Financial Reform passes, criminals gone wild. Arm yourself with knowledge.

It has been a very busy week with some good news and bad news.  Good news include Rand Paul winning the Kentucky primary and ousting the GOP establishment candidate.  Bad news include Peter Schiff getting completely shut out in CT, stock market sending dangerous signals of an incoming sell off in the next few months and Scott Brown showing his true colors and breaking the filibuster enabling the passage of the so-called Financial Reform (59-39).

But there is nothing to celebrate.  In this liberal soup only the big corporations and power hungry Statists benefit while the average man suffers under the growing weight of a growing Government bureaucracy and an ever increasing financial oligarchy.  Gone are the audits of Ron Paul/Alan Grayson, gone are the restrictions on derivative trading and restricting access to taxpayer money via the Federal Reserve, rejected were the plans to remove Fannie and Freddie out of Government ownership (along party lines),  and instead have been replaced with more oversight, regulation and government largess.

Remember, Lehman was under the watchful eye of the powerful Federal Reserve bank of New York and under this watchful eye, Lehman was so deeply mired in fraud that the same Reserve Bank refused to lend them money!!   Meanwhile the SEC was too busy surfing porn to recognize that Goldman Sachs was manipulating the ratings of their supposed AAA investment grade vehicles while being neck deep in conflict-on-interest deals, like the infamous Abacus debacle. 

Meanwhile as late as 2007 Bernanke went on public television and stated (many times) that the sub-prime crisis is contained and that we are due for a soft landing (no recession)!   Folks, our Federal Reserve is the biggest and most powerful regulatory agency in the country!   Yet he completely and utterly missed the recession, housing collapse and complete global meltdown?   Similarly in 2004 when Congress was debating passing reform to curb the spending of Fannie Mae and Freddie Mac what did Barney Frank, now chairman of the House Financial Committee state?  He stated that Fannie and Freddie were financially solvent and that indeed nothing was wrong with these two agencies.  Nothing.  If you don't believe me, then watch for yourself in a video that went viral shortly after the real estate debacle. 

So how can anyone advocate more regulation when our existing regulators are either complicit in the worst case or utterly ignorant in the best case?  Yet Barney Frank is now instrumental in passing reform after being asleep at the wheel during a time when regulation would have actually mattered.  Similarly we are now going to pile on more and more government bodies despite the demonstrable failure of all the existing institutions. 

Reasons for why we are now in a full blown financial crisis are still alive and well.  First and foremost our GDP along with Europe and China for the past decade has been largely due to federal spending.  After the recession of 2000-2003 America never recovered.  We were misled to believe we recovered, but it was all fake.  All of it.  FAKE.  Don't believe me?  Look:

Put politics aside for a minute and study the chart.  Then consider every single individual in government who participated in exorbitant and outrageous spending during this time frame starting with the Bush administration.  What Bush and those members of Congress performed was akin to financial arson.  They purposely and willingly placed our generation and the next generation into financial servitude.  In that same time frame our dollar has lost value as our Central bank created money out of thin air. 

Yet the stock market boomed, unemployment remained at a low 5% and everything APPEARED to be rosy.  We were living in fantasy land and now the same pundits, talking heads and fools are trying to tell you that we are headed back into this fantasy land.  Some of these people are just ignorant boobs and believe we experienced genuine growth, these people simply evoke pity,  but others - like Government officials and media whores are purposely trying to recreate the fantasy and shroud you in ignorance, these people are outright criminal scum.

This illusion was created by government spending, nothing more and nothing less.  Public spending has replaced private and the chickens have come home to roost, because this Keynesian way of doing business does not work and it especially does not work when you are forced to borrow!  Now this collection of ignorant nincompoops and criminals want you to go out there and buy, buy, buy.  Of course there is nothing to buy with other than taking on more debt.  Yet tragically debt is our blood now, we need it like a crack addict needs crack, like a car needs gas, like Obama needs a lesson in economics and like I need readership. 

One more chart for your consideration.

If you just to choose to understand or remember one economic concept, it should be the chart above.  This chart explains everything.  It explains not only how we got where we got, but why no recovery will happen and only hardship will follow.  Now consider the period between 2000 and 2010, with the GDP chart from above.  Think about it.  We have been SPENDING MONEY WE DO NOT HAVE!  This is how we got here and now observe the dramatic contraction in credit.  This is where we are going.  We are going to contract, deflate and experience a depression - regardless of what the criminals in Congress plan to do. 

That is it.  It is not about more government regulation, more control or more partisan bullshit.  It is about second grade math.  It is about the legacy of thirty years.  It is about central planning by allowing our central bank to print money, set interest rates and pretend to care about regulations while letting the financial elites skim off the backs of the burdened taxpayer.

The reason why Timmy Turbo Geithner allowed the FRBNY to pretend Lehman was a perfectly healthy financial entity, because neither Timmy nor the Federal reserve can afford to otherwise.  In simpler terms, our politicians are in a terrible bind and have to essentially allow our financial sector to exist regardless of how much awful crap they pull.  This is why no amount of regulation will save us because it is a gigantic conflict of interest,  an expansion of credit and more debt (like the above chart) is the only way America can survive in the short term.

Those that blame the free market for the above are blind and those that believe we can recover have major fundamental gaps.  Our path forward is not through more government, it is about less government.  It is about living within our means, it is about coming clean with our debt situation (both private and public) and it is the separation of bank and state.   Anything else is tantamount to theft, theft that has been perpetrated on the American public.  Enough is enough.