EDITOR:
The Fed is trying desperately to manipulate the stock market and prop up the "too big to fail" financial institutions, such as Citicorp, Fanny, Freddy, AIG, etc. Is this really almost half of the market's trading volume? Really desperate. If the Fed were to be audited, it would expose the manipulation, insider trading and corruption. The efficient market hypothesis has been thoroughly discredited. This is not only because of the manipulation.
The markets suffer from herd mentality that leads to successive irrational bubbles. The economy has been based on fallacious economic wisdom that free markets provide efficient allocation of resources. Instead, free market capitalism tends to monopoly and malfeasance so as to maximize profits. The U.S. government has been based on a grand experiment and delusion that democracy is of/by/for the people and cannot be bought.
Remember, an honest politician is one who, when he is bought, will stay bought.
Instead, we have a political system that supports and regulates the markets to facilitate such corporate malfeasance. Liberals blame conservatives, while Republicans blame Democrats, and vice versa, as all are complicit in the corruption. Thus, the federal government has created the mother of all global bubbles. The U.S. debt-based economy is the ultimate Ponzi scheme ($12 trillion national debt projected by Obama to $20 trillion, with $65 trillion contingent debt liability). Multinational corporations have raped the U.S. with free trade, that has resulted in enormous trade and current account deficits, and the export of millions of American jobs.
There is no question, in my view, that this bubble will burst. The only question is when. There are limits to the Fed's ability to print money to cover the deficits and debt of this Ponzi scheme. The financial crisis has exposed the empire and its military-industrial war games as a financial house of cards. The new Japanese government has pledged to move away from the dollar. The Chinese laugh at the U.S. treasury secretary who suggests that their reserves are safe in U.S. securities. The Saudis have threatened to delink the sale of their oil from dollars, if Iran is attached. Iran has created a bourse to sell their oil in Euros, which is the real threat to U.S. interests.
The Russians have met with Brazil, Russia, India, China to establish a global currency to circumvent use of the dollar as the global reserve currency. And so it goes... The dollar will collapse for reasons stated above. No amount of Fed interest rate increases or liquidity drain will prevent the resulting inflation, since so much of our goods are now imported. That is the real "straight talk."
Jerry Sullivan
Minden
