Yet another bailout

So AIG is the next bailout. I guess some of the preferred stock holders in AIG had a more powerful presence in government than Lehman Brothers did. This bailout is basically a loan by the government (using your tax dollars) so that AIG can go out of business in an orderly manner. Here is choice a quote by Tami Luhby, a senior writer at CNNMoney.com:

An eventual liquidation of the company is most likely, senior Fed officials said. But with the government loan, the company won't have to go through a tumultuous fire sale.

(for the CNN full article click here)

So what happens in such a liquidation? Well the bulk of the proceeds in the liquidation go, of course, to the preferred stock holders (the wealthy elites) while the regular stock holders (you, through your 401k) get the shaft. And of course, the management of AIG (more wealthy elites) can always take that loan money and run, let the corporation default on the loan. In other words, they will just mail the keys to the office to the Federal Reserve Board a corporate version of jingle mail.

Market Crash?

Is today the day where the Great American Ponzi Scheme collapses? I say no. One of the key aspects of a dark age is the breakdown of the commerce web. Today a few important strands are breaking as some big banks fail, but the web is still there…at least for a few more months. Currently, I still hold that the real crash will be in February of 09 when the much more tangible sector of the economy, retail, begins to fail after a dismal holiday season.

I can tell you this though, the crash is inevitable. The Elites know it. They are scrambling to gather their wealth before it happens so that when the New Dark Age descends they will be in a position to become the New Aristocracy. But, despite the enormous power they already wield, they cannot stop the crash (nor do they necessarily want to).

You’ll notice I mentioned the “Great American Ponzi Scheme”. “What is it?” you ask. The GAPS, is one of the primary mechanisms that the Elite has been using to transfer the collective wealth of the American middle class into the coffers of those who will become the New Aristocracy. It works like this:

1) First, the Elites convince the middle class to give up the concept of pensions and replace them with 401k plans.

2) At the same time, the Elites buy preferred stock in various institutions in which they have some control over the business decisions made.

3) Using their influence, they get those institutions to artificially inflate their value. For example, banks stuff their books with mortgages - they may not expect many to get paid back, but they still show as a full valued asset on their books.

4) They wait for the 401k plans to use middle class American’s retirement money to buy the regular (not the preferred) stock in those institutions. This is the important step where the wealth is transferred from the middle class to the Elites. Actual capital is used to buy stocks with only a virtual (imaginary) value.

5) Now the Elites can, at this point, sell their preferred stock and cash out. Or, they can just wait. They carry no (or at least a significantly lesser) risk. If the scheme fails, they own PREFERRED STOCK. That is, they will benefit from a bailout while the regular stock holders are shafted. Even if the institution is not bailed out, they are still the ones who get reimbursed during the liquidation of the institution, not the regular stock holders. Either way the capital has been transferred to them.

Now, you might be able to see why conservatives have pushed so often to privatize Social Security. Such an action would allow that money to buy stock in their companies, further transferring the remaining wealth of the middle class to them.

The Wicked Elites

The Wicked Elites are the people whose goal is to become the New Aristocracy when modern society transitions to the New Dark Age. The primary goal of the Wicked Elites is to eliminate the middle class. Why? It's simple. The middle class represents a limiting force upon the elites.

Okay, first off, who are the elites? Let’s not confuse them with “the rich”. Now, the elites most certainly are rich, but not all rich qualify as elites. The elites don’t just have lots of money. It’s how they use that money that makes the difference. The Elites use that money to seek to control those they consider lesser than them.

The reason they want this control is so that they can participate in excesses. These “excesses” are generally things that are at the very least socially unacceptable and quite often downright illegal. Usually, they can be identified as some variant of one of the seven deadly sins:

Lust: The elites want to be able to boink who they want, when they want, regardless of willingness, age, gender, or marital status, and they want to do this without any fear repercussion. An example of such an excess is the policy of Droit de seigneur (that was the medieval right of a lord to sleep with any bride within his domain on her wedding night (see Braveheart for a depiction). Though I list this first, this is perhaps the most difficult of the seven for the elites to achieve as such actions are rather clearly prohibited by law, but when the New Dark Age begins and law is privatized, this may not be so far out of reach for the New Aristocracy.

