Friday, October 17, 2008

Illegal Immigrants Flying ICE Air

With the media’s attention focused on the presidential elections, not much attention is being given to illegal immigration. In fact, both candidates seem more than happy to side step the issue (and given their mediocre track records, I can understand why). However, I came across a really interesting article in today’s Wall Street Journal that I thought I’d share with you (

Did you ever wonder what happened to illegal aliens after they were picked up? I just assumed they were photographed, fingerprinted, given some coffee and donuts and put on bus back to Mexico or wherever, just to do it all over again a few days later. But what about the one’s who came from, say, Panama or El Salvador? The article, “Now Boarding: Illegal Immigrants On One-Way Tickets Home” written by Miriam Jordan gives some great insight into what the US Immigration and Customs Enforcement (ICE) is doing, and frankly, I was amazed.

Did you realize the US Government flies tens of thousands of illegals back home ever year? According to the article, in the fiscal year ending on September 30 2008, ICE had flown some 76,102 illegal immigrants to over 190 countries, excluding Mexico. Last year, the figure was 72,187. In 2006, that number was 50,222. What’s more, according to Ms. Jordan, their flight home is more than comfortable. It’s complete with “leather seats, ample legroom, and complimentary “free food” in the comfort of a quiet air conditioned Boeing 737/800. All the right amenities to encourage an illegal alien to stay home right? All that’s missing is group photo before the flight.

The US Government spends an average of $622 per person to fly these folks to such destinations as Guatemala City, Tegucigalpa, Honduras, with new flights to the Philippines, Indonesia, and Cambodia being added! Now, I’m the first to tell you I’m no mathematician, but if my numbers are right, that’s $47,335,444.00 of our tax dollars per year! I’m sure that doesn’t include wear and tear on the planes, fuel and personnel costs. I can’t help thinking how many police officers that money could equip, or how many school lunches or after school or senior programs that money could fund. Why can’t our politicians seem to act on this issue? Americans, overwhelming and irrespective of demographics or political party, want to see illegal immigration brought under control. Neither McCain nor Obama offer a serious solution to solving the problem; only the usual band-aide variety quick fix.

When the illegals arrive back home, most are welcomed by their home government, complete with the use of a free telephone and money changing service, and van to take them to the nearest bus terminal according to Ms Jordan. In short, they’re free to walk (or ride in most cases) without as much as a slap on the wrist. And if you think that’s the end of story, guess again. Many of these “non-revenue passengers” as they’re cited in the article, are frequent fliers, meaning they've been repeatedly deported (I wonder if that qualifies themselves for a window seat?). Oh, and that free lunch, it consist of a bologna sandwich, potato chips, orange juice, and a bag of carrots. Sorry, no substitutes.

I’ve got a better idea. Let’s put them on an old beat up smelly rusted tramp steamer and rock them back home. Everyone on board will have a great view of the ocean, though I suspect most will be hanging over the side looking down rather than enjoying the horizon. We’ll save a ton on “free” lunches (see the aforementioned comment), not to mention jet fuel costs or landing fees. Since the trip will take a little longer, they can make themselves useful by cleaning, scraping, and painting the ole tub, and of course there’s plenty of fresh air! Additionally, we need to bill their native country for the costs of returning their citizens. After all, illegal immigration is as much their problem as it is ours. Perhaps then we can get back to taking care of Americans.

So Whose Fault is it when Candidates fudge on the Federal Budget?
By Jean Johnson and Scott Bittle,
Authors of The Voter's Survival Kit, a series of election guides from and the book Where Does the Money Go? Your Guided Tour to the Federal Budget Crisis

You may have the sneaking feeling that there's something the presidential candidates aren't telling you about the federal budget. And you're right. Here it is:

Every expert who looks at the federal budget uses the same word to describe it: unsustainable. The federal government is $10 trillion in debt already, and is projected to run a half-trillion dollar deficit next year. Plus, there are huge expenses coming up as the baby boomers retire and start needing help from Medicare and Social Security. If we do nothing, the government simply won't be able to keep up with its obligations -- which could mean higher taxes, cuts in programs and a weaker economy for everyone.

