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Six
Syllables to a Savage Truth
By
Stewart Dougherty
On
December 9, 2008, $65 billion of investor money was at peace. On the
fear / greed seesaw that is said to characterize investor emotion, fear
was down on the ground, while greed was high in the sky, having all the
fun. Greed was earning a steady 1% per month, making fear look like an
over-cautious fool.
On
December 10, 2008, six simple syllables transformed that greed into
lead, sending it crashing to earth while launching fear to the moon.The
syllables were these: "It's
all just one big lie," and they
were spoken by Bernard Madoff, in an admission that his investment fund
was nothing but an illusion and a fraud. They represented a savage
truth that would wipe out the savings of thousands, and toll the bell
for the rest of the world's investing public.Those
six syllables possessed powers far beyond their size. They forced
$65,000,000,000.00 to vanish back into the thin air from which they had
materialized. Thin air has been busy these days, as you will see.
The
fact that a mere six syllables could cause a multi-year,
$65,000,000,000.00 fraud to implode is testament to the truth's
simplicity and power. The truth represents intellectual gravity, and
sooner or later, all things fall into its arms, whether they want to or
not. The truth does not need phalanxes of lobbyists, czars, public
relations personnel, pundits, pontificators, propagandists, pollsters,
or politicians to express itself. Rather, it represents magnetic north,
toward which the human consciousness is naturally inclined. In the
beginning of the revelation of a truth, only those with courage can see
it; in the end, it is clear to everyone.
[Editorial
note: In this article, we will express numbers in digits. The
government, financial "services" industry, and television talking
heads, to name a few, are currently bombarding society with the terms
"billions" and "trillions." The constant repetition of these terms has
given people a false sense of familiarity with them, and made them
appear "normal" and "everyday." These colossal sums are anything but
normal and everyday. They are monsters that are tearing apart our
fiscal, financial and monetary systems. Those who casually throw around
a trillion here and trillion there, such as the steady parade of CNBC
commentators, try to act as if they understand the magnitude and
implications of these sums, but they don't, because the sums are
incomprehensible and their systemic consequences are totally unknowable
and unpredictable. This is patently obvious given the extreme financial
crisis afflicting our nation and the world. Also, only "two" of
something, such as trillions, doesn't seem like very much to most,
whereas the written expression of that same number, in this case
$2,000,000,000,000.00, does.]
Compared
to current fiscal, monetary, economic and financial reality in the
United States, Madoff's losses were modest, even quaint.The
USA's fiscal year 2009 federal loss (which is euphemized for the masses
by the term "deficit," which sounds technical, econometric, and not
nearly as bad as what it really is, a loss) will exceed
$2,000,000,000,000.00, more than 30 times Madoff's $65,000,000,000.00
loss. Keep in mind that it took Madoff a professional lifetime to lose
that money; the United States will lose $2 trillion in just one year,
and according to official budget projections will continue losing
hundreds of billions more, annually, for decades to come. (More on this
in a minute.)
The
cost of the government's financial-crisis-related bailouts and
guarantees currently exceeds $13,500,000,000000.00, which is 200 times
larger than the Madoff scandal. And the nation's unfunded contingent
liabilities, for programs such as Social Security, Medicare, Medicaid,
government pensions and the like stand at $75,000,000,000,000.00, 1,150
times larger than Madoff's fraud. They should let Madoff out of jail
and put him in charge of the Treasury. Maybe America could get some
relief.
Of
course, these numbers make laughable the government's righteous
indignation and shocked disbelief that a "Ponzi scheme!" as "large" as
Madoff's could have operated in the United States. The government's
response is a textbook example of the intelligence industry's
attention-diverting technique known as misdirection.
In
June, 2009, the Congressional Budget Office, a government entity,
issued its "Long Term Budget Outlook" for the period 2010 through 2080.
The executive summary begins with these words: "Under current law, the
federal budget is on an unsustainable path -- meaning that federal debt
will continue to grow much faster than the economy over the long run."
While
that statement might seem stark, it is the verbal equivalent of
morphine compared with the actual numbers in the CBO's long term budget
projection, which are nothing short of terrifying.
According
to the CBO, over the next SEVENTY fiscal years, the federal government
will NEVER have a surplus. Rather, the United States will continue to
suffer massive, escalating, multi-hundred billion dollar losses
("deficits") each and every year for the next SEVEN DECADES, which is
when the budget projection stops. Under both CBO budget scenarios
(catastrophic and worse-than-catastrophic), losses in fiscal year 2080
will be the largest of the entire 70 year series, meaning that the
budget crisis will continue well beyond 2080. In the best case, the
2080 loss will be 17.8% of GDP; in the worst case, it will be 42.8% of
GDP. To put this in context, the 2009 federal budget loss is projected
to be 11.9%, in this, the worst financial crisis in American history.
So 2080 will be 50 - 300% worse than now. Who the CBO thinks will fund
these trillions of dollars' worth of forever losses, they do not say.
