Bloomberg Magazine's cover is Hank Paulson with the big title of "The Persuader" and subtitled "Treasury Secretary Hank Paulson brings crisis management to Washington".
What happened to free markets since the beginning of the crisis?
- The CFTC is closely monitoring the commodities market to make sure that 'speculators' do not make the prices go up. They are warning again today.
- The SEC (and almost all the other regulators worldwide) banned the short selling on several hundreds of financial stocks in order to avoid 'speculators' driving the prices too low.
- The Fed has created its 'alphabet soup' in order to pump liquidity into the markets but that's just a fancy way of saying: lending hundreds of billions of dollars to the banks. Borrowing facilities from the Fed now include: TSLF, PDCF, TAF, Single Tranche OMO, Term Discount Window Program (see here).
- The Fed and the Treasury (each being a single person decision making process: Bernanke and Paulson, none of which are elected) took over Fannie Mae and Freddie Mac and AIG, adding more than 5 trillion dollars of liabilities to the balance sheet of the US and facilitated the take over of Bear Stearns and Merrill Lynch.
- Paulson is now asking to have a check of at least 700 billion USD with which he will spend with now approval process and more importantly without being accountable for it (Sec. 8. Review: Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.)
- The Fed is changing the rules overnight without any justification or legal foundations in order to bail out Goldman Sachs and Morgan Stanley.
There is just so much to say, but I would like to keep it short.
- Investors have lost confidence in the USD, the markets and Paulson/Bernanke. Bank stocks are collapsing because the banks refuse to come clean with their balance sheets and keep on lying on their reports. The financials index plunged 10% yesterday, while short selling is prohibited. So short sellers driving the markets down was just proven to be just another lie. If you refuse to show your balance sheet, it means that you have something to hide.
- Paulson seeks immunity. When you do that, it's very likely because you know that you are doing something you will be prosecuted for.
So who is being punished here?
- The Citizens of the United States because their currency and their democracy is being destroyed and their constitution is being shredded
- Those who have been saving money are being punished through inflation produced by the Fed with the blessing of the Treasury.
- Those who have refused to get a mortgage because house prices where in bubble are being punished because the government is doing its best to keep the prices high instead of letting the free market decide.
- Those who saw all this coming and shorted the markets.
- Those who are trying to save their money buy buying commodities, because you cannot find any more gold on the markets (the US Mint has stopped minting gold and silver coins, all the retailers are basically out of stock of individual investor friendly products).
- Are the US Citizens going to receive a single dollar of this multi-trillion plan? No.
- The companies, establishment and happy few that made billions by cashing in on the credit binge.
- People who have been spending more than they earn and hence are in dept (this is just a side effect of the inflation they are creating, they don't care about the people!).
Get out of most of your paper currency, buy Gold and Silver and store them in your home, don't buy paper gold like GLD, GBS or future contracts. Make sure that you have the physical with you in order to avoid confiscation or scams. Precious metals will free you from the fiat currencies which are backed only by the government dept. They have no value and their current price is going to pluge exponentially to zero.
Recommended links (MUST READ):
Senator Dunning Declares the Free Market Dead
Mish: Contact your Senator
London Banker: "The problem with financial institution balance sheets is that on the left hand side nothing is right and on the right hand side nothing is left."
(more to come)
The Zero Currency, Tom Cash draws the same conclusion as I did and it's definitely worth the read.