How Bankrupting the U.S. Treasury Makes for a New Bull Market ~ The Risk Averse Alert

Sunday, November 23, 2008

How Bankrupting the U.S. Treasury Makes for a New Bull Market

How best might the purpose for which the United States was formed effectively be destroyed?

This radical question defines a useful analytical framework for assessing prospects in the stock market over months ahead. Consequences it implies probably are quite the opposite of what you might initially think.

Truth is the effort to render impotent the principles for which this nation was founded is the trend that is your friend ... and this trend, indeed, has long coincided with the ascent of financial markets.

You do not need me to list the many ways government oversight of economy and finance have been purposely diminished over the last several decades. The leading role this has played in fostering excessive speculation is beyond dispute. Likewise irrefutable is the widening divide between haves and have nots effected by this policy, as well as material vulnerabilities that consequently proliferated as a result.

All effects proceed from an American government whose intended, constitutional power has been purposely usurped.

Herein lies the key to understanding the mindset of institutional elements responsible for bringing the nation (and the world) to this extraordinarily vulnerable point and why well-connected, private persons now in positions of authority are so brazenly working to further perpetuate a status quo which, clearly, has rendered government powerless and created dangerous instability both in finance and in the physical economy at large.

What today is being "saved" is only tomorrow's assurance the governing principles for which the United States was formed are essentially destroyed. This should be obvious simply by the fact a bankruptcy reorganization of the entire financial system is nowhere to be found in public policy discussion.

Therefore, our government's ballooning stake in a losing financial proposition — entangling taxpayers already burdened with untenable obligations — is but tacit surrender to an ideology whose well-demonstrated character reveals the face of tyranny that, in truth, cages liberty inside a mountain of unpayable debt.

These same elements use their diverse media holdings to lobby for the dismantling of domestic auto manufacturers. You do realize what role these industries played in building up a prosperous middle class, don't you? Do you understand how vital these industries proved in the fight against fascism some decades ago? Why, then, do you think the very same institutional opponents FDR subdued in his time, who dragged the nation into a Great Depression and who financed fascist movements throughout Europe, are on a drive to shut down domestic auto manufacturers? And if not this, then submitting these industries to a downsizing, attacking their "bloated costs" without so much as speaking a single word about the unlevel playing field American auto manufacturers have been condemned to compete upon by the very elements who, right now, seek their demise.

This, my friend, is how your power to live as you have been led to believe is your American birthright is being further attacked.

So, what has this got to do with investing, you ask?

Quite simply, I am convinced that, as long as the means for usurping the intended purpose of the American Republic can be furthered, the market will find legs. Contrarily, any truly American imperative — or even the threat of such directive coming into the public discourse — bolstering the effectiveness of representative government in its power to uplift the lives of all citizens, likely will result in steep declines.

You simply must recognize our present vulnerability as being something of a double-edge sword...

On one hand historic selling we have just witnessed is legitimately fear-based, because power concentrated in the hands of financiers who are unaccountable to principles involving "the general Welfare" stands at risk of being wrestled away by a government constitutionally charged to promote a profound modicum of stability and equity.

On the other hand such a desirable change in the state of affairs certainly would not have a deleterious effect on the capacity of the nation to generate wealth. Indeed, the effect all too likely would be quite the opposite! This, then, suggests chaos presently in our midst simply serves as a means of extortion. Practically speaking, the threat of calamitous collapse is principally intended to further consolidate financial and economic power in the same private hands who are responsible for having brought us to this extraordinarily vulnerable point in the first place.

Clearly, a sense of panic has been perpetrated upon Congress. Thus, the end desired by well-healed financiers who number among a contemporary contingent of what were in times past called "Loyalists" — an end that has been relentlessly pursued for decades through all manner of extortion and slander — is being rapidly achieved. The aim obviously is to bankrupt the Treasury and discredit American institutions of government. That a pathetically weak legislative body has succumbed to such blackmail is, indeed, repulsive to a patriot ... yet, too, should be rightly recognized as bullish for stocks, because the trend is your friend.

Same crap, different decade...

Yet now the desired end is hastened. The American Republic — long held hostage — stands at grave risk of being slain.

Moving on...

It appears most observers are claiming Timmy Geithner's selection as Treasury Secretary by President-elect Obama had nothing to do with the market's screaming, late-day rally on Friday. O contraire! I am willing to bet this news had everything to do with it. Could there be a better man to further the consolidation of financial power in private hands, while the power of the U.S. government is diminished?

Find me one mainstream media outlet who hasn't been falling all over themselves dishing out a heaping helping of Tory love. Are any questioning how fast Barclays moved into the Lehman building? Of course not! They're all in bed with those institutional elements whose actions have compromised the political, economic and financial integrity of the United States of America, period.

As long as this process is furthered, as presently has been accomplished, then I think you can bet financial markets will find their legs.

Appreciating the degree to which the United States' founding principals are being subverted via a swindle of epic proportions, one might then fathom how the latest chapter in this decades-old conspiracy probably has, for the most part, already played out. So, with this in mind, you might take stock in those strictly technical formulations I typically present here as, indeed, suggesting a significant bottom in the stock market is at hand.

Finally, in times like these one might reasonably anticipate political assassinations rearing an ugly head. Here, too, the intention likely would be to destabilize and weaken the U.S. government at a time when something valuable — something whose identity I could not even guess at the moment — is ripe for the grabbing. Again, given contemporary circumstances, I would be willing to bet such an event, were it to happen, would likely result in positive developments in financial markets.

Sick, I know. But this is the world we live in, pal...

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Anonymous said...


Soem nice ideas, but this is a REALLY long-winded, somewhat pompous way to say:

The final bubble is the government finance bubble -- and this is it.


TC said...

Long-winded is my middle name. Like I said on Monday, diffidence is not my strong suit. However, what is one's commentary worth without some expression of principle? That is why I will disagree with you about "The final bubble is the government finance bubble -- and this is it." It really is so much more than this.

On the matter of principle the one thing I did not indicate was how this moment represents an extraordinary opportunity to relive the experience of those who founded the United States ... and not only here in the States either, but everywhere financial tyranny reigns. Considering the terrible vulnerability of those who seemingly have little regard for the principles upon which the U.S. was founded, one must suppose similar circumstances existed during the 18th century.

Let me ask you this... Can you imagine if one city -- just one city! -- were organized to stop paying their mortgages, stop paying their credit card bills, stop paying their student loans ... this in protest of an arrangement that leaves all too many people living paycheck to paycheck, struggling in ignorance, without much hope for a life complete in liberty? That's how vulnerable the other side is. It stands to reason circumstances were much the same around the time of the American Revolution.

Look, if you want competent financial commentary allowing you to maintain some "I, me, mine" position toward what you are doing in striving to possess wealth, then go find another blog to read. There are thousands of dull, me too, Monetarist Monkey scribbles to choose from. One of them probably has some reasonable measure of reliability you can use to your benefit...