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alstry (34.97)

A Tale Of Two Nations

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September 04, 2010 – Comments (5)

Between 1776 and 1980......America and Americans managed to accumulate about $5 Trillion dollars of total debt including Federal, State, Local, Mortgages, Credit Cards, Commercial etc...

During that period America was a production nation focusing on producing primarily agriculture and industrial goods.

Between 1980 and 2010...... America and Americans managed to accumulate about $50 Trillion dollars of total debt including Federal, State, Local, Mortgages, Credit, Cards, Commerical etc....

During this period America morphed from being a production economy to a consumer/service economy........AND THE IRA WAS DEVELOPED AND MODERN PORTFOLIO THEORY WAS JUST KICKING IN......

Today, most of the $50 trillion dollars of debt accumulated over the past thirty years is seated in America's pension, retirement, and investment accounts while a small fraction is owned by China and other foreign countries.

That is right....most of America's debt is owned by Americans...NOT foriegners. 

Americans charging each other interest so Americans can keep consuming and servicing each other.  Charging interest to go to college, charging interest to buy cars, charging interest to refinance and improve homes, charging interest to build a new factory so we can consume, charging interest to build new schools, charging interest to blow up foreign nations, charging interest to pay bankers bonuses, charging interest to pay Wall Street executive salaries, charging interest so policticians can keep borrowing, charging interest so we can keep consuming.............

THERE IS ONLY ONE PROBLEM WITH THIS SYSTEM......SINCE ONLY PRINCIPAL LOANED OUT WHEN ORIGINATED....LESS THE MASSIVE FEES WALL STREET AND BANKERS TAKE AT THE BEGINNING........

IF BANKS ARE NOT LENDING MORE AND MORE EACH YEAR TO COVER THE RISING INTEREST OBLIGATIONS.......IT IS MATHEMATICALLY IMPOSSIBLE COLLECTIVELY SERVICE THE LOANS.......and everything starts to crash as loans default.  Alstry noticed this started to happen in around 2006/07 as bank lending was no longer sufficient to service interest.

You see....the only reason we had an economy in America for the past thirty years is because we borrowed and borrowed more money FROM EACH OTHER, ORIGINATED AND SOLD BY BANKS.....and spent it between each other.  Ironically, the same period of time Madoff was able to successively take more and more money from his clients and give it back to his clients plus 10% of course.

If people didn't borrow more and more NEW MONEY each year, our economy would have crashed......just like when Madoff could get any more money from new clients, his ponzi scheme collapsed.

Madoff's game grew to about $50 billion.....America's similar game has grown to about $50 trillion.  That $50 trillion makes up the foundaton of value for most of the assets in America.  $50 TRILLION DOLLARS IS ABOUT $150k FOR EVERY MAN, WOMEN, AND CHILD IN THE NATION.....CHARGING ABOUT $3 TRILLION DOLLARS OF INTEREST EACH YEAR WHICH MUST COME FROM SOMEWHERE TO PREVENT THE LOANS FROM DEFAULTING.

Ben Bernanke vs. Bernie Madoff.....is there really a big difference between the two.....not really.  Except Benny might be a bit more devious because he uses the perception of authority and the rule of law behind him.

Could you imagine what Bernie would have done if he could have bailed out himself and his buddies but let his clients rot?  How would the nation have reacted?  BENNY DID EXACTLY THAT!!!! AND THE NATION REMAINED SILENT.

In the next few weeks or months, you are likely going to learn the above.....just like Bernie's clients....we have essentially been investing in financial assets over the past thirty years that were built upon a model that was really not much different than a Ponzi scheme.......a Ponzi sheme that kept working so long as the banks kept lending enough to service interest.

A Ponzi Scheme that drove the perception of America's wealth and prosperity...just like Madoff's clients felt prosperous for the thirty years they invested with him.....

For some, this realization will be devastating...especially those who perceive themselves as wealthy or are banking on a payday in 2011.....others it will not be a big deal.....another bump in the path of life.

For The Institute of Alstrynomics....just a blip in history as we proceed forward into the Digital Age.

Welcome to reality.......Welcome to the Digital Age......

Now the question is whether world politicians will start a major war to control your production and life before you figure out what happened to you??????

 

 

 

5 Comments – Post Your Own

#1) On September 04, 2010 at 2:25 PM, dinodelaurentis (74.72) wrote:

LOL!! Now that is a pointed post alstry!

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#2) On September 04, 2010 at 5:49 PM, alstry (34.97) wrote:

NOW THE HEATLH CARE SYSTEM IS SHUTTING DOWN

+/- 20% OF GDP........

Children's Hospital - 200 to 250

Update: UMass Memorial Health Care - 70 to 80

Health and Hospitals Corporation NY - 300+

HealthAlliance Hospital Leominster Campus - 50

Assurant Health in Milwaukee and Plymouth Minn. - 130

Sutter Medical Centers in Sacramento - 30

HealthMarkets - 70 Layoffs, and another 180 in 2011

Update: El Camino Hospital - 140 by End of October

Update: Memorial Hospital at Gulfport - 47

Update: St. Vincent Healthcare in Billings Mont. - 28

Addison Gilbert Hospital - 7 Jobs, and 2 Programs

BlueCross BlueShield of Tennessee - 140 From TennCare Division

Victor Valley Community Hospital - 26

Update: Kane County Health Department - 62 Possible

Springfield Hospital - 6 to 7 RN's

Connecticut Hospitals - More Layoffs Possible in the coming months

Saint Peter's University Hospital in New Brunswick NJ - 200

Berkshire Medical Center in Pittsfield Mass. - 124

WellCare Health Plans Tampa FL - 87

Mary Lanning Memorial Hospital - 37

Blue Cross and Blue Shield of North Carolina - 80 to 90

Prosser Memorial Hospital's nursing home WA

IT IS JUST A MATTER OF TIME....AS THE BANKERS CUT OFF CREDIT....THE SYSTEM MUST SHUT DOWN....

IT IS THE AMERICAN WAY.......

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#3) On September 04, 2010 at 9:03 PM, alstry (34.97) wrote:

Hospitals shutting down.....foreclosures skyrocketing......and now.....

Youth Employment at Record Low

And all of this WHILE government is running the largest stimulous program in human history........and we are told this is a recovery......

and some Fools are counting their 2011 chickens????

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#4) On September 04, 2010 at 9:11 PM, NOTvuffett (< 20) wrote:

2011 chickens? that is cluckin' stupid, lol. 

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#5) On September 04, 2010 at 10:37 PM, alstry (34.97) wrote:

The sheep view is catching on......got this from Denninger....

http://market-ticker.org/akcs-www?post=165965

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