You can see why someone running for president and eager to get every vote he can get might want to slide over this ugly little reality as quickly as possible. There's actually no way to solve the problem without cutting spending on things people like, or raising taxes to cover the coming expenses or most likely doing some of both. If you've been following any of the campaigning so far, you can easily imagine why Senators McCain and Obama aren't tackling this thing head on.

Unfortunately, what they're saying while they're out there soliciting our votes is likely to put the country even deeper into debt. Political campaigns want to talk about more for everybody. And right now, the best independent analysis shows that the campaign promises coming from both John McCain and Barack Obama would make the problem worse (but for different reasons).

This isn't some hazy, far-off, inside-the-beltway problem. The next president won't have any choice but to start dealing with this problem. The first baby boomer started getting Social Security checks this year. Medicare also dipped into its trust fund for the first time -- not for very much, a "mere" $8 billion -- but it's the start of a disturbing trend.

If the red ink keeps flowing and we don't make some reality-based choices on the budget and Social Security and Medicare, we could jeopardize the health of our economy and our standard of living. The choices we make now will affect the amount of your paycheck, whether you can get a college loan or home mortgage, whether interest rates are high or low and whether older Americans (maybe that's you, or your parents or grandparents) can make ends meet and get the medical care they need.

If we do nothing, the country's debt will be growing faster than our economy in about 15 years, which means we won't be able to keep up. By 2040, the U.S. would need nearly every dollar it collects in taxes just to cover the costs of Medicare, Medicaid, Social Security and interest on the debt.

But the pain will come long before 2040. Sometimes you'll hear politicians talk about Social Security and Medicare "trust funds" that will keep the programs running for years (until 2019 for Medicare and 2041 for Social Security). And that's true -- you really don't have to worry about your Social Security check failing to show up.

The problem is that the federal government has already used most of the money in the trust funds to keep its other operations running Instead of having nest eggs to draw on, Medicare and Social Security basically have IOUs from the government. And how will the government pay them? By raising taxes, borrowing, or cutting other programs. The problem isn't that people on Social Security won't get their checks, it's that the rest of the government may go broke covering them.

That's what the candidates aren't telling you, And frankly, maybe it's just as much our fault as theirs. When was the last time you voted for a candidate because of his or her tough stand on balancing the budget or frank talk about getting Social Security and Medicare spending under control? Not lately? When was the last time you ruled someone out because he or she dared to suggested cuts to Medicare or Social Security, or dared talk about raising taxes, not cutting them?

Candidates and voters have both been dancing around the nation's budget mess for years. Senators McCain and Obama are fudging the unpleasant facts. Most of the electorate seems willing to reward the one who weaves the most attractive tale.

To some extent, the next administration will be defined by money, or lack of it to be more exact. All those shiny new programs and tempting tax cuts the candidates are offering you need to be seen in that context. Yes, you can still cut taxes, but you need to starting whacking government programs left and right to pay for them. Or you can start new programs -- but the money's going to have to come from somewhere.

And you, the voter, ought to start thinking about what you really want because, one way or another, you'll end up paying for it.

©2008 Jean Johnson and Scott Bittle

Author Bio
Jean Johnson and Scott Bittle are lead authors of The Voter's Survival Kit, a series of election guides from Public Agenda and the book Where Does the Money Go? Your Guided Tour to the Federal Budget Crisis (HarperCollins, 2008). Public Agenda is a nonpartisan, nonprofit organization devoted to helping citizens tackle tough issues. The Survival Kit is available at


Public Agenda is a nonprofit organization dedicated to nonpartisan public policy research and civic engagement. Founded in 1975 by former U.S. Secretary of State Cyrus Vance and Daniel Yankelovich, the social scientist and author, Public Agenda is known for its influential public opinion surveys and balanced citizen education materials. Its mission is to inject the public’s voice into crucial policy debates. Public Agenda seeks to inform leaders about the public’s views and to engage citizens in discussing complex policy issues. It is also known for its destination web site,, which has been twice nominated (in 2005 and 2007) for a Webby Award for best political site.

