Thursday, March 20

Steer's, money and the golden calf

I don't know what comes first.
Went down with my truck to pick up a pack of cigarettes this evening and spotted an injured calf around the corner from my place. It was just lying there in the mud, helpless to move itself to the barn. I stopped and talked to the animal, trying to shoo it away, out of the nasty cold rain. It didn't move. Well it did. It got up and walked three steps, then collapsed again.

Today I was also pondering about the US economy. Banks and credit institutions have given loans to borrowers who have no money, except the assets they speculate on. The point is, those assets are not theirs. They are pebbles, framed on the prognosis of endless growth, your typical capitalistic frame of operandi.
Guess what, the US economy is in as bad of a shape as the calf I encountered on my after dinner mission. What I find amusing (or not), is the fact that the government is trying to bail out companies who have slandered their assets without second thoughts, all in the name to "recover the economy". Now, what is that supposed to mean? I truly believed until now, that we live in a Darwinists capitalist society, where the stronger of all will survive. I guess that is not so. There must be a hidden agenda I do not comprehend.
So the fifth largest trading company on the New York stock exchange the other day got bought up for a song by J.P. Morgan & Chase and on top of it the government pays half of the bill? Wait a minute, something is not quite right here. The culprits who speculated to own the golden calf ... and lost, now get MY (the taxpayers) money to continue their atrocities? I thought this was a straight forward game. The one who looses bites the dust. But no, the US Bush gang has to swagger and become socialists at convenience and pump in money they don't even have in the the first place in the name of supporting global cooperations, their buddy's per say. In the mean time the common man has no clue and lends his or hers millions of hours of labor and income to a cause that has no benefit to him at all.

What is a trillion? I don't know, I have never seen one. The only thing I know, is that the US government has accumulated a debt during the Bush era that has arisen to astronomical figures. It doesn't help to have a war either, who drains 16 billion a month and then ended up to be almost a 500 billion on this five year anniversary of insanity. (is that half a trillion?)

All I am trying to say is, the US is broke and the rest of the world is reacting accordingly. What escapes my good will of empathy is, that hardly any citizen in the US is concerned about this. This is like sleepwalking while being secretly drained of all life resources.

So much for the "golden calf rant".

After I picked up those nasty things that create blue smoke, I still worried about the young steer and stopped again on my way home. No change in the situation.
Finally I found out the farmers number and I made my call.

I wish I could do the same and call to the US government and warn them about the "golden calf", before it is too late -

...but I lost that number in the pile of mess abound.

pictures later, OK?


♥nova-san said...

I think that many U.S. Citizens are concerned with our falling economy. Sleepwalking may not exactly be the right word. I think it's just that many of us feel helpless. How do we, as individuals, help to steer the economy in the right direction? It's frustrating. Because even after Dubya is out of Office, whomever takes office after him can't turn things around fast enough for anyone to see an immediate difference. It will take years. It's going to be a long winter.

Cym said...
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lindsaylobe said...

Don’t despair, Fed chairmen Dr Benn Bernanke has provided $400 billion in facilities through the Fed,tightened prudential standards and 15 large companies are being investigated for fraud and trading breaches.

Bernanke I think temporarily didn’t have much choice, faced with the 2 undesirables.
He took what he thought was the the lesser evil, to ensure depositors didn’t get hurt.

I agree with him,but I hope also there are prosecutions for those involved in this fiasco.

Apart from the horrendous banking and securities sector woes, a falling dollar, ballooning foreign debt, reliance on foreign oil supplies, future high inflation and a horrendous unsustainable fiscal deficit, it is not all bad news. The US still has some great assets, primarily being its people and some of its great old Institutions which are world leaders.

Its not to late to bring things back into balance, and clear the decks of $600Billion in sub prime losses, excesses in govt spending on the war etc;

it was just 10 years ago the US budget was in surplus although It must now seem like an eternity.

And when you do,you most certainly won’t need to bail out a Stearns for fear the whole economy will collapse in fright.

As Nova said, it will just take a long time.

Best wishes

Anonymous said...

Hello, Zee.
I was watching some fellow on The News Hour the other night saying that it was in the national interest for the taxpayers to shoulder the burden to ensure the solvency of the financial sector.

And as Lindsay noted, I thought it would be in the national interest if the main culprits were to spend a few years behind bars for their misdeeds.

