Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The great theft of America, wall street, real estate industry, big oil, CEO’s to blame for greed and collapse of country, country of consumers, non-savers
What we are currently witnessing the greatest larceny in history. What has taken place is the theft of the accumulated wealth of a whole generation. The perpetrators in this feat include the past three Presidential Administrations, Congress, the Real Estate industry, Wall Street, Big Oil, and most of the CEO’s of major industry.
The victims are working class America.
The World War II generation, also known as the “greatest generation” was a generation of savers. They grew up during the great depression and understood that economies do collapse from time to time. As a consequence of their experiences, they lived within their means, and in addition to building the strongest economy on earth, they saved more money collectively than any generation in history, by some estimates more than 40 trillion dollars. Their heirs, the “Baby Boomers” inherited this windfall and for the most part it is now all gone.
The Boomers were really an easy mark for the corporate thieves who have been orchestrating this plan for decades. Growing up in a world where they had everything, they are a selfish generation who in there earlier days were labeled the “me” generation. They were willing to set aside common sense and allow their egos to lead them to ruin.
The mechanics of this plan was a confidence game that began with the 1990 recession.
Recessions are a natural part of the normal economic cycle and purge the system of debt and insolvent investments. They regulate the excesses of expansions and reallocate assets away from those who do not manage them well and they are taken over by the more conscientious.
Interest rates usually rise reflecting the increased demand for money and risk of lending. Cash becomes king. Recessions are reality checks that we as humans need to keep our perspective.
In 1990’s recession, the Federal Reserve “stimulated” the economy by lowering interest rates and increasing money supply in order to give banks both the ability and incentive to loan more money to the public. While this policy did stimulate the economy it also interfered with the natural purging that should have taken place at that time. People who would have had to file bankruptcy due to excessive spending in the 1980’s were able to borrow their way out of trouble.
Beginning in the 1990’s the psyche of the Baby Boomers began to change. Borrowing and not saving began to be the path to riches. There was also a new vehicle to finance their extravagance, the HELOC, a home equity mortgage that turned their home into an ATM.
By the end of the decade the economy was once again booming and everyone was getting rich in the Stock Market.
Leverage was the tool by which millionaires were made. Public confidence was at an all time high and there was no end in sight for the new prosperity.
In 2001 it all fell apart and more than 8 trillion dollars was lost.
The Federal Reserve once again came to the rescue lowering interest rates to the lowest levels most people had ever seen. By simply refinancing their home they could borrow their way out of trouble and perhaps buy a new car to boot!
The new millennium was truly a wonderful time. No longer did people have to suffer thru the hard times brought on by over extravagance. Borrowing was the answer to everything.
The trap was now complete. If all worked well, the Boomers would borrow and spend at a furious pace, in a vain attempt to keep up with the Jones’ making corporate CEO’s filthy rich as record profits rolled in.
In the end the banks would hold notes for everything the Boomers owned and they would be on the hook to the banks for the rest of their lives. In retirement, they would need a reverse mortgage to get by, and when they died they would be basically broke.
More than 40 billion dollars of wealth would have changed hands. It was a perfect plan, until they went too far. Not wanting the party to end, they grossly over inflated Real Estate values allowing borrowing 2 to 3 times the value of the assets. Unsecured credit also skyrocketed. The problem was now a runaway locomotive with the Financial Institutions holding trillions of dollars of bad debt.
As the government and the talking heads in the media told people nothing was wrong and to just keep spending and investing, the Real Estate market rolled over and began to fall. The Real Estate Industry denied there was a problem until they lost all credibility. The banks panicked, knowing they were now insolvent. The CMO’s, derivatives containing bundled mortgages in which most of their money was invested, were now illiquid.
The Government and the Federal Reserve went into emergency mode, manipulating economic reports, dropping interest rates and injecting money into the system.
They had gone to the well once to often and this time the trick did not work. There was simply too much debt; no one was going to be able to borrow their way out this time.