Poll Results

I asked you in our last poll if the federal government should be in the business of bailing out big business. 41% of you said "never" while 40% of you said "sometimes". The remaining 19% thought the federal government should bailout Wall Street. I think
the problem with the bailout was that while this was clearly an example of uncontrolled capitalism run amuck and an absentee government watchdog, the greed was to wide spread for Washington not to step in. Too many “innocent” companies in America’s Heartland were affected. Too many jobs outside Wall Street were being lost.

What I strongly disagree with, however, is the bailout of senior management; the so called “golden parachute” option. It was those who were the folks, despite the Ivy League education and $1000 suits, drove their companies (not to mention their employees, who didn’t share in their wealth) into desperate financial straits through mismanagement, incompetence and/or flat out greed.


Anonymous said...

About that bailout... as large as it is, and much as it continues to expand, our next crisis will be much larger and far more damaging.

This current bailout will pale in comparison because the next crisis cannot be sidestepped by bailouts and cannot be healed with any type of financial band-aids, no matter how expansive.

The U.S. has continued taking on so much debt - including trillions of dollars in new debt incurred by bailing out gamblers in mortgage-based securities - that a point will come when foreign investors and nations begin to perceive U.S. Treasury bonds as having too much risk. So the Treasury will be forced into the process of raising bond rates in order to increase their appeal. They'll need to offset the perception of greater risk by offering higher returns on bonds, or those bonds will become effectively worthless without enough buyers in the world market.

Here's the problem. As bond rates increase by necessity, then the federal budget deficit also increases because the government pays higher interest rates to its bond holders. It's a classic Catch-22 scenario.

Treasury bonds will then take on a perception of carrying even more risk with the added debt load to government, so bond rates will move into a cycle of incremental adjustments higher. The Catch-22 will continue to expand until demand for U.S. Treasury bonds dries up because the perceived risk is too great.

(As an example - somewhat - who in their right mind would buy bonds issued by Zimbabwe, regardless that they might offer 100% interest, when Zimbabwe's current inflation rate is 11,200,000%... yes, 11.2 million per cent.)

With the raising of bond rates, the interest on fixed rate mortgages must concurrently rise; fixed rate mortgages are linked directly to Treasury bonds.

Anyone who remembers Jimmy Carter's presidency may recall that the fixed rate on mortgages went up to 18% during what was the worst recession since the early 30s; Treasury bond rates had also been pushed to peak levels. They may also remember that our federal budget deficit was under $100 billion at the time. Today it's over $10 trillion, and in 1980 dollars that's equivalent to over $25 trillion.

Mortgage rates drive the housing market, and after years of massive overbuilding and a current oversupply weighing down prices, today's housing market could be decimated by mortgage rates even a few points higher. And housing would become a wasteland with the kind of rates we saw in the late 70s and early 80s. Buyers would vanish, so prices would just about fall through the floor.

But if government debt continues to rise, then Treasury bond rates will also rise. And as those bond rates rise, then fixed mortgage rates must also rise. Hello, wasteland.

The bottom line is, we're headed into the same sort of severe recession we went through in the late 70s, and we're headed there with a federal budget deficit that is roughly 250 times higher than the deficit in 1980. And to top it all off, during the late 70s, the personal savings rate was about 8% in the U.S. Today it's somewhere between 1% and 3%, (depending on who's calculating), so we can repaint this very ugly picture by adding trillions of dollars in household bad debt on top of the tens of trillions in federal debt, and the problem is then more personalized.

Believe me, we haven't had our first glimpe at the worst in this economy yet.

There is a way out, however, but it involves practical application of common sense and it would be economically painful for millions of people. We'd need enough economic courage to allow companies - no matter how big - and individuals to go out of business or go bankrupt without any attempt to save them from it.

The pain and hardship caused by that sort of common sense financial approach would be awful, and the economic and personal hangover would last for years, but the country and broken economy would eventually get moving again and the system would be better than it was before we got ourselves into this mess.

We'd have more economic and personal stability in the common knowledge that bad business must go out of business, and that excessive spending beyond our means is not the road to prosperity. We'd learn the lesson that debt can offer the appearance of wealth, but appearances can be deceiving.

That said, I do not expect anyone to take the common sense financial approach simply because it guarantees a tremendous amount of almost immediate economic pain. What I do expect is that the politicians will continue taking on more debt for our country. And I expect they'll do it until the country is broken under the weight of it.

