9/20/2008 So, it is the work week of September 15th through the 19th, 2008. Some of the largest financial institutions of the United States are failing, crumbling, selling for pennies on the dollar or even being bought and sold by our very own, out of control government, assisted by the infinite counterfeiting and money-laundering by the Federal Reserve. Although I havent yet heard the term Black Monday applied, many economists have compared this past Monday, the 15th, to 1929. Sure, the market had a good day today. But did anyone really think that it wouldnt? I mean, even back in 1987, there was a huge rebound. But it doesnt change the fact that many lost their life savings, and many families never recovered.
And, as always, when there is any kind of disaster, the finger-pointing begins. And has it ever begun in this case! Cyberspace, the radio waves, and the talking boxes all scream for a scapegoat. Whose fault is it? Is it Bushs fault? What could he have done differently? Did he have the foresight or the ability to do everything differently? What can he do now? Was it Congresss fault? Will John McCain and Sarah Palin fix those evil CEOs who ruined these companies? Will Obamas change result in anything BUT loose change in the pockets of the Middle Class? Can Obama be our savior?
Actually, all of the questions above are irrelevant. And, also, yes. At the same time. The most astonishing fact is that many economists have seen this coming for a long time, and have warned the government, the media, and the public, screaming warnings, only to be ignored or dismissed.
In fact, back on Sept. 10, 2003, U.S. Rep. Ron Paul, R-Texas, testified before the House Financial Services Committee:
As Paul saw the situation some five years ago, the government backing isolated GSE management from market discipline. If Fannie and Freddie were not underwritten by the federal government, he told the committee, investors would demand the institutions held to higher management and accounting practices.
Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market, Paul predicted. This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.
Despite the long-term damage to the economy inflicted by the governments interference in the housing market, the governments policy of diverting capital to other uses creates a short-term boom in housing, Paul went on. Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.
Wow. It almost sounds as if all of the answers are right in front us, and that they are all very simple. All of our candidates and Congress are pretending to scramble for answers and solutions. Yet, all one has to do is look back at the four-part plan which Ron Paul previously proposed; one which I believe most Middle Class Americans would fervently cry out for, if they were only simply told about it. The even better news is that its not rocket science. Its a simple matter of instituting lower taxes, less spending, a sound monetary policy and regulatory reform.
So, lets all just forget about the smoke and mirrors change which Obama and McCain claim they will usher in once elected. The reality is, Ron Paul has been giving us (AND A DEAF CONGRESS!) the answers all along.
As Ron Paul said back on March 4th of this year, Unless we embrace fundamental reforms, we will be caught in a financial storm that will humble this great country as no foreign enemy ever could, he wrote. We can find safe harbor in our ideals. Reclaiming our historic legacy of principled commitment to liberty will, once again, unleash the innovative spirit that propelled our nation to the heights of prosperity.
Link to Article: http://www.libertymaven.com/2008/09/19/ron-paul-the-nostradamus-who-predicted-the-current-financial-crisis/1965/
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