Neo-feudalism in 21st Century America
by Jeff Nielson, Bullion Bulls Canada Betrayal of a nation – and a dream. In recent commentaries on this site, I have made a considerable fuss over a document more than a century old: “The Bankers Manifesto of 1892”. For those who do not know of the frightening parallels between the bankers declaration of intentions in the 19th century, and the tragic realities of 21st century America, I urge you to read the previous piece. What is taking place in the U.S. is nothing less than the economic enslavement of the American people – as a precursor to attaching similar yokes to the rest of us. I draw people’s attention to a glaring reality. The vast majority of losses self-inflicted upon the U.S. financial sector are tied to the catastrophic detonation of the U.S. housing “bubble” – the largest asset-bubble in economic history (next to the ticking-bomb known as the “derivatives market”). Eliminate those losses, and you put a floor on the losses suffered by U.S. banks – on those assets. However, well over 90% of the bail-out dollars have gone to the banks not the homeowners. The main difference between the losses experienced on U.S. residential real estate, itself, and the bankers’ losses is leverage. Going into this crisis, the balance sheets of the U.S. financial crime syndicate were leveraged by an average of MORE than 30:1. What this means is that every $1 dollar of losses on U.S. real estate generates $30 of losses for the bankers. What this also means is that it is thirty times as expensive to engage in a bail-out at the bankers’ end than through a bail-out of the real estate asset, itself. Putting this same idea in different terms, it would have been thirty times more efficient to have bailed out the real estate rather than the bankers leveraged bets on the real estate. As a matter of simple arithmetic, the bankers themselves would have been much more solvent today (or rather less insolvent) if the money had been spent on the people rather than the banks. I have gone on record many times expressing my contempt for the lack of intelligence and competence of U.S. banker and politician, alike. But even I refuse to believe that these people could be so mathematically-challenged that they were not aware of the numerical realities. Giving them credit for such awareness, this means that they would have known all along that real initiatives to stop foreclosures and restore solvency to U.S. homeowners was the best choice for everyone. Even waiting until TODAY to start such an initiative, it would ‘only’ require a maximum of $3 trillion to restore solvency and balance to the U.S. housing market by paying-down all mortgages by 20% and bulldozing at least one million surplus housing units – which would NEVER have buyers but would continue to drag down other property values, perpetuating the downward spiral. In other words, for much less than 1/3 of what they have already committed in hand-outs to the bankers, they could have totally fixed the problem. The only rational reason why THIS option was not immediately chosen is because the goal of this melt-down is to have as many Americans as possible lose their homes (one of the items on the “check-list” of “The Bankers’ Manifesto”). I fully understand how outrageous this proposition sounds. I’m willing to listen to any rational explanation as to why the U.S. government would have squandered trillions in bailing out 30:1 leveraged bets, when they could have bailed out assets on a 1:1 basis. In support of my position, and my overall premise, let me add these additional details. The average wage of the American worker has been declining steadily for thirty years, in real dollars (as have the wages for Canadian workers). One-quarter of all Americans are high-school dropouts – with nearly 50% of blacks and Hispanics now failing to graduate. Before the middle of this century, those two demographic groups will become a majority in the U.S. population. Corporate America almost completely dismantled the U.S. manufacturing sector – shipping those jobs to the low-wage economies of Asia. Millions of high-wage U.S. jobs were eliminated, with at least another million to come. In doing this, the U.S.’s neo-feudalist “lords” have destroyed the wealth-creation base of the U.S. economy – putting the U.S. in its current position of hopeless insolvency. While the U.S. has been only too happy to destroy its own manufacturing sector, it has continued to pump more than one hundred billion dollars per year of subsidies into its agricultural sector. Obviously, you don’t need a high school diploma to pick crops. What are the chances that the high-school drop-outs working on these plantations will be able to afford to purchase their own homes? And those who don’t become serfs, attached to a particular plantation will have the chance to become WalMart serfs, instead. Yes, I know, with current WalMart wages, it’s theoretically possible to buy your own home. However, as U.S. incomes plummet (at an accelerating rate) and purchasing power with it, those “low, low prices” at WalMart will have to get MUCH lower, for anyone to be able to afford to buy their products. Naturally, most of the reductions in prices will come through reducing WalMart wages. Still not convinced? The first (of many?) U.S. Army units has been “deployed” inside the United States for the first time in well over a century, and in direct violation of the Posse Comitatus Act of 1878 – one of the most sacred statutes to Americans. One of the primary reasons for creating the U.S. “National Guard” was so there would NEVER be a need to deploy the U.S. Army inside the U.S. – unless it was under attack by a foreign power (such as an unexpected Canadian invasion!). Why is this U.S. Army unit being deployed inside the U.S.? “Crowd control.” What will the U.S. Army do with the “crowds” it “controls”? Very likely they will disappear into the private prisons springing up all over the U.S. (the new investment-of-choice for Dick Cheney, and former Attorney General, Alberto Gonzales) – which are already becoming a lucrative source of slave labour. Those not lucky enough to be thrown into a private prison may end up in one of the “mass grave sites” currently being sought after by the U.S. Department of Homeland Security. Are these the actions of a government which is trying to help its own people? The real “war” currently being waged by the U.S. government is not the phony “War on Terror” it’s the economic “war” it is currently waging on its own people.