That's the bright side, by the way.

Another Opinion said...

Very interesting comment. You seem to have an excellent grasp of Economics highblue. What's your background? Any thoughts on what the public can expect a year down the road economically in either a McCain or Obama Administration?

Anonymous said...

Uh, excuse me ...

Here's the only thing one needs to know about dealing with the debt:


The hell with everything else.

This is the ONLY explanation that can pass muster as to WHY these fascists are behaving the way they are.

The economic slavery of U.S. Citizens will be complete WHEN the money supply is exponentially expanded.

The sheeple demand it, and the sheeple will get what they deserve.


Anonymous said...

I've studied money and investments throughout my entire adult life... basic economics comes with the territory.

As for Obama and McCain, in my opinion, the economic direction won't (can't) be substantially changed, regardless which one is elected. An economic crisis of unprecedented proportions in the U.S. has been stewing since 1973 when Nixon negated Bretton Woods by taking the dollar off the gold standard, so the economy our next president inherits will be a continuing reaction to past policy mistakes rather than any reflection of the current president's economic policy.

The current debt crisis is actually a delayed reaction to Jimmy Carter's Community Reinvestment Act which mandated affordable housing loans to lower income people, combined with Bill Clinton's policy of easy money for the same lower income sector and his hiring of both Rubin and Summers to manipulate the dollar stronger by intervening in the currency markets through the Exchange Stabilization Fund. Take those two policies, and then add to the mix the Democrats in Congress who blocked attempts to strengthen regulation on both Fannie Mae and Freddie Mac -- likely at Clinton's behest since he publicly stated they did exactly that, and he has a penchant for preventative denial to protect his legacy these days -- and the result is a recipe for financial disaster in the following administrations.

The next administration will inherit this financial crisis, and no interventional policy is likely to have a demonstrably positive effect because economic intervention is an intrinsically artificial means of attempting to manipulate a wholly natural situation in the free market.

Our free market principles could pull us through the crisis, but unless the free market is allowed to return our societal gestalt to a fiscally sane and balanced state in which debt is taken reluctantly, and bad debt leads to bankrupcy -- natural policies of the free market -- there can be no artificial manipulation which might produce a measurably positive effect for any extended period.

We're beyond the point at which artificial manipulation might help, and it was the artificial manipulation of timeless and solid economic principles that got us into this mess. If someone can't afford a house, then they shouldn't be offered a loan for a house. If someone can't afford a new car, then they shouldn't be offered a loan for a new car. If someone has a bad credit history, then they shouldn't be offered more credit cards with which they can increase their debt load.

It was the concept of easy money with the policy of offering much needed loans to lower income people, combined with the Federal Reserve over-printing dollars, supported by artificial manipulation to increase the strength of the dollar, and then compounded by each concurrent administration's reluctance to return sanity to the economic system during times when participants indulged themselves in frenzied buying sprees of consumerism, thereby driving up the GNP, which eventually culminated in this crisis. Now we're bankrupt, whether we realize it or not.

From an historical perspective, the foundation for our bankrupcy was laid in 1973, when Nixon took the dollar off the gold standard. In doing that, he effectively gave the Fed free rein to print as many dollars as the world could bear, which opened the door to continually rising inflation along with the secular trend to an ever-weakening dollar. After 1973, the dollar couldn't continue to maintain buying power against the onslaught of inflation, as it had done for decades before being delinked from gold. It held strength in the currency markets, but strength and buying power can be oppositional. They are intertwined, and are part and parcel of the same concept, but they can actually be in conflict with each other without a common mooring. Before 1973, gold had been the mooring for both dollar strength and dollar buying power.

A currency can be strong compared to other currencies, but inflation can eat away buying power even when it's strong against other currencies. So the dollar held strength even as it lost buying power, and citizens of emerging economies around the world began developing a taste for dollars as a means of offsetting instability or weakness in their own currencies. Upon that strength the Fed began freely printing with abandon and without much worry that an overbuilt dollar supply might come back to haunt them. Even though they're still somewhat blinded, this crisis is beginning to pry open some eyes to their own past mistakes.

