Posts Tagged ‘fannie mae and freddie mac’

About The End of the Dollar

Monday, July 21st, 2008

A well-known scientist once gave a public lecture on astronomy. He described how the earth orbits around the sun and how the sun, in turn, orbits around the center of a vast collection of stars called our galaxy.

At the end of the lecture, a little old lady at the back of the room got up and said: “What you have told us is rubbish. The world is really a flat plate supported on the back of a giant tortoise” The scientist gave a superior smile before replying, “What is the tortoise standing on?” “You’re very clever, young man, very clever,” said the old lady. “But it’s turtles all the way down!”

The Financial System of the World is a special version of “Turtles all the way down“. At this moment one of the pillars of the US Financial System (Fannie Mae and Freddie Mac) is falling and many people hope it will be supported by a financial pillar, the US Government. The two pillars have financed 5.2 trillion dollars of mortgages (5.200.000.000.000).

Since 1970, the US Federal Government has run deficits for all but four years (1998-2001) adding to a total debt of 9.5 trillion of dollars (9.500.000.000.000). If you include entitlements such as Social Securityand Medicare the debt is $53 trillion—or $175,000 for every American—andrising.

A huge part of the debt is held by two pillars, the central banks of Japan and China. The Central Banks of China and Japan are slowly moving out of the Dollar. This pillar is falling also.

The Citizens of the US are the only turtles that are left. The US Government could raise taxes, reduce its spending or raise the interest rate. In all the cases the US Economy would fall into a recession. They are unable to do this. The US voters will never elect an American President who is raising taxes or will move its country into a recession. They will always vote for the Big Spender.

Below the last pillar is Emptyness, the Abyss, The Underworld, Hell. The Universe is floating in Nothingness. The Universe is floating because it is moving. Movement is the essence of the Universe.

The problem of Turtles all the Way Down (Infinite Regress) can be solved in a Circular, Rotating, Cyclic model. In a Circular model there is No cause and there is no End. Every point is a Beginning and an End. Every Cause comes back on Itself. In the End the US has to solve its own problems and the only way to solve its problems is to accept a Recession.

The US Financial System has generated a debt for more than 30 years. They were supported by other countries to expand their economy. These countries needed the US as a buyer of their products. They also needed the US to copy their Technology and their Science.

At this moment the Economic Activity in the World is moving to the East. The countries that supported the US the most, Japan and China, are now creating their own Cycle and their own market. This cycle is completed by the addition of India and Russia. In due time they don’t need the US Market, the US Technology and US Science anymore. The US has given them all the opportunities by Outsourcing many of their activities.

Japan and China are becoming friends again and they have their finger on the trigger of the financial gun. When they move into another currency or create their own currency the US financial system dies immedeatly. They don’t need a war to win the war.