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alstry (< 20)

THE SOLUTION!!!!!!!!!!!!



March 21, 2009 – Comments (3)

Before crafting a solution...we all had to understand the problem.  Now I think many of you do....

For the past 20 years we built an economy based on a Ponzi Scheme of ever expanding debt.  At the end, we were borrowing simply to service interest and not purchase a thing or produce goods and services.  Those who saw it early knew it couldn't last..... and now more and more are waking up to the problem.

Most of us benefitted from the Ponzi scheme to one degree or another.  Better schools, bigger homes, nicer vacations etc....   Dimissing the details....we are where we are..... and we must craft an equitable solution to this massive ponzi scheme which we are all part of or we will breakdown into social anarchy.  Dealing with the problem is not too difficult and not much different from unwinding the Madoff ponzi scheme.

The following is simply a back of the napkin outline:

The first thing we must do is protect the dollar.  The dollar is simply the most senior debt obligation of the United States to the people of America and the World.  If the dollar is not sound....WE ARE ALL BROKE!!!!!!!!!!

Everything else is up in the air as everything we own is measured in dollars.

Just like a corporation with layers of capital any bankruptcy the most senior debt is paid first and as we go down the capital structure we keep paying in order of priority until there is nothing left to pay.


For a country, the most senior obligation it is its currency.  Then its other debt obligations....Then its entitlements and so forth.  We as a nation must protect our currency or we have nothing. 


America as a nation has a tremendous amount of wealth in natural resources and productivity backing up the dollar.  If we simply repudiated all of our nation's government bonds, senior and subordinated, and repudiated all of our entitlement obligations...the American dollar would be the strongest currency in the world.

At least by protecting the dollar....those that were virtuous and saved, at least up to FDIC limits, would be rewarded and the rest of us who took risks will have to bear the costs of those risks and we would simply start over.

In all likelihood, however, not only would we have a strong dollar but we would be able to continue further down America's capital structure and save much of our debt obligations as well.


In order to bring equity, fairness, and confidence back to our society....

The trillions of dollars we have recently paid to insolvent banks and bonuses to executives is obscene.  Insolvent institutions in America go bankrupt and don't give their executives millions of dollars in bonuses unless those executives like looking at society from behind bars.  How can you reward one small segment of the population for bad behavior and destroy the rest of the population for the same behavior???


Every dime of that money given to insolvent banks should be used to start a new bank with fresh capital that everyone can trust.  Such banks would attract capital at a rate like we have never seen before and likley be the strongest financial institutions in the world.  It does not have to be a single could be multiple banks creating competition right out of the gate but each would be well capitalized and banks the world can trust.


The old defaulted debt would go into a pool like the RTC......any proceeds from the sale of that debt would be used to capitalize the new banks.

After much of the current business and population have restructured to a new capital structure, the new banks could start making responsible loans to those worthy and enterprises that could satisfactorily cover debt service under the recapitalzed system. 

After the inevitable contraction of our economy, we could start growing again... on a base that rewarded those that behaved responsibly and punished those that took undue risk.....instead of Wall Street and politicans owning everything and Americans owning nothing in a very depressed society.

Ask yourself, why is any bank too big to hard is it to start a new one???....  Unless of course you are a bank on Wall Street and you have America's politicans on your payroll.

Wake up America....the solution is is just that Wall Street, the Media, and your politicans don't want you to know!!!!!!!!!!!!!!!!!!!!!!

Personal responsibility is what made America GREAT!!!!!!!!!!!!!!!!!  It is time for all of us to share in that responsibility and make America GREAT again.



3 Comments – Post Your Own

#1) On March 21, 2009 at 4:10 PM, BradAllenton (31.77) wrote:

OK, lets start that plan right now. Close your eyes, snap your fingers, click your heels together, and BAM!!! nothing happens. Why? Because we don't have the power and they don't want to fix it. For the big money people the system works great and guess who is in control? The fix was never complicated, it was never beyond our understanding. It is simply in the hands of criminals who have no intention of giving us a fair deal... ever. What it would take to force out the ruling class is far beyond what Americans will be willing to do. Things will need to get to where you are saying they could go before anyone will step up. I have said it before in blogs and I will say it again, Americans are fat, lazy, woosies who won't do anything that requires them to step out of their comfort zone.

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#2) On March 21, 2009 at 4:11 PM, 119862913 wrote:

A high dollar has enabled the overextended and ravenous American consumer to buy foreign goods on the cheap for way too long. We need many more dollars in circulation and less ability to buy foreign goods. This will, quite naturally, reign in the appetite of the consumer as well as making the American worker more competitive with foreign labor costs. At this point we must spend, spend, spend then spend some more!

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#3) On March 21, 2009 at 4:54 PM, shffl (< 20) wrote:

we should begin uniting for a common cause instead of letting the government and wall st run us around like this...

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