There’s A Lot Less Real Money Out There

A while back, I made a prediction that something bad was going to happen before the end of 2011. I think the recent stock market plunge qualifies as “something bad.” Where have all the trillions of dollars gone from the stock market?

I think Wall Street is up to its old tricks and harvested the public’s hard earned 401-K money—again. The stock market has been an awful place for the “buy and hold” investor to park his money for the past 11 years. The little guy has been fleeced time and again by the short selling sharks. Back in June, James Howard Kunstler wrote a piece on his blog (Kunstler.com) that ended with this statement: “Bernanke, Obama, Geithner are powerless against the dark lurking churn, though they can easily make it worse. What a summer we’re in for. Get out of the stock market.” (Click here for the complete original post.) How can they make it worse? Print lots of money and bail out their friends. Telling people to get out of the market was a stellar call. Mr. Kunstler is today’s guest writer, and according to him, things are going to get a lot worse before they get better. Please enjoy his excellent post.—Greg Hunter–

Change You Don’t Have to Believe In

By James Howard Kunstler

Guest Writer for USAWatchdog.com

A waterfall of woe broke over all the realms of money last week – including especially the realm where we determine just what money is supposed to mean – and a lot of folks barely made it to a rooftop, or a floating log, or some scrap of high ground, where they sit wet and shivering, expecting to get slammed again. The torrent of events is still flowing and there are countless dangerous objects bobbing in it. Remember what that in-rushing ocean was like in the Fukushima tsunami? A wall of miso soup strewn with Toyotas and houses instead of squid rings and fish balls. Try swimming in that. (Try swimming in your Cuisinart on the guacamole setting.)

Europe is telling itself one cockamamie story after another. We’ve got a rescue fund! Only it has no money! But we will bail out Italy nonetheless! But Italy is too big to bail out – and we tried stuffing it under the carpet, but there’s no more room with Greece, Ireland, and Portugal already suffocating in there. The whole G-20 is yakking on the phone as I write, hatching fresh cockamamie stories. Oh, now it looks like the European Central Bank will ride to the rescue with a dispatch satchel full of good intentions. They said the same thing last time, a month or so ago, when a caryatid fell on Greece’s head. They are not so sure what money is either. Is a bond like money? Maybe not so much anymore. A stock portfolio? Feh! A Euro? The damned thing is starting to look like a ball-and-chain custom-crafted to weigh down Germans. (And, let’s face it: they never did pay any of us for World War Two, really, except what they had to fork over to get the communist side of their own country out of hock. Their guilt-o-meter is still buzzing, I’m sure.) All I know is I hope the whole gang printed up some fresh lira, francs, marks, drachma, pesetas, punts, and whatnot. It would be nice to go back to one of these cute places some day at a discount.

Did you admire Standard and Poor’s sly, Friday night downgrade of the United States Treasury bond rating? I was probably the only one in the whole country besides Anderson Cooper not out eating something bigger than my own head at Applebees, or watching the “Footwear Clearance” show over on the Shopping Network. However, I’m not the only one in America asking where do these S and P punks get off downgrading US bonds when three years ago they wore out their Triple-A rubber stamps on the cartloads of stinking offal that Angelo Mozillo and other mortgage rustlers were pawning off as bond-fodder on every Frankenstein “investment opportunity” pumped out of the Wall Street CDO mills. Government officials were righteously seething over S and P’s chutzpah, but I suppose when they tried to ring-up Eric Holder over at the DOJ they got connected to some call center in Uttar Pradesh where a friendly fellow named “Dale” picked up. China’s government-run newspaper virtually spanked the US: “Learn (thwack) to live (thwack) within (thwack) your (thwack) means!”

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