Homeowner Stabilization Intiative

Hi Jolenta,

What a surprise when I checked my Google Alert this morning and found this post.  It is right on the money!  Unfortunately the currency has already been debased by running the printing presses at full speed over the past 9 years and throwing them into hyper speed in the last 9 months (please take the time to watch this -  http://www.facebook.com/ext/share.php?sid=55183306502&h=CbG0t&u=8cLb7 . 

I cringe to think of the hyper inflation that we are about to experience and have no idea what to do to protect assets from these ruinous actions that have been put upon the citizenry by the politicos, lobbyists, and executives that can't think past their reelection, bonuses and or their golden parachutes.

I have a document that is about 40 pages long called "Understanding Economics in an Hour".  It was published a number of years ago by an obscure magazine called the "Millionaires Manual".  I have searched Google for the story and also for the author to no avail.  I have understood economics ever since reading it.

Some of the lessons from the story:

• Do not reelect anyone - the way the system is now, the politicos will use taxpayer money to buy votes to get themselves reelected.
• Every other year should be spent purging the system of obsolete programs and laws and should precede the year that any new programs and laws are put in place.
• That for every new person added to the government payroll our GDP drops and at the same time the demand on the citizenry for taxes to support that employee increases.
• That politicians even when armed with the cause and effects of their actions will ignore the negative consequences to get themselves reelected when the less popular decision would be in the best interest of the citizenry.

I'm not being partisan here. Both parties are guilty as sin. President Obama has a true crisis here. However, it was not just of the doings of George Bush. George Bush was supposed to be a conservative and became hyper liberal with his fiscal policies following 9/11 and continued it through his last days. It has been surreal the last decade - the conservatives became very liberal and the liberals became very conservative and I think it was all playing for the 30 second soundbite on the multitude of 24 hour news channels.  They have all acted as wolves in sheeps clothing trying to be anything they needed to be to get reelected by their constituents and the rest of the country be damned.

I saw this coming!  I can't beleive that our Ivy League educated leaders did not!  I can't beleive that Greenspan did not!  It smacks of doing anything to get a party elected and reelected. The leadership of the Democrat and Republican parties should be ashamed from the top right on down to the local level for creating false prosperity that ends up robbing the citizenry as a whole and creating hyper misery that follows a sense of hyper prosperity (false prosperity).

I feel for President Obama and here is why.  The whole problem is that the low , low interest rates that drove all the overdevelopment, the unrealistic housing prices, and consumption driven by Home Equity Lines of Credit (homes used as automatic teller machines made possible by bubble house prices) caused people to make unwise decisions on debt and the oversight of the lenders made it possible.

So, here we are, everyone has been trying to keep up with the Jones and bought into the false prosperity by taking on debt that anyone that lived through the Great Depression would have run away from as fast as they could (ah politicians history repeats itself, yet you aren't watching longer term cycles you are watching your election cycle).  The cure is a stimulus, yet every time in the last 9 months the politicians have tried to stimulate, it has not worked.  Why?  Well, how about the fact that Greenspan  had his foot on the gas beginning with Y2K and never let it up.  It was wreckless, we were bound to have a wreck, and we did.  You see, the stimulus isn't working because everyone is in debt up to their eyeballs and can't do anything with stimulus except try to service debt and that creates no new economic activity.

I know what the popular personal finance advisor Dave Ramsey would recommend an individual do.  Cut spending and get a second or third job and pay down the debt.  Yet for individuals in a contracting economy there is sometimes no job at all. Yikes! 

I do wish Mr. Ramsey's google alert would bring him here and get him to post what a Country should do to get itself out of a hole.  For some reason I beleive that it would be to stop digging (spending) and get another job (create wealth).

Which brings me to my last point.  About a decade ago the politicians and big media began declaring our country a "service economy".  Again, I saw the writing on the wall.  Remember Ross Perot getting humiliated by the media and the Saturday Night Live crowd when warning  about NAFTA and that "Great Sucking Sound"?  Soon after, we saw the entire textile industry disappear from the Southeast and move to China.  Great, our politicians created policies that greatly limit wealth creation (mineing and drilling, agriculture, forestry) move all the processing and adding of value (manufacturing) overseas, and we are all going to be drunk with cheap money buying the services of each other her in the good old USA.  It is a Ponzi scheme.  What happens when there is a conttraction?  The whole "service economy" collapses because no one is demanding services that they can't afford.

If there are any true Statesmen in Washington, they should all withdraw from the Democrat and Republican parties, make it known they do not intend to run for reelection, study history, remove antiquated laws and programs, and clean up that corrupt city before we become the modern day Rome that collapsed after the citizenry learned that they could vote themselves temporary prosperity when electing  politicians that lined the pockets of the voter.