Soon You Will Understand Alstry
When it is the policy of your government to encourage and reward Wall Street for writing bad loans....pretty soon bad loans infect every inch of our economy. While you are loaning out the money, it is one hell of a party as everyone is spending.
After, 9/11 it was policy to loan the private sector trillions of dollars per year to spend in the economy. Borrowing drove spending and generated huge profits for Wall Street and taxes for government which drove even more spending and job creation.
For the past few years, policy has changed and we have started to cut off credit and raise interest rates to the private sector. As a result, private sector spending has collapsed and so has tax receipts to government.
Government and swap backed Wall Street companies have picked up the slack borrowing unprecedented amounts of "junk" debt. This borrowing has generated much of the profits of our banks and spending in the economy. Could you imagine the contraction to GDP if government wasn't borrowing/printing $2 Trillion per year deficit.
How do you think that can ever be serviced against a backdrop of evaporating revenues?
Guess who funded the debt issuance??? Now our pension funds and mutual funds are infected with a pile of junk debt and equity that is very vulnerable to the underlying debt collapsing. So are our personal accounts and mutual funds.
Our cities, counties, states, schools, and hospitals are all burdened with massive debt....same with our corporations and families.....now that revenues are imploding and jobs and wages are being slashed.....most of our economy is subject to massive default.
Check out the rising foreclsoures this quarter.....AGAIN. Same with rising vacancies and rising CRE defaults. How about collapsing sales at Harley and Polaris......none of this is hard to see if you look.
The question is how will government let you know that it was policy to infect our nation with an unsustainable amount of junk debt........and in the end, only bail out the bankers and let the citizens fail? Our pensions will be bust, same with our municipalities and entities within......and few are prepared for the fallout.
What is strange is how can a community who is so focused on investing not appreciate that our economy is simply a Ponzi economy of junk debt against a backdrop of evaporating revenues????? And if the debt is junk......what do you think the equity is worth?
And in the end, it was government policy to drive this ponzi scheme and bankrupt the nation??????