The price of commodities, oil, and gold increased to record levels as the value of the dollar plummeted. Foreign investors lost confidence in the dollar, and the Governments ability to manage the situation, as they came up with a multitude of hair brained plans that did little or nothing to reassure the public or the Stock Market.
Anticipating more than 100 bank failures, the Resolution Trust Corporation began calling up retired workers, employed during the time of the S&L debacle, to deal with the mass of insolvencies.
We are now facing a situation where the values of assets (Real Estate, Stocks and Bonds) are falling, while at the same time commodities, (Energy, Food, Imports,) are rising.
Debtors are being wiped out. Savers are seeing the value of their money ravaged by inflation. Unemployment is growing.
The economic problems are spreading throughout the world, and a worldwide recession is now a very real possibility.
While many are still in denial, there is no doubt now that the party is over. The bills are due and have to be paid. Unfortunately it will be the taxpayer who will be paying. If you do not believe that, simply look at the actions of the Fed in the past few weeks. Their plan to take mortgage paper from the banks in return for treasuries will result in the Fed being stuck with the worthless paper when the banks do go into receivership. Now they are stepping in and bailing out Bear Stearns, increasing the national debt and deflating the dollar and increasing inflation. Eventually they will have to increase taxes to service the debt and insure their ability to borrow from foreign lenders.
The only upside to all this is that it will cause a lot of pain, and hopefully the people will get angry and actually take some interest in what is going on.
You see while it is Big Business and the Government that has stolen the prosperity that was ours and our children’s, the blame is ours.
It was our complacency and lack of evolvement that allowed the Government to run amok and to serve their own interests instead of ours.
Interesting. You sure have a lot of "they"s in your narrative. Some of what you say has a ring of truth to it but as a conspiracy it's just too hard to believe that that many people could stay on the same page for so long.
Quote:
Originally Posted by jimhcom
The World War II generation, also known as the “greatest generation” was a generation of savers. They grew up during the great depression and understood that economies do collapse from time to time. As a consequence of their experiences, they lived within their means, and in addition to building the strongest economy on earth, they saved more money collectively than any generation in history, by some estimates more than 40 trillion dollars. Their heirs, the “Baby Boomers” inherited this windfall and for the most part it is now all gone.
I have a ton of respect for the WWII generation. They made tremendous sacrifices that have benefited the entire world. But remember they were the parents of the selfish baby boomer generation. They have to have some accountability for that.
No one held a gun to their heads. People bought more than they could afford and took out a tremendous amount of debt. There's enough blame to go around to everyone.
Interesting. You sure have a lot of "they"s in your narrative. Some of what you say has a ring of truth to it but as a conspiracy it's just too hard to believe that that many people could stay on the same page for so long.
I have a ton of respect for the WWII generation. They made tremendous sacrifices that have benefited the entire world. But remember they were the parents of the selfish baby boomer generation. They have to have some accountability for that.
I (as a Boomer) don't feel that our parents' generation should be blamed. They tried to teach us frugality; most Boomers weren't interested in listening to that old tune; most Boomers took the philosophy of the '60's to heart and did their own thing. We also raised some pretty selfish children too who didn't understand the power of debt.
Looking back, I think it started before the 1990 recession. Probably started mostly Reagonomics or Voodoo Economics as Bush 1 dubbed it. There was no Raygun miracle. Just BS and debt. "they" (as you say) asset stripped the companies, pensions, and began the path for the truly breathtaking federal debts that Reagan started for buddy companies for "defense" (against who?). After that, anyone who could become asset stripped and indebted was fair game. The same R's (but with D help) pulled off most usury laws and let the dogs run wild.
At least a new depression will restore values -- after the tears, bloodshed and gun fire die down.
I (as a Boomer) don't feel that our parents' generation should be blamed. They tried to teach us frugality; most Boomers weren't interested in listening to that old tune; most Boomers took the philosophy of the '60's to heart and did their own thing. We also raised some pretty selfish children too who didn't understand the power of debt.
Unemployment since 1948. The sky has not yet fallen.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