Apparently, America is headed back to the Stone Age, thanks to our
profligate politicians and corrupt financial elite.
The
United States has already reached the point where it is arithmetically
impossible for it to pay its debts or keep its promises, unless it
devalues its currency to the point where it impoverishes its citizens
and creates international financial chaos. And even devaluation as a
means of ending the country's budget nightmare will be difficult, given
that so many government programs have cost of living escalators, making
inflation a No Exit horror story. This is not subjective opinion, but
rather objective, arithmetic fact, now supported even by government
agencies themselves, such as the Congressional Budget Office. As John
Williams of shadowstats.com has observed, even if personal incomes were
taxed at 100%, the United States still could not pay its bills.
Astonishingly,
given this fiscal context, the government now proposes to effectively
nationalize the nation's health care industry, with projected
additional losses of $1,000,000,000,000.00, a number we can be 100%
certain will prove to have been grossly understated. Additionally, it
has created $13,500,000,000,000.00+, so far, to bail out Wall Street,
at the direct expense of America's citizens, adding to the nation's
debt misery and hopelessness.
All
the while, government has looked on with apparent admiration, envy and
awe as Goldman Sachs announced that despite America's financial
catastrophe and despite the fact that it gorged earlier this year at
the feed trough of taxpayer bailout money, they will reward their staff
with record bonuses in 2009, totalling some $20,000,000,000.00. They
are taking the taxes paid by everyday people such as nurses, teachers,
auto workers and fast food clerks, and stuffing their pockets with it.
Of course, that is just the tip of the iceberg. The rest of Wall Street
will lavish itself with taxpayer-funded bonuses, too.
Even
more astonishingly, on June 26, 2009, in the midst of America's
employment and economic meltdown, Congress approved $108,000,000,000.00
in loan-guarantee funding for the International Monetary Fund (IMF), so
the IMF can provide financial assistance to "poorer nations." No
citizens on earth are as indebted as Americans, given the nation's
$11,500,000,000,000.00 federal debt, and more than
$85,000,000,000,000.00 of combined federal debt and unfunded contingent
liabilities. So how the world's most indebted nation proposes to
provide assistance to "poorer" nations is a fiscal mystery, the
solution to which is apparently known only to the spendthrifts in
Washington. Unless, of course, the money were slated to return to the
United States as "foreign aid," but that is not the plan. What
arrogance, callousness and conceit on the part of our government, to
strap this added tax burden onto the backs of American citizens, who
are already the most debt-enslaved people in the world.
The
IMF funding is in ADDITION to the government's June 26, 2009
$106,000,000,000.00 supplemental war appropriations bill, which was
supposedly meant to pay for continuing military operations in Iraq and
Afghanistan, but which includes U.S. taxpayer gifts of $660,000,000.00
for Gaza, $555,000,000.00 for Israel, $310,000,000.00 for Egypt,
$300,000,000.00 for Jordan, $420,000,000.00 for Mexico, and
$889,000,000.00 for the United Nations, for so-called "peacekeeping"
missions. War is peace. Orwell must be laughing himself sick, six feet
under.
Congress
is in such massive denial about the fiscal and financial crisis they
have already created that their spending orgy continues without
restraint. In fact, the out-of-control spending is now so outrageous
that one can seriously argue that Congress, the Treasury and the Fed
are deliberately trying to destroy the United States. Bob Chapman (www.theinternationalforecaster.com), a brilliant analyst and publisher
of one of best newsletters in the world, has long argued that what is
happening is part of a systematic plan to bring this country to its
knees so a one-world government-for-profit, owned and operated by
global power brokers can be implemented. His ideas deserve
deep and thoughtful consideration, because his track record thus far
has been nearly perfect.
The
fact is that the United States is suffocating in what has become an
airless House of Lies. Social Security is a promise that cannot be kept
with anything even remotely resembling America's current "money," and
is therefore a lie. Medicare and Medicaid are promises that cannot be
kept, and are also lies. SSI benefits cannot be paid into the future,
and are lies. The federal debt cannot be paid, and is a lie. Government
pensions cannot be paid, and are lies. The prescription drug program is
unaffordable, and is a lie. Food stamps and other forms of welfare are
unaffordable, and are lies. And the list goes on and on.
Arnold
Toynbee wrote, "An autopsy of history would show that all great nations
commit suicide." This is exactly what we are witnessing today in the
United States: fiscal and economic suicide. As America's "leadership"
injects financial poison into the country's veins, the citizens stand
by and watch, having not a clue about what to do to stop the
destruction. Today's unavoidable reality is that tens of millions of
American citizens are going to die financially before they die
physically, thanks to government losses and crony payoffs that enrich
and empower a small, shameless, greed-stricken minority at the expense
of the entire nation. This latter point is amply demonstrated by
Washington's race to Wall Street's defense via the recent bailouts,
where trillions of taxpayer dollars were handed over to
centimillionaires for nothing, while for the past 20 years, it stood by
and did nothing as the lives of millions of American workers were
turned upside down when they lost jobs that migrated overseas thanks to
state-sponsored globalization, another moronic and disastrous market
intervention.
