9.09 MOAP #3 Concentric Contraction
FHA running out of money
FDIC running out of money
Pension Guaranty running out of money
Federal, State, and Local Tax receipts evaporating
Anyone notice a trend???????
Soon you will learn that the American economy is a basically one customer one market economy.....The American Consumer. As long as the American Consumer consumed, our economy boomed. Initially we consumed because we produced a lot.....lately we consumed, because we borrowed a lot.
In 9.09 you will learn that you can't convert a massive consumption economy dependent on leverage to a savings economy without MASSIVE economic and social upheaval.
Our entire economy is structured to serve massive numbers of people consuming massively. Both components must be present in order to sustain America as we know it....we have massive numbers of retail outlets, massive numbers of banks, massive numbers of just about everything. We have massive governments and massive numbers of government workers dependet on this massive infastructure paying massive property, income and sales taxes. If we don't have massive numbers consuming, we can get rid of half the three quarters of what we have and still be able to accomodate our new lower demand.
Further, our incomes are predicted on massive consumption...most of us make between $30K and $300K because we consume massively. If we are not consuming massively, than our incomes must be reduced to accomdate the lower consumption. In many cases, at least 50-75%. The problem is that most of us entered into mortgage contracts, property tax contracts and insurance contracts predicated on incomes in a consuption economy. Such contracts are unaffordable in a savings economy as many simply can't afford their current expenses with lower incomes.
Alstrynomics has documented this process unfold over the past year.....now things are accellerating as more jobs are being cut, few are being hired, and savings and credit is being cut off and depleted rapidly. We are not too far of before the system collapases because too few will be able fulfill contractural obligations and we will face unprecedented defaults as we moprh into a savings economy.
Benny knows this, Timmy knows this and now you know this as Wall Street is the only one being bailed out during this convulsive process.