Projections show that the national debt will be terribly close to 10 trillion by the time Geo. Bush leaves office.
The good news is that the value of the dollar makes that figure much, much less.

Cym said...
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lindsaylobe said...

Cym ~I have noticed a number of Bloggers make this comment about the Fed being privately owned which I think may arises because public commentators are either being taken out of context or simply don’t understand fully its operation.

The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution.

It’s very similar to many central banks that operate throughout the world, such as our Reserve Bank of Australia or the Bank of England and so on.

They are all charged with the responsibility of monetary policy which determines inflation, they strongly influence interest rates and act to stabilize and assist the financial system, especially when it is in crisis.

Thus It could be regarded is an independent entity within the government, incorporating both public purposes and private aspects.

The Federal Reserve derives its authority from the U.S. Congress.

It is independent since its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of your government.

It does not need to receive funding appropriated by Congress, and its members, (called the Board of Governors) occupy terms which span multiple presidential and congressional terms.

However you’re Federal Reserve is subject to review and oversight by your Congress, but its responsibilities can only be changed by statute.

Your 12 regional Federal Reserve Banks, established by Congress act as operating arms of your central banking system, may seem like private corporations--possibly leading to the confusion about "ownership." Eg shares of stock are issued to member banks.

However, owning Reserve Bank stock is quite different from owning stock in a private company.

Reserve Banks do not operate for profit, and such ownership of designated amount of stock is simply a condition of membership in the System, to afford the availability to apply to the lender of the last resort( Reserve). This stock may not be sold or traded in any way, or even pledged as security for a loan; dividends are, by law, 6 percent per year.

The Federal Reserve did but creates the current problem in sub prime mortgages; although some feel they need not have bailed out Sears and it could be said loose monetary policy has not helped.
However the $400 billion was made available at interest rates to banks because banks had lost trust in one another and they could not obtain funding from their traditional sources.

Bernanke and the Reserve Governors were worried about the possibility of a mammoth credit crunch, even a great depression, hence they made the loans in exchange for securities which they took from the banks as collateral.

The same thing happened on a smaller scale throughout the western world, as the contagion from the sub prime fiasco in the US spread its misery.

All Central banks act as lender of the last resort in this manner. The Reserve is involved in open market operations and earns a surplus each year, just as does all Central Banks. Last year your Federal Reserve returned 35Billion to the government at the ends of its year, our Reserve bank made about 5 billion and so on.

I don’t think it’s likely they will lose any of the $400 billion( which is real enough) since they have taken the better quality securities and discounted them as collateral from the borrowers.

I could go on further, but in sure you can find ample economic commentators or professors who will confirm what I have said and explain its workings in more detail, much better then me should it be of any interest.

Bernanke did his PHD on the economic situations that predicated the great depression, so I think he is aware of the risks.

Best wishes.

Zee said...

Thank you Lindsay for the in debth comment, a true eye-opener.
Nova-San, I can assure you that whoever takes office after the next election, it will be a mess. I still subscribe to though that citizens of the United States (and perhaps elsewhere) tend to move like cattle, slow and without concise aim. Helplessness is one of the results.
I agree with you Cym, local sustainability is key and you can't worship two opposing entities (gods) simultaneously. That's the downfall.
Progressive Trad,
the "good news" of the fainting Dollar is "mixed news". First time I came to the US as a teen the $ was worth four times more to the Swiss Franken or the German Mark, roughly. Without being or pretending to be a specialist on these matters, the imagery of recent developments do leave an impression. Basically the US has lost it's production and buying power by over 400% within twenty five years. That's an awful lot of demise, and if you add and count to it the present deficit, it looks terrible.

Is there hope? Yes it is!
The golden calf will be starved, then a new area will come about.
Trees will remain standing.

Cym said...
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Cym said...


Did you or anyone else here watch the video I linked to? You really need to watch all five parts to get the full picture. If you did watch it do you disagree with its message?

If for some reason you are unable to watch the film, perhaps due to slow internet, here is a link to the Money as Debt Reference page, with the full transcript of the film.

I really do recommend everyone watch the film Money as Debt, and you can come to your own conclusions.

Money As Debt: Part 1 - Corrupt Banking System - Cartels Robbing the Public