Because the dollar held strong with international demand from emerging nations even after the gold-delinking, policy-makers in Washington toyed with the fantasy that the dollar might perpetually hold its strength, regardless how many were printed, and regardless that its support for buying power was represented by merely "faith and trust" in the U.S. government -- in politicians, that is. The flaw in the economic fantasy was the false assumption that strength and buying power are the same. So after toying with the fantasy, they became enamored of it when they saw the demand for dollars holding up.

The demand for dollars after the delinking from gold was the foundation for political idealogues who began believing it could remain strong with inherent potential to improve the financial conditions of less fortunate citizens in our country. In their collective mind, as long as the Fed didn't run out of ink and paper, they could print all the dollars necessary for a massive expansion of social entitlements and thereby pull millions of less fortunate citizens out of their financial straits. They consistently ignored the concept of buying power, preferring instead to perceive strength as buying power while ignoring the continued threat of inflation which gradually wears away dollar value.

The Bush Sr adminstration gave first notice of the dollar's lost buying power when they began a move to restate the CPI by using hedonistic statistical measurements to calculate the country's inflation rate, but the shift to hedonistic statistics was nothing more than a method to mask actual inflation and the dollar's lost buying power. The Clinton administration then took hedonistic statistics one step further by changing from arithmetical measurements for inflation over to geometrical measurements, while at the same time removing some of the most expensive items from the basket of goods used to measure the inflation rate.

For example, energy costs -- including oil, gas, and home heating cost -- are no longer included in the measurement for inflation. Housing costs are not included. Mortgage costs are not included. College tuition is not included. Certain food costs are not included. And these exclusions in the inflation rate calculation continue today. That's how the U.S. government could sport an official 6% inflation rate while gas at the pump went from under about $2 to over $4 per gallon. Or while the price of food rose about 40% in the last five years. Or while housing prices rose about 35% in three years leading into the peak of that market.

There are valid estimates by economists who claim the actual U.S. inflation rate is over 14% yearly. Most people might agree with those estimates, based on their own household budgets alone.

Why does government hedonistically massage statistics in order to present an unrealistically low inflation rate? Consider the dollar amount that would've been generated by the 14% inflation rate in terms of the cost of living increases to Social Security recipients or Welfare recipients, or the tens of millions of recipients in other government entitlement programs. If those checks had increased by the 14% inflation rate instead of the artificially generated 6% rate, then the U.S. government would've been technically bankrupt long before this crisis arose.

If the government had produced an honest number for the inflation rate, then the Federal Reserve never would've printed an oversupply of dollars. They would've been forced to tighten money supply and display some semblance of economic stability on the world stage in order for potential bond buyers to consider purchasing U.S. bonds. Along with that, money wouldn't have been cheap. The rate on bonds would've been much higher, so loan rates and mortgage rates would've been higher. With tight money, there probably would have been no boom cycle during Clinton's administration, so business could have suffered, although most of the suffering would've been borne by businesses on the tightrope of solvency.

There would've been no stock market bubble which, of course, also means there would be no after-effects from the bear market in stocks. On the other side of the coin, 401k plans and pension plans across the board would be considerably healthier today because most of those are privately-run plans rather than government-run plans.

The days of easy money never would've arrived for millions of lower income people who received government-backed mortgages with the help of Fannie Mae. They might've had more money in their pockets for a few years before the government was bankrupted by the increased payout in entitlements, but the party would've been short-lived. And their money problems would've been just beginning. Entitlements from A to Z would necessarily be forever modified to prevent government from being taken to the point of bankrupcy again, so the entitlement culture would've had to be weakened in order to strengthen the country.

The housing bubble never would've happened without easy money and an abundance of easy credit, which means there'd be no crisis in the subprime market right now. In fact, the subprime market would've never come into existence.

Why does government actually need to hedonistically massage statistics in order to reflect an unrealistic rate of inflation and thereby save itself from added trillions in entitlement payments? Because the dollar has lost nearly 75% of its buying power due to the ravages of inflation since it was delinked from gold in 1973. Delinking the dollar from an asset which is historically impervious to destuction by inflationary moves is the essential cause of its deteriorated value today -- value is buying power, and inflation destroys buying power. Once again, anyone with a household budget is well aware of the effects of inflation on buying power.

