Federal Reserve and Monetary Policy: I Wish I had the Money to Short the Dollar: Part 5. Here We Go Again.

The financial institutions are once again trying to dump their fraudulent behavior onto to the public. They are pre-packaging the same toxic assets with another layer of ownership to get an AAA rating from the same same rating agencies that helped them commit the original fraud. Here is the new deal: They are getting a risk taker to put some sort of stop on the most risky part of the security package. Here is the hidden systemic risk: These risk takers are not relying on a good economy. They are relying on Don Obama and the Obama Syndicate in changing the financial regulation that will allow more financial institutions to mark their holdings to a model not to the market. This is the same behavior that got Fannie Mae and Freddie Mac into trouble. They are going to be under capitalized. A slight down turn, say commercial real state, would force Don Obama and his Syndicate to steal from the citizens of the United States(?) to pay off these crooks.


Did I mention the fact that the new accounting regulation allows Fannie and Freddie to mark their portfolio to a model. Yep, the very same fraud that got them in trouble. They are in the suit, counter suit with their auditors. In other words, Don Obama is relying on a statical recovery and accounting fraud to get his Syndicate reelected. This was the same procedure GW Bush enacted.

The U$ dollar will be under severe selling pressure. The first causality would be Don Obama’s Syndicate, aka. Democrats. Don Obama is political dead meat once his syndicate becomes road kill. The circling republican vultures will pick them clean. The political pendulum will swing toward the right. A change of government is in the wind. We will have to go through the 2010 and 2012 election process with society in chaos.

Here is the big picture: Don Obama is controlling Housing prices through the FHA Banking system, Fannie and Freddie Mac route. Land control by the government is a Feudal System.

Let’s take a look at the user cost of capital. From Housing and the Monetary Transmission Mechanism (all terms are defined in the paper)

Fraud invalidates the after tax real interest rates. This went on for years. The problem comes in the form of appreciation/depreciation of house prices. One house sold can affect the asset price. We now know there has be some collusion in the appreciation between lenders and the appraisers.

Those morons at the Federal Reserve, Don Obama's administration, Democrats and Financial Institutions will eventually learn HOUSING is NOT INCOME. HOUSING is NOT a FRACTIONAL BANKING SYSTEM. HOME EQUITY is NOT a DEMAND DEPOSIT. In order to keep the HOUSING MODEL from collapsing, the Democrats will have to STEAL from the US of A citizens a few trillion of U$ dollars to give it to the RICH. They will also learn NOT to GAURANTEE TRILLION$ of U$ DOLLARS$: the ENTIRE DEBT of the US of A.

In general, Don Obama and his henchman Bernanke has been fooling around with the user cost of capital. The user cost of capital has not been allow to follow income but, to a political, made up model.

BUT,,, If they want to treat HOUSING as INCOME, then I want a certain $3 million dollar house (alright; a CASTLE) in the Spokane, Washington region as part of my pay and benefits package.

I would buy all of the housing builders, furniture, etc.. stocks and bonds because everybody else will also need $3 million dollar CASTLES as part of their pay package. End of the unequal distribution of INCOME. END of CLASS WARFARE. Can you say Hyper-Inflation due to a housing bubble???

A point: HEALTHCARE has changed its business model from service to investment.. Their portfolio is not to delay price increases (hedge against inflation) but, are investments. Their worth is measure by their investment portfolio not by the service they perform. In other words, the HEALTHCARE business has indexed their portfolio to inflation, aka UAW's collective bargaining contract with an inflation index and California's payouts index to future tax revenue. It makes sense: if one of their investments decreases in stock and/or bond value, they would have to raise fees to compensate the decline of their investment portfolio.

Another point: The Democrats want to tax "Cadillac" plans. They assume these plans pay out a dividend and/or non-use left over monies when the subscriber changes plans or dies. Taxing HEALTHCARE implies it is a demand deposit. Again, I what a "Platinum" Plan as part of my pay and benefit package. Everybody else would want a "Platinum" Plan also.

One more point: The US of A has no "FREE MARKET". Businesses are shifting their production over seas; China has become the factory floor and India has become the back office. Aka.. Japan shifting their production to China and the US of A, which resulted in their wost recession. Businesses and Investors will no longer taking risk without the HELP of Uncle Sam. Uncle Sam will have to spend TRILLION$ to compensate the risk taking and to keep their model going. Again, aka Japan spending billions without a change of policy that would have shifted production back into their country. Japan is still in their recession. Uncle Sam is allowing financial institutions to "HIDE" their fraudulent behavior. Once again aka Japan's policy of allowing their banks to hold on to bad loans in the hope they would be more valuable.

DO YOU NOW SEE US of A's STRUCTURAL PROBLEM??

CAN YOU DESCRIBE THE MORPHISM?? (Relation is a Category)

Viva La Revolucion!!!!

Federal Reserve and Monetary Policy: Stealth Take Over of Healthcare??

Let’s face it there is no Stealth Take Over of Healthcare by the US Government. Companies are going to discontinue their healthcare benefits to lower cost and pay Themselves. By “Themselves” I mean senior management, a hefty bonus for being “Clever”. There is no way the US Government can mandate the absolute requirement that firms has to offer healthcare.

The correct way to get the 40, 50 or 60 million(????) Healthcare is to go through Medicaid and the Medicare. Medicare has to become the social safety net. From the perspective of “Creative-Destruction” of jobs and sectors, a social safety net is needed to prevent the collapse of government.

Let’s look at the mechanism from the perspective of a “Capitalist”. There is no “concrete” proof of income growth for the aggregate. China and India has provided hundreds of millions of new labors, with respect to the US of A labor force. India is somewhat of a “Free Market” economy. With that stated, India is a natural barrier, respect to the US of A’s labor force, due to its lower wage and salary structure. China is an unnatural barrier due to its use of a Command Economy. Let’s face it, the healthcare sector has to go through a deflationary period. There is no force on Earth that will prevent this, from the “Capitalist” perspective. By healthcare sector I mean the providers, insurers and venders.

Let’s look a government program that should have had some cost control: Prescription Drug Program. I’m a “Capitalist”. I am a big customer. I expect a discount from my venders. I should expect the US of A government to get a discount from drug manufactures. After all, this is the “Capitalist” way.

Let’s look the delivery system. The healthcare delivery system is a “Capitalist” business. Treat it as such. Healthcare has to become a commodity. To achieve this, the regulatory frame work has to be created to allow the “Free Market to do its thing”. Split the malpractice insurance into “High Risk” and ”Low Risk”. Allow the pooling of US of A’s citizens, via state boundaries, into the “Low Risk” insurance. Have the state find the “High Risk” insurers. One can believe that if the state can not find a policy at a reasonable price due to its tort laws then those laws will be changed.

Once the regulatory frame work is known and stable one can conclude financial services will be created and sold to HMOs. Products such as, but not limited to hedging, interest rates, lost of income due to subscribers lost, etc.

Let me tell you a story. I developed blood poison in bootcamp. I saw a first class who basically nodded his head and said that it was blood poison. A Warrant Officer stepped in and confirmed the diagnosis. I did not see a doctor.

A change of perspective is also needed for the healthcare system. Airline pilots no longer pilot the jet. Pilots are now “Cockpit Managers”. Through the use of cameras and expert applications, doctors have to become “Managers”. The training of “Healthcare Specialist” is within the realm of a “Capitalist”. One does not need to be a doctor to reattach a finger. One just needs the training and equipment to do so. Specialization is natural to a “Free Market” economy.

You get the idea.

Viva La Revolucion!!!!