by Tom Koecke

Created on: July 20, 2008

President Bush recently held a press conference in which he announced some temporary cures for the ailing financial and mortgage markets. The gist is that the federal government is changing the way it deals with Fannie Mae and Freddie Mac by allowing about a one hundred fold investment from $3.25 billion to $300 billion, and allowing government investment in stocks in the ailing agencies. He said he wished he had a magic wand to fix things, and, more factually, that he is not an economist.

We should all wonder where this money to invest is going to come from since the federal government is already running record deficits, though I suspect some of us really do know. It will be coming from nowhere, which means that the money supply is about to increase again. What that translates to is greater devaluation of the dollar than we have already experienced this year. That means that those million dollar retirement accounts people have built up are not going to be worth a million dollars in today's money. Coupled with the drop in the stock market, in which most of those retirement accounts are invested, those million dollar retirement accounts will not retain their face values.

Folks, it is time that we face the facts about what is happening, and demand that the federal government stop pouring good money after bad money so we can retain some semblance of wealth in this country!

THE ECONOMY AND UNIVERSAL LAWS

People tend to not regard such things as gravity, inertia, and balance as applicable to non-physical entities such as the economy. However, universal laws apply to everything in the universe, and the economy is in this universe. If people continue to demand solutions that create negative gravitational forces that do not provide outside forces to get things moving positively, the imbalance in the economy will only progress creating an even greater depression than the one that is looming on the horizon. The problem is not simple nor painless, and neither will be the solutions.

One of the greatest problems we face is that the greater mass of people want the solutions to be on the backs of the smaller mass of people. The greater mass rules is the basis for democracy, and the solution falling onto the backs of others is human nature. If we are to get through this without creating greater problems, the greater mass of people will have to stop buying marketing slogans, and will have to defy human nature for the greater good of mankind.

Unfortunately, both are unlikely.

Despite

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