So going off the gold standard in 1973 was actually a precursor to all the following economic decisions which eventually lead to overvalued stocks and overvalued housing. Assets required more undervalued dollars to purchase, and the dollar became increasingly undervalued without gold to support it. When the dollar was on the gold standard, the Fed could only print enough dollars to equal the U.S. Treasury's gold holdings, so during that time the dollar held both strength and value. Today, while it may hold strength through manipulation in the currency markets, it can't hold onto its value due to the ongoing effects of inflation.

As I said, there's nothing that either Obama or McCain can do to prevent the financial pain that most U.S. citizens will feel in coming years... that's a done deal. What we're experiencing now is the result of 35 years of bastardizing and manipulating free market principles under a currency unsupported by any underlying asset other than mere "faith and trust". We've been living an economic daydream... maybe more appropriately, we've been smoking for 35 years and now we're seeing the first signs of emphysema.

One of them could, however, reinvigorate the concept of political and economic honesty in this country. But that would require a movement to return to the gold standard, which would be the best thing any politician could do for our country in this crisis. It would also require a hard look at entitlements, but that'll become an absolute necessity in coming years because there's no possibility whatsoever of paying full entitlements to both Welfare recipients as well as the largest generation in world history, the Baby Boomers, who will rightfully expect government to pay their Social Security and Medicare in full rather than partial payments. After all's said and done, Baby Boomers have invested their own money into our communal system of entitlements whereas recipients in other programs have not matched the Baby Boomer investment. So the Boomers will demand priority in entitlements, and rightfully so, rather than accepting any sort of IOU for their money that government effectively borrowed from them. The government literally owes Baby Boomers a debt while, on the other hand, it literally subsidizes other recipients who have not lent their own money to government.

The debt that government continues building is completely unacceptable from an economic perspective. It can only lead to financial destruction. In a sense, it's similar to someone with 40 credit cards, all maxed out, who just lost their job.

There are quick fixes, but they come with a price. The government can devalue the dollar by 90%, which would be akin to personal debt negotiation, and then never again expect to act as a safe haven for the world's financial assets. It would mean the dollar would no longer be the world's reserve currency, oil would no longer be denominated in dollars, international financial transactions would cease denominating in dollars, and therefore no foreign central banks would have the need to hold our dollars in reserve -- one of the reasons it retains strength and buying power. At that point the Euro would probably replace the dollar as the world's reserve currency.

Or they can default on Treasury bonds, which means defaulting on their debt, but that's a path to certain financial ruin and it would guarantee that we'd acquire the economic status of a third world country in world markets, not to mention it would destroy countless retirement and pension plans in our country and worldwide.

Those are hard pills to swallow, but I see no other quick ways out, and either way it went, we the people would have to foot a very hefty bill for it.

There are also slower fixes for the problem, but they'd require a great deal of personal courage, self-reliance, and an enormous sense of charity among a majority of citizens. We would have to become united in the goal of saving our country and thus saving ourselves. Patriotism would have to become the overarching ethic in a cause of returning ownership of our country to the people. It would require sacrifice and hard times for the vast majority of people in our country. People who receive government entitlements would have to be willing to sacrifice a large percentage of their entitlement money, so they would become dependent on family, friends, and community charities for support and assistance during those hard times.

I may be cynical, but I don't see that happening. People won't willfully give up their entitlements, especially with the suspicion that their government would take its savings and spend it wastefully, and particularly considering that our entitlement culture is so deeply ingrained in our system and collective psyche. It's part of us, but it's killing us, so if we as a country are to survive relatively intact, then the entitlement culture will be exorcised by some situation, circumstance, or influence beyond our control... and beyond government control.

The way I see it, the survival of our economic system is currently being removed from our control, which should also imply that the control will be out of the hands of either Obama or McCain.

It will not decided by either of them if our system survives with scars, or if it will collapse. The decision will be made by free market forces which are ultimately in control of every economy, over and above government intervention or manipulation. History has been exposing free market truisms to economists for centuries, and yet they still choose to theorize that the free market forces should be manipulated to advantage... it's just our present day economists' turn to learn a timeless lesson.

Unfortunately for us, economists often tend to forget they're not living in a bubble of theory when they promote any economic policy that might affect the rest of us.

