The Financial Crisis Made Simple

[No DUplicitous DUpe]

The Financial Crisis Made Simple (reprinted with permission from http://saneramblings.com/phpBB/viewtopic.php?f=1&t=167 )

You're in a plush Las Vegas casino playing craps and the action is hot. You're making big money.

It's like the bankers did in recent years at what also turned out to be the craps tables. As happened with the bankers, the tide turns and you lose all the money. And like them you keep playing.

But instead of winning again, soon you lose all your cash and the cash the casino loaned you. Rather than acknowledge the stupidity of what you did and take your losses, you desperately pull out all your credit cards and double down taking them to their credit limits.

You toss the dice and lose again. Then it hits you, you are due to win if only you don't quit, so you double down again using your house and car and your children's college fund as collateral. You shouldn't take this risk but you're so close to recovering your fortune, just one winning bet away.

You close your eyes and toss the dice. Before you open your eyes, the crowd's mournful cry tells you, you lost everything! You're broke and deeply in debt.

But how can this be? You've always been as solid as a bank and people think you are rich. Now you can't pay your bills and will go bankrupt, damaging everyone who trusted you and lent you money.

Frantic, you call your Uncle Sam and beg for help. He wants to help but he too is deeply in debt. "But all is not lost," he tells you. "I'll get you the money you need so you don't go bankrupt and you can continue to live a lavish lifestyle and pay your creditors."

Your Uncle Sam quickly goes to his biggest lender the Bank of China. But they say, "You're already so deeply in debt to us, we've only been carrying you so you wouldn't go bankrupt and we'd lose our money.

"We'll keep carrying you," they tell him. "But we're going to cut back on what we're lending to you. You've become too big a risk."

Later that day however, your Uncle Sam arrives in Las Vegas and showers you with money. Stunned but joyful and relieved you ask, "Where did this money come from?"

"You're very lucky after all," your Uncle Sam replies. "I have a printing press and can print everything you need. We can keep this whole ugly affair our secret because I changed the accounting rules. Your family will only know I bailed you out."

"But won't this money be viewed as counterfeit and lose it's value," you ask. "Not for awhile," says Uncle Sam. "And in the meantime, enjoy it."

Dick Kazan http://www.saneramblings.com

Dear Reader, What I've described in the preceding story is true. And it gets worse. For example, while the public expressed its outrage at the $165 million bonuses AIG paid itself, Fannie Mae and Freddie Mac paid themselves $210 million in bonuses, with virtually no news coverage.

This system is badly broken and it's not going to fix itself. You have to get involved. Everything you've worked for is at risk. Please raise your voice and fight for it and you can succeed or it will be lost in your silence.

[No DUplicitous DUpe]

1. I really like this column, or I would not have posted it here. nt