Courtesy of Karl Denninger at The Market Ticker
And how you were going to get screwed?
Feel free to use the search bar and type in "Pension", then have a read.
You’re hosed America. Severely. Far worse than you think. And there’s nothing you can do about it.
I wish it wasn’t true, but it will be, because you refuse to stand up and put a stop to this crap.
France is the latest to seize pension assets. They follow Hungary and Ireland. There will be more. And eventually, it will come here – and when it does, you will get hosed.
There is only one way to stop it.
You, the American people, must demand that all of the bad loans that were made by banks be forced back onto them and defaulted. At the same time the government must stand back and let the adjustment take place.
Yes, this will detonate the banks. Yes, this will result in huge losses. Yes, this will result in a short-term dislocation in the economy – a really, really bad one. Yes, it will result in the collapse of home prices, bankruptcy of tens of millions of people and even more unemployment in the short term.
Again, government must do nothing more than providing emergency shelter and food to those who need it in this regard.
Government must also, at the same time, put an immediate stop to the offshoring monster through wage and environmental-parity tariffs.
If, as is often claimed, the reason for firms to offshore production is because people are willing to work harder or smarter than they are in the US, all fine and well. But if they’re doing it because they have effective slave labor or can pollute with impunity, thereby having dramatically lower costs through poisoning the earth, that has to stop because those firms are then creating an economic imbalance that not only cannot be maintained but if not stopped will destroy our nation’s economy and funding mechanisms.
We all want certain services from our government. We claim we want social services of various sorts, including social security, medicare, welfare and more. But we have to be able to pay for those services, and we can’t when the tax base is destroyed by sending our labor overseas in search of slave-like conditions and the ability to poison the planet instead of keeping it, and the tax base it generates, here in this nation.
We have avoided the truth of this matter through borrowing for two decades. We’re now coming up against our national credit card’s limit. To avoid that The Fed, with the explicit consent of both Congress and President Obama, is intentionally trying to devalue the currency – that is, create "inflation."
But the money is going overseas, and the inflation he’s creating is in China. This is due to the fact that money is global and goes where it can earn the best return. It doesn’t care what Bernanke wants or what our government wants – money is agnostic.
We can choose only between an orderly process and a disorderly one. We can choose to force the banks to eat their own cooking along with citizens and take them into receivership or we will suffer a disorderly collapse. That which is happening through Europe will come here. We cannot avoid it. We are only holding our place in line and acceleration is now taking place in these matters.
Remember that we started here with Bear Stearns and were told it was all ok after that. Then we had Fannie and Freddie get into trouble, and we were told they were "stabilized" with Paulson’s Bazooka. He lied – both they and Lehman collapsed at once.
The point is that he lied – he knew damn well what was going on and so did The Fed. They all knew that Citi, for example, was writing crap paper for more than two years prior to it all blowing up and that 80% of their loans were bad by 2007.
They tried to hide it and failed.
The same thing is happening in Europe right now. The rolling "fails" will continue and intensify until the truth is recognized and the debt that cannot be paid is defaulted. This path cannot be avoided irrespective of what people want or desire.
Our time to act in a responsible fashion as citizens of this nation is running out. Three years ago I sent a fax to all 535 members of Congress urging them to put aside the cash necessary to feed, house and clothe at a basic level up to 1/4 of Americans – in closed military facilities and similar if necessary – for a year or more. I’m talking about three hots and a cot, not "welfare payments" to sustain people in their iPhones and cable TV.
Of course I was ignored and probably considered a nut, but in point of fact nothing has gotten better, and in fact has gotten worse, since I recognized this threat and warned of it and what must be the response.
If you’re currently dependent on pension funds of any sort, make other plans because given our government’s idiocy and refusal to stop sucking on the wang of people like Blankfein, Lewis and Strumpf you will not have a backstop from the government either.
God helps those who help themselves, and on the path we’re on that’s all you’re going to have left.
Pic credit: William Banzai7
