Crying Wolf...

What if Ron Paul is wrong?
What if Treasury Paulson is right?
What if the american population is wrong?
What if the senators and representatives are right?
What if...this bailout bill is actually a good thing?

simple questions but until today, i never really thought about it...i had one strong idea and that was that bailing out companies with borrowed money is very very bad. Its socialism and in the long run not only does it kill the dollar but it also gives companies incentives to take on risky investments. It will kill the free market as we know it and make the people ever more dependent on the government. This is all bad and heroes like ron paul are very certain of it...and well...much of it is correct...

devaluing the dollar by throwing cash at financial institutions is bad but that is not the guaranteed result of the bill. I just finished reading a summary of the latest bill and i feel it can save far more money in the shortrun as well as the longrun from having it passed than rejected. strong uncertainty surrounds the supporters' hope that the government and taxpayers can actually make money in the long run from these mortgage bonds. But looking at pure numbers, IF the gov't can buy these assets at a decent price and the rate of defaults on mortgage payments don't get worse, we really will make money on it. (I doubt that profits from the bailout will ever touch taxpayers hands, but thats another topic. ) the rate of defaults and foreclosures seems high but i heard that only about 20-25% of all mortgages are actually behind on payments. and it doesn't seem like it will get much worse, unless of course, lending of money from banks cease...That will be the next shoe to fall...it is already starting now and if nothing is done about it, credit will definitely be hard to come by. imagine that...GDP's backbone is the consumer...and the consumer's main financial tool is credit. nobody buys houses or cars on cash anymore...its all credit...we cannot expect the housing market to recover or the auto industry to improve without easy credit. Once credit becomes scarce, then we will see the next big sector to breakdown...that being the retailers and tech. We are feeling it now but no huge corporations have went bankrupt yet. I predict that if credit continues on its path, the retail sector will be as hard hit as the financial sector...huge companies built at the turn of the century will topple...and that would be pure armageddon...unemployment will skyrocket and we will be like japan...of the 1990s...the credit market should be our biggest concern now...its on its last breath...without this plan, it will fail...and the economy will tumble with it...



basically i am saying that the plan is not so idiotic that it will kill our dollar...ron paul is right that killing the dollar would be horrible...but i think this bailout will do little to kill the dollar in the long run...despite hating to side with paulson, i do believe that way less than 700B will be used or lost...and that a profit might actually be seen...its actually more likely than a loss...policing the world with military spread all over the world is throwing money straight into the gutter....this ain't that...its a good plan...well..its better than anything else we got at the moment...

so why would i call this blog entry "crying wolf"???

well that has to do with hank paulson and the bush administration. for too long now, we have been lied to about gov't spending...the american ppl didn't have a voice in deciding on the war, on the interest rate cuts, nor of the numerous bailouts prior to this bill...and all americans are are fedup...i think the media is fed up too...that is why we such backlash and bad press about this bill...

basically, we were lied to...for too long...and about too many things...now they really might have a good plan and nobody cares...all we know is that they are full of shit...and that is why this bill is having so much resistance...its definitely a lesson of what comes around goes around...the gov't lied and now paulson literally had to get down on one knee to beg for help...its definitely time to look objectively about the bill and go against public opinion...

remember...u can't become great by following the crowd...95% of them are usually wrong...