Suspected it from the start, and now we’ve got proof – the Financial Times is reporting that foreign banks were among the largest beneficiaries of federal bail out cash. What this means, fellow American taxpayers, is that our liabilities were increased in order to prevent banks like Barclay’s from going under.
In the end, of course, it won’t work – the Federal Reserve admits to funneling $3.3 trillion in to domestic and foreign banks (I’ll bet its more than that) and the banks are still insolvent (through “extend and pretend” they are prevented from going in to bankruptcy – but broke they are). In fact, the entire financial system of the world is wrecked – and can’t be fixed because there is too much debt chasing too little wealth.
The only questions we have are:
How long can they keep it up before it completely falls apart?
Which nation will be first to default?
You can’t borrow and spend your way to wealth – only hard work, savings and careful investment can do that. There are no quick fixes – what we’ve been doing for nearly a century now (really, since the end of the First World War) is going for one quick fix after another. More fiat money, more usury, more taxation, more regulation…more of everything except common sense. The bill has now come due – we can put it off by taking out what amounts to a national pay day loan, but we can’t stop it from happening.
Just get ready for it – save as much as you can, and hope to goodness that we don’t have to go through a bit of hyper-inflation on the way to the poor house (I don’t think we will, but some rather sharp observers think there is a chance of it).
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