Look Into The Future. What Do You See?

Every action has an equal and opposite reaction. That is what we were taught in high school mathematics and attributed to Sir Issac Newton and his laws of motion. This physics lesson also is in play in financial markets where we may see action and reaction regarding the days news. And if it seems that a financial tsunami is churning towards the worlds markets, you would be correct. Our governments have created most of this mess through manipulating laws and bailing out the TBTF banks and Financial institutions for the last 40 years and now it is becoming obvious to those who are willing to look beyond the "hopium" the media pours out to the public on a daily basis. Kicking the can down the road is the game our politicians play, whether it is Social Security, Medicare, Fannie & Freddie, etc. They cover up mistakes and corruption and put a band aid on the problem and pass it down the road to the next guy. So we find ourselves in a worsening storm and our governments scramble about, as their currency meltdown (Fiat Crisis) expand beyond their shores. Their solution? They are trying to bail cash back into the system by inflating (printing) their currencies which is a huge hidden tax on you!  And yet most slumber, oblivious to the crushing wave heading towards your shores. These obvious attempts to stem the tide of the financial crisis doesn't take into account the hidden consequences their actions create.

William Buckler of the Privateer explains this spot on:

This is, and always has been, the central problem of what is called “political economy”. It was the title of the first “chapter” of Frederic Bastiat’s justly celebrated Selected Essays in Political Economy. The entire problem, never so topical as it is today, is contained in the first two paragraphs of that essay - written 170 years ago. We quote M Bastiat: “In the economic sphere an act, ...a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.” “There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen. Yet this difference is tremendous...” The size of the difference can be seen today wherever you look in the global economy. What is seen - indeed what is being screamed from the rooftops - is the alleged necessity to rescue the global economy by pumping ever greater quantities of “money” into it. What is not seen - or is avoided, evaded or is kept out of the gaze of potentially prying eyes - is that it is the process of pumping new “money” into the economy that caused the problem in the first place.

© 2011 - The Privateer

http://www.the-privateer.com

capt@the-privateer.com

(reproduced with permission)

This is exactly the law of unintended consequences, or is it? In America, our Central Bank, The Federal Reserve is a private bank that regulates the banking business in America, and after this weeks bailout of Europe's banks, perhaps the world. Remember, The Fed is private, yet they control America's banks and monetary system. Is the crisis's we are sailing into and the Crash of 2008, incidents that, as economist's claim, "no one saw coming" or part of economic cronyism that is raping the American public daily? How can I saw that?  Look at MF Global and the Ex Governor of new Jersey, John Corzine, who "just doesn't know what happened" to the $ 1.2 billion of client funds that were looted, er, lost. Can't find it. Look at US Banks, they have reported the highest profits they have seen in the last four years since 2007. Why? Because of artificially low interest rates, they aren't paying depositors any interest  and are leveraging the free money. This scheme is imploding Euroland banking and may make an appearance here in the USA sooner than later. At some point, the costs to pay for the debts will explode as interest rates, which is the cost of the money lent plus the risk factor of bankruptcy, will rise and wipe out all of the fiat currencies in the western world.  It seems that the can can not be kicked much further. Yet CNBC, leading economists like Paul Krugman and our politicians refuse to acknowledge the problem, while espousing fiscal hopium. 

It is all a lie.

Things will not get better. They will get worse. We as a nation must cut our spending by 50% right now just to start being fiscally responsible.

We will not do it.  Too many people rely on government handouts to survive. We have almost 50 million Americans receiving food stamps alone! Americans are trying to survive on 99 weeks of unemployment without finding a job. The military will not cut their budget by 50%, Medicare and Medicaid will not cut their budgets by 50% either. The outrage, wrath and ire from  Americans on the government dole would send our politicians scurrying like cockroaches in the light. They know they won't get reelected if they even  honestly acknowledge the looming problem.

It is coming people. Starting in March of 2012 and  exploding in January of 2013. In January of 2013, we have major financial changes headed our way.    Some of the highlights include...

The Bush tax cuts expire on those making more than $ 200k.

The Bush tax cuts on those making less than $ 200k will also expire.

2013 is the first year that there will be mandatory caps on discretionary spending.

The patch on AMT will expire.

Social programs, like Social Security & Medicare will be seriously sloshing in debt that can't be ignored.

So here we are...the hard unvarnished truth and sure to follow, devastating fiscal consequences to the average American.