Why Is CNN Telling the Truth?

I was working out today and someone had turned on CNN. I was stunned that CNN was warning of an attack on the dollar and a dollar crash. This has been true for some time (I have been blogging about this for several years) but I was stunned that CNN is openly discussing this. China, Russia, the EU and other countries have denounced the Bush-Obama bailout and the massive stock market subsidy that the Bush-Obama administrations have effected. Moreover, CNN allowed a speaker to say that Obama would be a one-term president.

But why is CNN willing to cover this? CNN reflects establishment, and it is certainly in the establishment's interest to lie about the very shaky ground on which the American monetary and financial system rests.

I am back in the stock and gold markets. I got into the stock market at S&P 760 or so a few days before the 500 point run up about 8 days ago. I got into gold stocks and gold over the past few days.

Howard S. Katz's "conservative" portfolio is now only a few percent below its October 2007 level. I have fared worse on my own. My total accounts are down about 15% since October 2007. Katz is very bullish on gold stocks right now. He is also bullish on the stock market. I am close to 100% invested for the first time since 2005.

In the 1930s Franklin D. Roosevelt created an economic system based on virtually unlimited power on the part of financial interests, especially Wall Street and commercial banks. He did this by ending the gold standard and permitting an unrestricted fractional reserve approach whereby the Fed has unlimited power to expand the money supply. The Republicans jumped on board with this system in 1971 when Richard M. Nixon abolished the international gold standard that had been reintroduced in 1944.

In 2008 George W. Bush and in 2009 Barack H. Obama intensified the approach. Instead of government by banks, they introduced government by Goldman Sachs. The
Secretary of Treasury under President Bush, Henry Paulson, was a former Goldman executive. Barack Obama received heavy contributions from Goldman. The Bush-Obama administration ensured that all of Goldman's debtors would receive considerable bailout money. Goldman Sachs is the nexus around which all the recipients of the bailouts revolve.

I am trying to figure out whether the US government is worth seriously discussing any more. I am also having trouble deciding whether the Republicans and Democrats have a grain of difference between them. American conservatives and American progressives have one allegiance: the corporate charter of Goldman Sachs.

Urgent Business Offer From Minister of the Treasury, Henry Paulson

You know those e-mails from supposed third-world treasury officers offering to deposit $26 million into your bank account if only you'd send them your bank account number. Doug Ross has just received one from Henry Paulson, Treasury Secretary of the United States (h/t Larwyn)! A true classic!

>SUBJECT: REQUEST FOR URGENT BUSINESS RELATIONSHIP

DEAR AMERICAN:

I NEED TO ASK YOU TO SUPPORT AN URGENT SECRET BUSINESS RELATIONSHIP WITH A TRANSFER OF FUNDS OF GREAT MAGNITUDE.

I AM MINISTRY OF THE TREASURY OF THE REPUBLIC OF AMERICA. MY COUNTRY HAS HAD CRISIS THAT HAS CAUSED THE NEED FOR LARGE TRANSFER OF FUNDS OF 800 BILLION DOLLARS US. IF YOU WOULD ASSIST ME IN THIS TRANSFER, IT WOULD BE MOST PROFITABLE TO YOU.

I AM WORKING WITH MR. CHRISTOPHER DODD, MILLIONAIRE SENATOR, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY. AS A SENATOR, YOU MAY KNOW HIM AS LEADER OF THE AMERICAN BANKING DEREGULATION MOVEMENT IN THE NINETIES. THIS TRANSACTION IS 100% SAFE.

THIS IS A MATTER OF GREAT URGENCY. WE NEED A BLANK CHECK. WE NEED THE FUNDS AS QUICKLY AS POSSIBLE. WE CANNOT DIRECTLY TRANSFER THESE FUNDS IN THE NAMES OF OUR CLOSE FRIENDS BECAUSE WE ARE CONSTANTLY UNDER SURVEILLANCE. MY FAMILY LAWYER ADVISED ME THAT I SHOULD LOOK FOR A RELIABLE AND TRUSTWORTHY PERSON WHO WILL ACT AS A NEXT OF KIN SO THE FUNDS CAN BE TRANSFERRED.

