Bend over…
4 October 2007In my junior year of High School, I had an old crotchety teacher for my Modern US History class. He was a pain in the ass, his lectures were often dry and boring.
However, I listened, and I retained alot of what he lectured about. In particular, the switchover from the Gold Standard, to the method of fiat currency we use today. While alot of what he had to say, as he rambled off on various tangents was lost to the ages (or my lazy synapses) one of the things he did talk about, was how our current money worked.
He explained, our money, at the core, is backed on credit, to a large part. But the key thing he said was, it’s backed on mortgages, and whether or not people pay them. It’s backed on the idea and the faith of people paying loans.
Now, I always understood this, on its face. I thought for sure, there’s alot more to it than that. And, I am sure there still is. But that old history teacher must be laughing at me in his grave, and started guffawing at me heartily once I read this article.
What happens when people cant, or wont pay their mortgages? Well, based on my old teachers theory, our monetary system would fall apart. Depression and chaos. It’s money backed upon a principle, an idea. It’s backed on faith. Faith that bank’s will make prudent choices as to whom to loan money to.
Unfortunately, they have not been making prudent choices. The subprime market is blowing up around us, and it’s reverberating around the world. Internationally, people are wary of our money. If foreign countries and banks wont buy our money, our bonds, our loans, and other investments…what does that say for us? For our money? What if we were selling, and nobody was buying?
What do you think would happen then?
We have generated alot of animosity around the world and back again. We have started wars, killed innocent civilians, and generally abused and pissed away most of the goodwill we built up after World War II. And now, in our collective greed, in our sheer and unmitigated drive for more, this country and the people controlling the economical base of it, have loaned piles and piles of money to people who had no business borrowing, especially under the terms they were given. And then, those failing loans were being sold to investors around the world who got the shaft.
Say what you want, but, if you stiff someone for billions of dollars, be it a drug dealer or an investor…they are not going to keep coming back. They are going to break your legs, for real or metaphorically.
And when we get *our* legs broken, it’s going to hurt. A lot. And it is not going to be pretty.
My old history teacher warned my class then: it was a system that eventually will grow unstable. Without being backed by a tangible, it would fail under the auspices of men and the things that they do. He was right then, as you can see…it is starting. Will it be a full economic implosion? I really do not know. But, I do know that I see bad things happening. How bad they will be is still a very open question.
The article in The Trumpet scares me more than any war, or anything else. I see the howling and the misery of what happened in the ’20’s, when bank runs were the norm. Bank runs? Happening today? You bet your sweet ass they have been happening. And the fact that it’s happening to banks barely involved in subprime investments, should make you lose sleep at night.
My dad used to say: America can not be invaded forcibly. Too many guns. We could peck at them on the beaches for *decades*. And, he was right. If America is going to fall, it will be from a collapse within. Much like Rome. And every other great power in the history of the world.
I used to deride that old history teacher, the capriciousness of youth led me to dismiss him as just an old guy with job to do, and not much to say one way or the other. But in looking back on it, he never really used the texts. He spoke to us from within, he used his mind to make sure we got the message, and not just the press release you find in history books. And while I used to dismiss him then, I appreciate him now. If he were alive, id thank him for imparting his knowledge, so I have a bit more understanding of what is going on.
He was right, all those years ago. About a great many things. And some of them are now coming to pass. Prophecy is a poor guide to live by, you never know until the events are upon you. But, this guy didn’t prophesy, he used his knowledge, and fact to make an informed opinion. And, it stuck with me.
I am glad it did.
Current Mood:
Alarmed & 
Worried
on October 24th, 2007 at 5:20 pm
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