Envy: If the elites want anything in the possession of a lesser person, whether it’s money, property, or any material object, they want to be able to take it without any form or resistance. A modern example is Walmart’s use of imminent domain to seize people’s homes and land to build their behemoth stores.

Rage: The elites want to be able to punish those whom they consider lesser than they for any offense, in any way they see fit. An extreme example from history is the holocaust. How about a certain President sending his country’s troops into a well contained, beaten down Middle Eastern nation to settle a personal vendetta? How about torture? A few decades ago the concept was only discussed when referring to petty third-world dictators, now it has become a possible tool of the Earth’s most powerful government.

Sloth: Of course the elites don’t want to sacrifice to get what they want. Perhaps the best example from history is slavery. Rather than or hire labor or work themselves to produce a livelihood, slave owners forced others to do it for them. A more contemporary example might be outsourcing labor to third world countries.

Vanity: There are some among the elite that would know no boundaries in the harm they could do to further the image. The most extreme example of this ever is the Countess Elizabeth Bathory. Imelda Marcos, with her hoards of shoes, is a more recent example.

Greed: Of course the elites want do anything to attain riches. See Enron: had it not been for the prosecution of these crooks, you know countless other company executives would have used the same shenanigans to line their pockets.

Pride: Elites want power, not just to be able to screw, steal, harm, exploit, preen, and hoard without accountability. No! They must FEEL powerful, too. Think of ancient times where elites had themselves declared living gods. This hits on all of the prior sins. Of course, the elite want those things for their base pleasures, but moreover, they want to be able to do those things out of spite for those whom they consider the little people. They want to be able to laugh at their objections.

Now, truth be told, the Wicked Elites already get away with some of these excesses, but imagine how they would be if they faced no repercussions for their actions. It’s not laws that keep them in place, but rather the people who enforce those laws are who they fear. In America, which class of people is primarily responsible for law enforcement? Why, the middle class of course. The class of people, that together, has enough knowledge and capital power to oppose the will of the Wicked Elite. Once the middle class is eliminated, there remains no barrier to the New Aristocracy changing laws (or even the whole legal structure, i.e. privatizing law) to suit their desires.

More on the Fannie/Freddie debacle.

Naturally Fannie and Freddie are barely registering in the news today. I'm sure the neocons timed this so just such a thing would happen. For those who are interested I found a pretty good discussion going on over at HousingPANIC that talks about the true consequences of this taxpayer bailout.

And yes, I do believe that one of the primary goals of the neoconservatives is to establish an American aristocracy (though they are not the only ones with such a goal).

Weclome

Welcome to Collapsium. Today the shit is hitting the fan with Fannie Mae and Freddie Mac being seized by the government. I figured it would be a great starting point for my new blog about the collapse of modern society and the beginning of the New Dark Age.

One of the most important aspects of the new Dark Age will be concentration of wealth (money, property, and resources) to an elite few. These people will be the new aristocracy, and, much like the dark ages of the early European medieval period, these elites will be free to run amok and abuse their power at will.

The emergence of this new aristocracy is contingent upon the transfer of wealth from the middle class to the elites. Today’s seizure of Fannie and Freddie is the new model for how this will occur (warfare being the older model). Basically, it goes like this:

1) Institutions that are deemed “too large to failure” that are run by elites will become involved in various forms of the ponzi schemes, pyramid schemes or bubble schemes to quickly run up a high virtual value.

2) When the scheme begins to fail, the government will seize the institution.

3) The government will then used wealth taken from the middle class (taxes) to prop up these institutions converting that virtual value from step 1 into actual value.

4) The elites in charge of these institutions then bail out with “golden parachutes”.

Today this is happening with Fannie and Freddie. If you check out this CNN article, one of the most important things to note is how the bail out is only for the holders of preferred stock, i.e. the elites.