By Mickey Walker-August 9, 2009
These are tough times. Hard to tell how we got here, but the economy is on every American’s
mind 24-7 or so it seems. It’s
really hard to tell what to do with any spare dollars you might have left over
after expenses these days. Banks
or credit unions pay no interest anymore, why, a couple of years ago, my
government funded IRA paid around 5 thousand bucks in interest, and the same amount
of capital this year has not earned even one dollar. Some say it’s ludicrous that you can’t get interest on say,
100 thousand dollars, but truth is, if you invest in safe government securities
or might near any type of fixed income security like a CD tied up for a year or
so, you won’t get much for your trouble, maybe under a thousand bucks. Nobody knows why all of a sudden the
party’s over on interest rates paid on your chunks of capital you got say, from
your 401K when you retired, or from your Aunt Hanna who died and left you a
stipend for stopping in to see her when you were a teenager and were so sweet
to have time for an old woman who appreciated it. Bond markets have tanked or sputtered with yields so low
that a snake couldn’t crawl under. The lack of good fixed-income securities has forced senior citizens to
try their best to get jobs again doing the most menial tasks imaginable in
order to get some current income coming in to buy the necessities to keep body
and soul together.
Looks like, by some eyes, Obama has managed to stave off
financial catastrophe by pumping billions into his stimulus package
programs. He gets a lot of
criticism for all his borrowing and spending, yet, he seems to be doing the
best he can with what little he has. Americans are a funny people. For 8 years when George W. Bush and his lapdog congress borrowed and
spent us into oblivion so we could finance two wars, one in Iraq and one in
Afghanistan, no one complained about the money America was spending to bring
democracy to the peoples in foreign lands. They don’t know whether they want a National Healthcare plan
or not. I suppose they might be
scared up about losing out on Social Security and Medicare if they make
Healthcare for all Americans a reality. I just scratch my head in awe of the metamorphoses and this new species
of American without direction, without hope. Yes, the people are scared and confused about money. Many have lost their jobs and
homes. The stock market is like an
ant hill kicked over. And bonds,
all kinds of bonds, suck. No
yields. If you are like me, you
got to admit that you are in strange waters, or more likely up shit creek
without a paddle. Preserving
capital is the name of the game, hey, we got to act like we doing something,
don’t we? You just do it without
question if you can or if you know how. But I don’t know how to pull it off so I started asking around.
A neighbor said there might be a little metal in the pawn
shops, as in silver and gold, that might be had for a song. This is new territory for me, but I
studied it as seriously as I could. Somebody said if you bought Double Eagles any grade, it would make sense
to pay, say 325.00 over spot. Say
what? What does that mean? Half Eagle Liberties might be good, too
at say any grade, maybe 200.00 over spot. What ya think? My head was
spinning by then. How about some
scrap silver bags? I understood
that for sure, real silver coins, Mercury dimes, Standing Liberty Quarters, the
ones we used to buy soda and candy with back in the 1940s. No one in Houston seems to be able to
quickly produce any bulk bags of silver though, even though those worn down
coins are the trashiest form of ownership there is, right? So maybe it couldn’t
hoit to cart some of them scrap silver bags off to the house and bury em in the
ground, I mused. Keep um til the
bottom falls out, Lord forbid, but it could happen. Many say the dollar is finished. Many say that anyone with cash in Bank of America and even
Chase, should reconsider getting hell out post haste. They say they got big positions in these demon derivatives
and one little run on the banks could send them into a funk of people demanding
hard cash that the banks don’t have. So why don’t I practice what I preach and get out? I wish I knew and could tell what the
right thing to do would be. But I
don’t. Guess I’m scared and
confused as to what to do, and doing nothing in a case like this always seemed
to be the best strategy. Anybody
know the feeling?
I read where some of the big banks could declare a bank
holiday. Sounds sweet enough, but
bank holidays are pretty rough, or so it seems to be the case. The tellers shut their windows, take
off their green visors, and go to the house. These banks may never open again. During the last Depression, over 35,000 of them never
did. And did anybody ever get
their money back? No. Now we got the FDIC though which is Uncle
Sam to the rescue. If your bank
fails the government will bail you out for the full amount of your deposit up
to $250M dollars. But who is gullible enough to believe the
govt. CAN enlist the FDIC to pay up? With what? 10 trillion
dollars in debt already, our government guaranteeing anything and paying us
back with FDIC bailout dollars is about as good a possibility as Quinn, my
wooly booger Bichon doggie, predicting interest rates with accuracy. Right now he is trained to roll over to
the right if rates are going up. And if he rolls over to the left interest rates are about to fall. He does this without exception since he
learned how to predict the markets. And Quinn's associate, Teak, the Dreamsicle cat who sings on our high
wooden fence in the moonlight sometimes, is another valuable tool for
predicting markets. Teak was
called back into service as a last resort by Ben Bernanke as a financial
consultant in March this year. Under the Bush administration Teak advised key administration officials
on how to set up the bookie bets on how Derivatives would perform. And then when the shit hit the fan and
Obama took the baton, things took a turn for the worse. So Teak tweaked. He modified his formulas to predict
Derivative tranche behavior by observing which blackbird on the Houston Astros west
fence would fly first. If the left
one took off, then prosperity followed, and if the right one flew first, then
Teak would further study the Lunar Tables for clues. Meanwhile only the right wing birds were flying first it
seemed for an eternity and thus began the 2008 fall of our economic system and
the hammering of our dollar. Went
to hell in a hand basket, and Teak was so engrossed in studying blackbirds, he
didn’t get to watch much of any of the Astros games.
But sure nuff, each time Teak was called on to perform he
could predict with great accuracy that a hundred billion dollars of Derivatives
would go bankrupt daily with certainty. He even called the banks, and that’s hard to do since there aren’t any
serial numbers or records of which types of derivatives are sittin’ at what
banks. Greenspan found Teak when
he was just a kitten and trained him on the mystic discipline of interest rates
and predicting their rise and fall, sometimes linked to which way the wind blew
or by the blackbird method discussed before. It is reported that Teak, in his service under the Bush
Whitehouse, made a billion dollars just like Blackwater the first year. But unlike Erik Prince who was paid in
CASH, Bush paid Teak, the consulting Tabby in (you guessed it) Derivatives. What goes around comes around. “Fool me once…..” 