“Like scores of evangelists and hypocrites and moralists who spew and praise family values and pretend to be holier than thou and are then regularly caught cheating or found to be perverts, these Bush hypocrites who spewed for years the glory of unfettered Wild West laissez-faire jungle capitalism allowed the biggest debt bubble ever to fester without any control, and have caused the biggest financial crisis since the Great Depression.

They are are now forced to perform the biggest government intervention and nationalisations in the recent history of humanity, all for the benefit of the rich and the well connected. So Comrades Bush and Paulson and Bernanke will rightly pass to the history books as a troika of Bolsheviks who turned the USA into the USSRA.”

From this article.  Great summary.  Here’s another good one: stock market cheers financial insanity.  Our denial is staggering.  As if throwing another trillion at the problem is going to fix it.  Neither will two trillion.  Or three.  Or fifty.  Want to know what the problem is in simple terms?  This picture will illustrate it:

That’s the problem.  The small number on the left is the amount of dollars in existence, which is directly tied to our purchasing power.  The slightly larger number is the productive capacity of the entire world to deal with the problem.  The number to the right of that is the total value of all the monetary assets.

The bomb on the right — well, that’s the debt that is now being called due.  Not national debt — but phantom monetary credit called CDS (credit default swaps) that is basically fake money big banks lend to each other to protect each others’ assets.  If you’re shaking your head, it’s because the concept is absurd.  How can there be $516 trillion in credit/debt relationships when there is only $15 trillion in existence?

Good question.  THAT IS THE PROBLEM.  The problem is not greed, nor “lack of regulation,” nor poor oversight, or any of that.  The problem is our entire fiat money-based system, which uses fractional-reserve lending, at the core of which is our Federal Reserve, which allows an infinite amount of fake money, and derivatives thereof, to spring into existence, by the whim of a few bankers.   Back when currency stood for a fixed amount of gold and silver, like checks represent actual money in the bank, there was no problem.  But now that money is decoupled from gold and silver, there can be an infinite amount of credit issued based upon it, and an infinite amount of it created.  Its value, and all debt relationships based upon it therefore, can become worthless.  Just ask Zimbabwe.

Now, can the government create $516 trillion to unwind those derivatives?  Sure, they can add as many zeroes to banks’ databases as necessary; they don’t even have to pay for the ink and paper to print the money.  But then, if there are suddenly 50 times the amount of dollars in existence, how much do you think your dollars are worth in purchasing power?  Well, the answer is $0.02.  Good thing you’ve been saving up!

Of all the people talking about our financial system over the past year, they were all wrong; all except one.  All gave varying degrees of “well, the basics are okay, we’ll just ride this out.  We’ll think of something.  The system just needs a few tweaks.”  Whether it’s McCain’s tax cuts, or Obama’s tax cuts, or talk about earmarks, or curbing spending, or shuffling of this or that, blah blah blah blah blah, none of it hits the mark.  It’s arguing over property boundaries in Nagasaki after the bomb drops.  It’s irrelevant.  No one said, “Hey, we’re in meltdown!  This is the second great depression!  Wake up!  Our dollar will be worthless!”  No one, except one person.

Bernanke was wrong.
Paulson was wrong.
Greenspan was wrong.
McCain was wrong.
Obama was wrong.
Bush was wrong.
Pelosi was wrong.
Giuliani was wrong.
Clinton was wrong.

Not until recently, in the past few months, have any of these people started to admit that something is wrong.  If you listen to their comments from a year ago, they were all sunshine and lollipops.You know who was right?  That “crackpot” — the one no one would vote for.  The crazy guy.  Ron Paul.  Ron Paul was right.  Period.  Everyone else was wrong.  From this:

Back in September 2003, Mr Paul told a House Financial Services Committee that: “Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market.

“This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions.” Of course, if we are going to give Mr Paul credit, than we should also highlight the efforts of Peter Schiff, his economic advisor and long-time economic hawk.

A year ago, he warned about the impending crash of the dollar and pointed the finger directly at the Fed.  For everyone who wasn’t paying attention, here is a video summary from last year:

Ron Paul on the economy in 2007:

Ron Paul on the economy yesterday:

The politicians are predictably pointing fingers at each other, lamenting the greed of anonymous culprits, and telling us the solution is that we, the common people, should pay for it all, even though we had nothing to do with it.  And, predictably, we are agreeing to that, bowing to the benevolent wisdom of our leaders, and crossing our fingers, hoping two plus two won’t equal four this time.

Today’s article of doom: just pick up a newspaper.