The fit is just beginning to hit the shan. Two pseudo-private companies, Freddie Mac and Fannie Mae, are wobbling a bit. Teetering a little. Standing on the brink and realizing the drop is pretty far. Washington is in a tizzy. This is what happens when you have a monetary system that is faith based. Fiat currency, baby.
So what are our overlords doing to fix the cracks in the faith based dam that holds back the tide of easy living debt America has amassed and is now having a hard time paying back?
At the core of those proposals, as outlined by Paulson, is a request that Congress grant Treasury a temporary increase in the credit line it can extend to the GSEs, as well as the ability to purchase equity in the firms should that prove necessary. The moves are designed to reassure bond and stock investors that Fannie and Freddie will have both the liquidity and the capital needed to weather the current crisis, key to getting the markets, and ultimately the economy, back on track. With the Treasury proposal in the works, the Fed also agreed to temporarily grant the GSEs access to the Fed’s discount window, should they need emergency liquidity before Congress can authorize the Treasury moves. “The GSEs now touch 70% of new mortgages and represent the only functioning secondary mortgage market,” Paulson told the senators. “The GSEs are central to the availability of housing finance, which will determine the pace at which we emerge from this housing correction.”
I don’t want to be a fear monger, but I’ve lived lots of places around the world. When the money becomes worthless the new currency is always bullets. I’m not saying that’s where we are at. I’m just saying it could happen, and it could happen in a few months, a few years or a few decades. If we continue borrowing it will happen. And lots and lots of people will suffer needless misery. Are you paying attention?
What kind of government forces people to make gasoline out of food, artificially boosts the price of corn to $6 a bushel, guarantees that inflated price as the “base” for higher federal subsidies to corn farmers in the future, and then tries to hide its own depredations by excluding high food prices from its measure of “core” inflation?
The money is all made up. The real debt is being fudged every year. Your children may be learning something in their public high school. I don’t know what, but I’m damn sure it isn’t economics. And that’s why Fannie Mae and Freddie Mac are teeter tottering on the brink. How many bail outs later will those fools on the hill realize the nation has no more credit left? When will you start sounding off and telling them to stop the bailouts because we cannot afford them?