

1. The ability of the US to repay its debts, which has never been doubted since the beginning of the Republic ... is now put to question.

2. Foreign governments will get skittish about lending the United States money.

3. While the risk of Depression-era deflation is avoided, the risk of Zimbabwe and Argentina style hyperinflation now becomes very real. If this happens, then the value of money itself will become meaningless.

In the Fog of War flow of all of these events, the National debt has surpassed Ten Trillion dollars!!

10,000,000,000,000 dollars in debt!

Will the current generation of Americans repay that? No, the current generation seems determined to go even deeper in debt.

So, that means that Americans are dumping this debt on to their children and their grandchildren and to generations beyond that.

What America has done is they have sold their children and grandchildren into economic slavery ostensibly forever.

How would you feel if you were a little child and you discovered that your parents had left you with a debt that you could never, ever repay and that you would be making interest payments on for the rest of your life?

America's children and grandchildren will ALL be working all of their lives to pay interest on this ridiculous debt. Their labor will go into serving the owners of this debt, and there is no escape.

Having some experience in the field of National Security, permit me to opine on the worst case scenario in the current environment; as the debt builds, and inflation spirals, and confidence continues to wane; as the dow volatility and steady downward delta further erodes investor equity, some strange events ensue:

1) Runs on banks
2) Money becomes worthless
3) Investment dries up
4) Fuel costs escalate
5) Transportation and public utilities fail
6) Increased acquisition of weapons
7) Food riots
8) Civil Insurection
9) Rogue Militia bands run rampant
9) Tanks in the streets
.
.
.
Don't imagine for a minute that "It can't happen here"

High technology based societies, such as ours, do not degrade gracefully under this sort of stress; they tend to collapse catastrophically, quite literally back to the stone age in a very short time, and this process feeds on itself and advances exponentially.

I pray daily that I am wrong and this crisis resolves for the best, but I have great doubts.

Dave Israel
__________________