Next Revolution: The Second American Revolution

The next great crash is upon us. The stampede of capital out of bonds and into equities yesterday was matched by a stampede into commodities today. Dollar value plunged around the world, and gold again crossed the 950 mark.

This instability reflects the true lack of value of all assets in an American economy with insufficient wealth, or potential earning power, to offset the massive underlying debt below both American consumers and corporations.

Gietner's massive devaluation of the dollar yesterday merely revealed to the whole world how nakedly broke our financial and economic systems really are.
 

All of these market moves were in responce to inflation fears. It was less than a week ago that Chinese Primer Wen warned the US to preserve the stability of China's investments in American treasuries, and Wen did not even mention the billions in losses their equity investments had already suffered during the last five months.

Gietner just gave Wen his answer, a whopping 4% decrease in the value of all their American holdings.
 

On top of the equity losses that we have seen recently, and the bubble-like rise and instability of bond market prices due to volitile movements of vast sums of capital, there is the already massive and rapidly balloning Federal liability for freddie, fannie, AIG, as well as the necessity to fund the vast credit line the fed has extended to public and private banks during the last nine months. And let's not forget the last two "stimulus" plans, the first of  which put trillions into the hands of the biggest thieves in our nation on Wall Street, and the second which bailed out the second tier of Corporate Bribers, the Construction Industry.
 

Two weeks ago I said that that amount of debt, somewhere between 8 and 12 trillion dollars, depending on which source you trust, was sufficient to spark a bout of financial hyperinflation during a period of economic deflation.

Prior to that point of time, I pointed out that it was,
 
""...no longer in China's economic or strategic interests to buy American Treasuries at exactly the same time that the government's demand for funds to bailout freddie, Fannie, and the banks is reaching a fever pitch. If the expanding economic meltdown in China's markets continues, they may begin selling US Treasuries."
 

Geitner just told the world that we will print money as much money as it takes to buy our own debt. This is the last gasp of a failed system. We have seen this policy used before in inter-war Germany, and recently we have watched it unfold in Zimbawie. But this move has been made at the center of the world economy, with the currency that undergirds international trade.

This means that the third-world is about to plunge into hyperinflatation. The repercussions from these moves will not be contained in the economic sphere. There are going to be serious political repercussions that are going to alter the world balance of power.

This last move by our Corporate State is going to generate global inflation significant  enough to raise political resistance sufficient to change the terms and costs the world will extend credit to the US upon, as well as strengthening burgeoning regional efforts to replace American currency as the global medium of exchange. This will be sufficient to threaten the influence, if not the existance, of every American-backed regime in the world.
 

America is no longer a good investment. We still have to fund the trillions of dollars that the Fed printed for all of their previous bailouts. The combination of the debt load of the last bailouts and this devaluation are sufficient to completely undermine the world's faith in US debt. This will add a withdrawl of the world's credit to our already tottering debt situation, which will essentially crash the dollar.
 

We are approaching the ultimate "reveal," which I predicted in July, 2007, where financial inflation would be backed by economic deflation, the economy would be mortibound, and the dollar would reach $1.75 a Euro.

The path to our present position has been convoluted, and we have wasted trillions of dollars in bailouts to the richest theives in the nation, to no effect but to delay and deepen the final recokening.
 

The nut of the problem that we face today is not just an economic crisis. We decided decades ago to take the path of irresponsible concentration of political power and wealth, all based on irresponsible growth that did not pay its own social costs as the population swelled.

Instead, our massive demographic expansion was used as the main tool to fuel the stripping of our middle-class wealth, and its concentration on Wall Street. The bastards on Wall Street have used a portion of these stolen funds to lavishly bribed all the national politicians on both sides of the asile.
 
Our whole economic and political process has been based on this irresponsible expectation that we could grow endlessly, with an endlessly expanding  economy, endlessly expanding profits, and an endless expansion of profits, all made while not paying the basic social costs of doing buisness. This unconstitutional and unwise system of top-down political power and ownership, this is the system that Obama, Congress and the Fed are trying to bailoutbut.

This is a crisis in the center of our political process, and until we fix the bribery and corruption which have corrupted both parties and captured our government, we are going to continue to suffer.
 

I've got to go now, but I will return in a few hours to rewrite/complete this analysis. I finally got a little labor job, so the finish will be slightly delayed