PLEASE REPLY WITH ALL OF YOUR BANK ACCOUNT, IRA AND COLLEGE FUND ACCOUNT NUMBERS AND THOSE OF YOUR CHILDREN AND GRANDCHILDREN TO WALLSTREETBAILOUT@TREASURY.GOV SO THAT WE MAY TRANSFER YOUR COMMISSION FOR THIS TRANSACTION. AFTER I RECEIVE THAT INFORMATION, I WILL RESPOND WITH DETAILED INFORMATION ABOUT SAFEGUARDS THAT WILL BE USED TO PROTECT THE FUNDS.

YOURS FAITHFULLY MINISTER OF TREASURY PAULSON

Welfare Check Day for Wall Street

(H/t Larwyn.) Mark Hemingway of National Review Online blogs that a "deal" has been reach with respect to the bailout scheme and that Henry Paulson has been given a free hand to spend $350 billion, with another $350 billion available in the future. According to the Wall Street Journal:

"The bill leaves many mechanics of the operation up to the Treasury. Among these are the crucial issues of how the U.S. government would decide which assets it will buy and how it would decide what to pay for them. The legislation leaves the Treasury 45 days to issue guidelines on those procedures. The bill awaits votes in Congress starting on Monday.

"From big Wall Street houses to small community banks, executives have expressed an interest in signing up for the bailout. But some have said the extent of their involvement will depend on critical details."

"At the bill's core is Mr. Paulson's concept of buying impaired mortgage-related assets from financial firms -- giving them cash to replace the toxic debts that have put them in danger or dissuaded them from lending. The plan is to help the firms restore their capital bases as well as the trust that enables them to borrow and lend at reasonable terms. Without this, officials worry that the credit markets, the lifeblood of the economy, would grind to a halt.

"Sellers of assets could include a broad range of financial entities -- not just banks but also credit unions and pension funds. The assets offered to the government must have been originated or issued on or before March 14, 2008."

"Support from House Republicans, who staged an 11th-hour revolt on Thursday, is still uncertain. Asked about the outcome of the House vote, Rep. Christopher Shays, a Connecticut Republican, said, "I think it's up in the air. This is what we call a legacy vote."

JustOneMinute links to C-Span's website that carries the draft bill. JustOne Minute notes:

"Section 113 starting on page 33 is the place to look. At a quick glance it appears that the Treasury Secretary is exhorted but not obliged to buy warrants giving the taxpayer some upside participation - the Dodd formulas have disappeared, thank heaven. But at second glance, it appears that *any* purchase by Treasury must be accompanied by warrants of some type; earlier reports suggested that auction purchases would be exempt. The Secretary has broad flexibility in setting terms but I suppose he would be evading the spirit of the bill if he set an absurdly high exercise price with the idea of making the warrants meaningless. Paulson was worried that healthy firms would stay away from the auctions rather than deliver warrants. I guess we'll see if he's right."

I'm a little confused why Paulson would be rescuing healthy firms. I'm even more confused why incompetently managed firms deserve a $700 billion dollar subsidy to keep them afloat in order to continue being incompetent so that they can waste even more money, allowing conservatives to blame the Democrats and Democrats to blame capitalism. Only in the United Socialist States of America.

The majority of Americans did not favor a bail out. But Americans continue to support the two party system despite indifference to the public interest. This is probably because of the mental incapacity of the electorate to grasp problems that progressivism has demanded they resolve. The result is that progressives reach exploitive and incompetently thought through solutions that harm the public. The banking system is one of the biggest examples. It produces no value; it extracts enormous value; and it impoverishes the public. Yet, the public is not able to discern the issue. Progressivism has killed democracy by expanding the required information set because it vastly expanded government. America is no longer much of a democracy. This is accentuated by the bailout's permitting government to take direct ownership of banks. We are moving to a true socialist state accompanied with the economic decline concomitant to one.