Only one bank failed Friday at a cost of a little over half a billion USD. The FDIC has doubled its operating budget for 2010 and have publicly stated they are anticipating that the pace of failures will pick up. This banking collapse has already cost nearly double what the Reagan/Bush banking collapse did but there is no allowance for toxic assets in either debacle. The government assumed about a trillion dollars worth of bad assets in the early nineties but was able to unload most of it over time and only lost a few hundred billion in the process. This time the treasury and the Fed have eaten some 14 trillion worth of toxic assets and are on the hook for another 10 trillion and no telling how that will settle out in the end.
We are really in a neo-feudal age where the aristocracy is using paper pushing schemes to separate the peasants from their wealth. There is talk in Washington of beginning to tax the top one tenth of one percent who have half the income in the US and pay only 17 percent taxes on average. Needless to say the ruling class says “we are not amused” so don‘t hold your breath. Their plan is to drive the standard of living down to a level befitting our third world station.
The really big problem is that they have stolen our ability to create new wealth and sold it to China. Historically a Great Depression shakes out in about ten years as new businesses establish themselves. Often it can lead to war such as the American Civil War that was precipitated by the bank panic of the 1850’s. More Americans died than in any other war, so far. The only real winner was the bankers.
Having been out-sourced, we lack the ability to do much but make war on behalf of the oil companies and other multinational corporations in order to steal resources. We have become a nation of mercenaries, we‘ve done that work before but now there is nothing else. There is money in war if you aren’t part of the cannon fodder class. www.prairie2.com