The Flea Market

A developer once told me that if you do a deal with someone that has fleas, your bound to get fleas. For example, Bear Stearns and AIG have fleas. I understand the fear-based argument for getting fleas, “We have no choice”. But borrowing more money to participate in the Flea Market can’t be our only choice. What if the “Free Markets” posed another choice? What if there was a much better way than borrowing more time and money just to get fleas (and these are big and scary fleas)?

At first, this proposed $700 Billion fund to bailout Wall Street and the housing market and the insurance industry and the automobile industry (are there any other industries left? Oh, I forgot FOOD, and so did they!) was only $500 billion, and before that, it was only Fannie and Freddie, and before that, it was only Bear Strearns, and before that, Paulson was the CEO of Goldman Sachs, one of the masterminds behind the creation of this monster credit mess. Do you think Paulson’s next move will be to ask Goldman Sachs to advise him on a Federal Reserve IPO? He could have AIG insure the bonds and Bear Stearns could sell them. All for “the interest of taxpayers.”

The U.S. government is now the largest debtor of houses in America (thanks to Fannie and Freddie), the largest employer in America (thanks to a growing Socialist government and armed forces), as well as the owner of the largest Insurance company in the world (thanks to AIG). They say we are not in a “Depression”, but this certainly make me feel depressed.

So what’s the strategy for the $700B or is the U.S. still just sitting at the blackjack table borrowing more money from the “house”? Please assure me that you didn’t just come up with this idea yesterday. Oh yeah, you did. So would we even consider a new equitable idea or are we so accustomed to going to bed indebted that we lost our impulse to get up from the table and just walk away?

 We are using taxpayer money to eat highly leveraged financial poison. The poison will kill its acquirer; and a $700 Billion (borrowed) Fund to acquire Wall Street’s “Bad” assets will get squashed. It will take tens of Trillions of Dollars that we don’t have. So by sponsoring this most unstrategic ponzi scheme that simply steals from Peter to pay Paul, we will inflate the dollar (soon to be confused with the peso) to no end. 

“An indiscriminate and general increase in credit facilities means simply inflation, just as does a regime of goverment paper money…and burdens the economic system with the unadapted and with those firms which are unfit to live.” – Joseph Schumpeter, The Theory of Economic Development, P. 254

So does this country really need/want more debt? Inflation is in the air (as is asthma), so what we need is a strategic plan to get ahold of some clean oxygen to fend it off at the (energy) source.

BREAKING NEWS: Retirement Savings and Social Security strategically evolve into Sovereign Wealth Funds:  Long-Term Strategy is to Acquire Renewable Energy Assets. Renewable Utilities expected to create stable dividends for retirees and huge, sustainable economic growth engine for troubled U.S. Economy.

These newly formed Mini-Stockmarkets by our vast retirement savings funds will be designed to finance solar panels, windmills, and other utility producing renewable energy assets in a similar fashion to the way Wall Street used to finance houses (can you say “renewable energy mortgages”). That way, the construction industry would get back to work installing renewable technologies, and the automobile industry and steel factories would follow suite as new (sustainable) JOBS spread across America. Detroit would naturally become the leading renewable energy manufacturing city in the world. Wall Street would sell CDO’s on secure renewable energy assets and Silicon Valley would naturally lead the innovation of our renewable energy revolution. Now that’s a happy ending if I ever heard one, or maybe its just the beginning.

Other capital savings would follow suit to compete to own their own energy. Energy costs would perpetually deflate. More competitive and sustainable, decentralized, local economies would naturally result with access to such positive energy. Our lenders (i.e. Social Security is currently our largest lender by far, talk about drinking your own blood) would certainly be happy as the economy would quickly move closer to sustainability; and with it an ability to repay our debts.

Is it possible to fight inflation at the energy source? Yes, and its the only true way. They built our utility grid across the U.S. in the early 1900’s. Our challenge certainly pales in comparison to the journeymens’ of those early years as they couldn’t even utilize the grid when constructing it. The goal of our retirement savings funds would be to produce enough renewable energy/dividends to fully power the utility grid in 10 years time, while throwing off enough cash dividends from our utility bills to “securely” make our retirement and Social Security payments.

Could our retirement savings become the leaders of the Free Market? I don’t know, but sounds like a strategic economic plan; unless of course you had your heart set on the Flea Market.

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