Time is NOT on their side – Letting off steam

Back in ’08 our politicians thought they had time. They no longer do. Time is NOT on their side now.

Wednesday evening the DOW fell like a stone in the final 15 minutes of trading until it touched down to the low we were at in ’09. This is after several previous days of very large losses on markets around the world. After two years and several Trillion dollars and euro’s printed and borrowed, there IS NO recovery. Nor will there be one. What hasn’t worked in two years is NOT going to work in the next two.

What will happen, is we will be pushed down into bottomless debt in order that the poor should pay off the debts of the wealthy. We will be expected to dismember everything that previous generations fought to build up,

Back in ’08 the bankers felt there was time enough to be able to wait for a natural recovery of house and asset prices. The collapse, they argued, was irrational and due more to fear than fact. There had been a bubble – sure. It had burst and some correction was in order. But the correction would bottom, and with a little help from the public purse, to get them over a bottle-neck in cash flow and inter-bank lending, which together they saw as a problem of liquidity only – after a little help, then markets would resume and assets would regain their value.

And that was how it was presented to us. Only it wasn’t quite true. It wasn’t just a few mortgages and a few ‘assets’. What had been created from those mortgages and corporate debts was a whole new international, debt backed paper currency. The banks very own creation. The ultimate expresion of and embodiment of a newly created power. With this new currency and their almost limitless ability to create it, at will, without any oversight by any nation, the financial world had established itself as a new kind of trans-national power. A power unto themselves.

They has created a source of power and wealth that transcended the Nation State. They had issued more ‘money’ than all governments put together. They had created a system of debt backed money, that had enveloped all previous manifestations of power, wealth and capital. But then it imploded.

It imploded because they had also debased their creation. They had passed off tin mortgages and tin derivatives as gold. Wrapped them in a veneer of fools gold a micron thin that the insurers said would make them all AAA good. But when the crash came the insurance failed.

The bankers found not only had the they sold their debased, debt backed paper currency to every corner of the financial world, but they were also holding trillions of dollars-worth of it themslves. Held as debts, derivatives based on those debts and bets on those derivatives.

The bubble bursting was in fact the implosion of faith in and value of their currency. But if they admitted this, or even allowed the problem to be seen in this way, then this crisis would cease to be a ‘sub-prime’ crisis. It would be the destructyion of nearly every cent of wealth that was denominated in and held in the bankers currency. In short they would all be ruined, utterly and completely. Not just the banks they worlked in but all those who held the banks currency. All of the bankers personally, all their friends all their families. Their entire world of power privilege.

The bankers knew this wasn’t a correction, nor just a bubble. This was potentially the eradication of everything they had created – power, wealth, the lot.

‘THE’ world was not going to end. But their world was. What would be left would be a world that would work without them, would have banks they did not own, and would picked itself up from the terrible destruction THEY had caused.

They may not have realized this right at the beginning. They may well have thought as Bernanke and Paulson said at the time, that ‘sub-prime was contained’. But when it was clear that is wasn’t, then they knew they had to lie – about what had happened and how to fix it – and thought perhaps it would take a trillion dollars, taken from the public, to make the liquidity lie work. And when it didn’t they thought maybe another trillion. And then another. And now maybe several more. They can’t stop. They have to double down and double down again. Or they get called and lose.

And so they will not stop lying.

Two years on, none of those ‘assets’ and house prices have regained even a fraction of their value. BUT those holding all the depreciated assets and mortgages all the worthless paper, have refused point blank to admit they have suffered a loss. Instead they have connived with politicians to allow them to hide their losses behind a wall of accounting lies. And they have put you and I into debt to pay their debts whenever they can no longer be hidden.

The fundamental root cause of the cancer that is eating away at the face and body of everything decent in our society, reducing it down to a sewer of rats fighting for scraps, is a single festering lie. The cause of this endless and deepening crisis is not liquidity but insolvency. Liquidity is a lie and therefore so are the reasons we have been given for the bail-outs.

The truth is, there is no good news coming. There is instaed, a slow tide rising of bad and terrible news heralding another drowning in losses, write downs and wealth destruction. The call will go out again for yet more public money to be bled from us for the sole purpose of keeping the banks and financial class from having to suffer the consequences of their stupidity and their greed.

There is no question that our failed political class will agree. The ONLY question is whether we are going to. Will we knuckle under and let the bankers win? Or will we stand and fight for what is decent and true and honourable?

This will end at the ballot box or in the street. But it will end.