Despite
the CBO's calm outline of the next seven decades' worth of ceaseless,
staggering American operating losses and surging debt, we are fast
approaching endgame. One of the greatest prize fights in all of history
is about to begin. In one corner of the ring will be a scrawny,
sick-looking contender called The Lie, coached by Washington, D.C. and
Wall Street. In the other corner will be a 250 pound, aerobically
perfect, experienced fighter called The Truth, coached by the
collective wisdom, experience and technique of Time. Once the fight
starts, it will be over in a second. The same way Madoff's fund was
knocked out with one punch, once he put his Lie into the ring with The
Truth.
Speaking
once again of Madoff, as a citizen, you must ask yourself this: what if
an official at the Federal Reserve
or the Department of the Treasury woke up one morning, seized by his or
her conscience? What if this official could not continue to lie about
America's finances?
What
if, in a moment of personal honesty and catharsis, that official
repeated in public, say, at a Congressional hearing, those six simple
syllables spoken by Madoff? What if someone in authority admitted that,
"It's all just one big lie"?
What
would happen to the bond market? The stock market? The financial
system? Your local bank? The Federal Reserve Note? It seems logical
that all of these would all suffer, probably mightily. And the prices
of gold and silver? Wouldn't they go up, potentially by an order of
magnitude, as millions scrambled for financial sanctuary?
The
financial laws of gravity are exactly that: laws. The narcotics of hope
and denial cannot repeal them, just as they cannot make a butterfly
turn into a 747, convert lead into gold, make America's debt disappear,
or transform Bernanke into a mangod who can make the consequences of
gross fiscal and economic dereliction go away, just because he says so.
The
financial laws of gravity say that it is impossible to indebt a society
into prosperity, or moneyprint everyone rich. In fact, reality says the
exact opposite: endless debt and money creation impoverish and enslave
a people, while enriching to a grotesque degree a relatively few
opportunistic, immoral, greedy, insider manipulators, just as we have
seen and continue to see.
If
government were genuinely trying to fix this mess, then perhaps we
could have some hope, even though we are already beyond the fiscal
point of no return. But recent actions, such as the June, 2009
$108,000,000,000.00 ($108 BILLION) added funding for the IMF, and the
proposed nationalization of health care, to cite just two relatively
minor examples, demonstrate that Washington is, at best, incapable of
recognizing the seriousness of the country's circumstances, or, at
worst, is spending us into oblivion on purpose. (Collectively, could
they really be this reckless, stupid and destructive? Is that
conceivable? Or is something far more evil and diabolical at work?)
Pinning one's hopes to "change" is an act of insanity given the
situation. The only change in America is the total lack of it.
There
is a solution: It is called the truth. The United States government
must irrevocably admit that its wanton, escalating experiment with
socialism, which is now veering into something even more sinister,
called corporatism, which is another word for fascism, has failed
catastrophically, just as it has failed every other time throughout
history that it has been attempted. And the people must be told that
this nation can return to greatness only if they and their government
will re-embrace the virtues that made it great in the first place:
honesty, responsibility, restraint, ingenuity, hard work,
self-reliance, morality, character, dignity, honor, duty, sacrifice,
patriotism and an abiding belief in something greater than ourselves.
Each
reader can make his or her own decision as to whether America and its
"leadership" will have the strength to face the truth, or not. If they
do not, then we will soon enter a period of personal and financial
survivalism. If you believe that the nation will not face reality, then
you must immediately begin to put your affairs in order. Those who
think ahead will be able to survive the whirlwind that denial will
unleash. But those who stand before such a tornado, unprepared, have
poor and more likely tragic prospects. The odds that you, the reader of
this article, will find a way to prevail are good. But unfortunately
for your fellow citizens, you are in a small minority. You are
distinguished by courage, thoughtfulness, an ability to face facts,
resourcefulness, and a genuine concern not just for yourself, but for
all who are dear to you. Those virtues were required to get you to this
point in this difficult article. Those same virtues will save you as
the flag of the future unfurls.
July
10, 2009
**********
Stewart
Dougherty is a specialist in inferential analysis, the practice of
identifying patterns and trends from specific, contemporary events, and
then extrapolating their likely effects upon the future. Inferential
analysis can be highly predictive. Dougherty was educated at Tufts
University (B.A.) and Harvard Business School (M.B.A., and an academic
Fellow). He can be reached at: trident888@....
He is not affiliated with or compensated by those he references or
recommends. The reader has permission to share or post this article as
desired, as long as the content remains unchanged and the author is
acknowledged. Copyright 2009 by Stewart Dougherty, with all rights
reserved.
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