Anonymous said...

I chose to omit something because it didn't seem appropriate at the time, but after reading it again, I'd include an addendum.

The necessary unifying of citizens in order to save ourselves and this country would be impossible under the current condition of extreme polarization between liberals and conservatives. The extremists on both sides will be quick to blame the other after a financial meltdown situation, so polarization will likely become even more intense and emotionally charged.

In that situation I'd expect some form of social upheaval along the lines of class warfare... I mean warfare in the literal sense.

It gets worse, but I imagine that I've overexpounded on my pessimism more than enough for one day.

Anonymous said...

The current debt crisis is actually a delayed reaction to Jimmy Carter's Community Reinvestment Act which mandated affordable housing loans to lower income people,...

-In other words, its the black guys fault??? LOL!!!!

Oh please, stop with the Tim McVie /Right-Wing Wacko stuff.

Goverment, baaaad!!!
Deregulation, gooood!!!!

Thats how we got into this mess in the first place.

Anonymous said...


Apparently you stopped reading right after "Jimmy Carter... low income people..."

The fact that you presume "lower income people" applies exclusively to African Americans when you wrote "In other words, its the black guys fault??? LOL!!!!" says far, far more about your own prejudices than any racial bias I might have.

If you'd continued reading, then you might know there was no mention of skin color or race. That's because "low income people" means exactly what it says - low income people - and income is not exclusive to race. If you happen to take a trip through Appalachia sometime, then you may understand that fact.

The rest of your comments are not worthy of response, but to imagine that there was racial bias in my remarks indicates that the door to your mind is pivoting on a rusty hinge.

Anonymous said...


I don't know if you want to post this on your blog or not, but the following email arrived from Jim Sinclair today. Here's an excerpt from it. (Jim won't mind.)


There seems to be some degree of assumption that each action by the Fed brings the credit lockup closer to being corrected. There are many challenges to this assumption.

Will banks use funds to patch up their pillaged balance sheets or actually start loaning in a progressive manner? The answer is balance sheet as they really have no alternative.

As in the case of AIG, is any cash bailout enough to bail out losers? We need to remember that what OTC derivatives do not do to financial or any other entity, the drop in earnings will. Whatever is left over, litigation will pick the bones clean.

Regulators went from 12 to 1 leverage to 40 to 1 leverage where a 2-½% change in total asset value would bust financial institutions. The losses taken are not bookkeeping, but are hard and real.

The only thing bookkeeping did was allow these losses to be maintained in full value because they were OTC derivatives, not listed derivatives with a clearinghouse guarantee.

Clearinghouses demand losers pay in and winner are paid out daily while there is no such facility for OTC derivatives. Because of no clearinghouse function, banks and other entities carried the declining value in OTC derivatives at full value at 40 to 1 leverage.

The bailout funds are simply putting a thumb into the leak in the dyke as more holes open up from earnings declines, slow business and serious litigation.

The TIC report is looking quite bad, indicating that dependence on non-US entities to finance a budget deficit that is about to go ballistic cannot be depended on.

All that we have seen is emergency action without limits to hold financial zombies from being discovered by the general public. The US Fed is, in fact, holding up the entire world that is near and dear to them. One of the methods is through swaps, which are a form of OTC derivatives and just like the disease, are off balance sheet items.

There is no limit to what the US Fed and Treasury will do in the next few months. It will be discovered in the not too distant future that the US dollar has moved into critical oversupply. At that point expect to the see the US dollar drop like a stone and gold trading at $1200 and $1650.

The US dollar will see.72 again prior to .62 and .52.

The limiting factor to the present terminal financial condition under the Fed and Treasury bandage bailout is the US dollar. There is no escaping the event of publicly recognized dollar oversupply, the ineffectual nature of bailouts and the appearance of hyper-inflation in the midst of non-recovering business conditions.

Keep firmly in mind that retired Chairman Volcker has described this situation as "We have a failed financial structure." He went on to describe the condition of the financial situation as "Code Blue."

What you see now is only the beginning of a great economic drama, out of control and nowhere near its end.

This is it. It is now!

Gold is the only entity that has the capacity of insuring your future buying power, maybe even more.

Enough said.