Title: The Grand Strategy of USA/FED Home Mortgages as Related to the Bigger Picture of America's Economic & Military Survival.
Author: Andrew M Molchan
Date: Tue April 24th, 2012
4/24/2012, ANDY'S INSIGHTS. The Grand Strategy of USA/FED Home Mortgages, and the BIGGER Picture of what it Means for America's Economic and Military Survival.
It's more than the Pentagon that's Grand Strategy challenged. Most of Washington DC is Grand Strategy brain dead. About one-third of the States, like California, are equally brain dead.
My long term readers will remember, that starting back in 2005, when EVERYONE in Washington DC was saying that Alan Greenspan was the most brilliant national finance manager who had ever lived. I was saying that his short sighted FED manipulations had built a bomb that was going to explode.
As is the norm in Washington DC, in the last four years all of the wrong, proven failed policies, were made bigger. Mortgage Grand Strategy policy under Greenspan went from stupid, to even MORE disastrous under Bernanke and Geithner.
HERE ARE THE FACTS. On one hand Bernanke and the FED created TRILLIONS of Queer Dollars. On the other hand, the FED and Geithner forced the Banks to take the Queer Money and use it to LOWER mortgage rates. The FED has also financed and guaranteed a Trillion Dollars of mortgages at Fannie Mae, Freddie Mac, FHA, and all of the other Hillbillies that should have been shot in the head and buried 20 years ago.
Washington DC is unable to think at even the shallowest Grand Strategy levels. Its programs have two mutually EXCLUSIVE Grand Strategies going at the same time. The Tectonic Plates under the surface are building up pressure. They are being powered by Trillions of Queer Dollars used for CONTRADICTORY PROGRAMS.
SIDE ONE OF THE GRAND STRATEGY COIN. Suppose Bernanke and Geithner's Queer Trillions succeeded in creating the inflation they'd like? In the last four years Ben and Tim have FORCED the American Banking System into taking a Trillion dollars of Queer Money so the banks could LOWER mortgages RATES, and to ALSO re-finance old mortgages to lower rates. PLUS, the Government has guaranteed the lower interest mortgages via all of the Hillbillies (Fannie Mae, Freddie Mac, Sallie Mae, etc) that have de facto been Nationalized. (i.e. the taxpayers are on the hook for their loses).
So what if all of Ben's Queer Money succeeds in creating inflation? With enough added Queer it could still happen. In August 1981 AAA Corporate Bonds were selling with a yield 15.5% interest, and Junk Bonds with 21% interest yield. What has happened in the past CAN happen in the future.
What if the FED's Queer Money Trillions succeeds in bringing back inflation? Then America's Banks are totally f**ked. They'll be setting on a Trillion dollars of mortgages that are BELOW the inflation rate. Half of the American Banking System will be Balance Sheet bankrupt. All of the Hillbillies, that the tax payers now own, will also be balance sheet bankrupt.
SIDE TWO OF THE GRAND STRATEGY COIN. Suppose Ben and Tim's Trillions of Queer Dollars DO NOT create USA inflation? The reason why inflation in the USA was NOT created in the last four years is because the FED's Queer Money FLOWED OUT of America - like I have since 2008 said it would. Ben and Tim have ADDED Trillions of Dollars to the Federal Debt, and succeeded in making China and Asia richer and more powerful.
SIDE TWO is the worst of all worlds. It creates Inflation in China, and China inflation translates into higher prices and inflation in America. It creates jobs in Asia, but NOT in America. The fact is that even though the total US population has grown by 8 million since 2007, the total number of US workers right now is LOWER than in 2007.
SIDE TWO OF THE GRAND STRATRGY COIN gives China even MORE de facto control over America (and the world) by giving China even MORE America dollars.
SIDE TWO is China using Bernanke's Trillions of Queer Dollars, all over THE WORLD, to give China a MASSIVE Grand Strategy economic advantage. China is using Ben's Trillions of Queer Dollars, and going around the world, and buying: Oil lands, Iron Ore mines, Cobalt, Chrome, Manganese, Nickel, Tungsten, Copper, Gold, Silver, Mercury and Titanium mines. All around the world China is using Ben's Queer Trillions to buy farm land, sea port and air port land, and EVERYTHING with long term Grand Strategy military and economic value.
Yesterday's (4/23/2012) Wall Street Journal's front page story was, "China Grows Its Global Cattle Drive." This year China will import 102,000 live Dairy Cows from Australia, Uruguay, and New Zealand. This is up from 85,000 imported in 2010. The WSJ sub-headline is, "Since 2009, China has become the world's most important buyer of Dairy Cows." And almost everything else with long term Strategic value.
And why not? Since 2009 Bernanke has given China a Trillion USA Queer Dollars to buy whatever in the world China wants.
The morons in Washington DC like Bernanke, the FED creeps, and Geithner keep telling themselves, "It makes no difference how many Queer Dollars we send to China because the ONLY place China can spend US Dollars is in America." Did the dimwits ever notice that the US Dollar is an International currency? Have the brain dead in Washington DC ever figured out that US Dollars CAN be used by China to not only buy Cows in New Zealand, but Oil Wells in Africa? Or Iron Mines in Australia? Apparently not.
ALL of the above Washington DC mistakes come with BIG PRICE TAGS. Stupidity has NEVER been cheap. (Ask Hitler's German supporters). The ultimate cost of Government Grand Strategy Stupidity comes in the form of A LOWER STANDARD OF LIVING FOR AVERAGE PEOPLE. (Ask the Germans who were alive in 1946. Mistakes come with a price).
The FACT, not my opinion but the FACT, is that the Median USA Household Income (i.e. Standard of living), AFTER the addition of Trillions of Bernanke Queer Dollars, is TODAY in 2012 at 1995's level, AND GOING DOWN. Why? Because of gross mismanagement in Washington DC in general, and the FED in particular.
If the FED had been totally dissolved 20 years ago. America's banks, it's industry, its economic and military condition, they would all be better today.
The bottom line is that the ONLY WAY for America to get out of DEBT is with more PRODUCTIVE Work, and especially MORE SAVINGS. It was the 25% SAVINGS RATE of American's workers in 1941-1945 that whipped out the Excess Debts of the 1920s, NOT Roosevelt's 1933-1939 half-baked queer money.
The bottom line is that no matter what side of the Grand Strategy coin is used, Washington DC has already screwed America. The only question is what particular form the screwing will take, and how much lower America's standard of living will be driven down. Or, God forbid, if America has to collapse (like Hitler's Germany) before some kind of sanity returns to Washington DC?