The $700 billion is for the big banks and any other individuals and corporations that the US Treasury deems worthy of receiving the money. The bailout package will affect the middle class and homeowners at risk of foreclosure by making it more likely they will lose their homes.

©renjith krishnan - freedigitalphotos

©renjith krishnan – freedigitalphotos

The government is going to create the $700 billion out of thin air, borrowing it from the Federal Reserve and diluting the supply of money in the economy. This will necessarily cause inflation and drive up the prices for many goods and services as the value of the dollar is debased.

Thus, homeowners already struggling with their monthly bills will have to pay even more for gas, food, and anything else they need to purchase because their money will be worth less. With money even tighter, there is a far higher chance they will fall behind on their bills.

But the average American can also take comfort in the fact that, even if they do fall behind on their mortgage or credit cards, the banks they owe the money to will be protected by the government bailout package. Many more people will probably voluntarily default because their money has already been stolen from then to bail out the banks.

Otherwise, noble middle class Americans can hold their heads high, knowing that they are making a sacrifice to bail out huge banks while giving up their own credit scores and financial futures by defaulting on credit cards, car loans, and mortgages because their money is no longer worth enough to pay these bills.

And then there is another wave of Option ARM resets that will be coming in early 2009, causing more foreclosures and necessitating more transfers of wealth to the banking system. It would probably be a very safe bet that, after the current wave of bailouts have been distributed and the American people impoverished due to inflation and debasement of the currency, more bailouts will be required.

It may resemble Germany in the early 1920s, as hyperinflation drove up prices by billions of percent per year and the government couldn’t print the money fast enough for the people to spend it. Of course, it’s much easier to inflate now with over 90% of all dollars just existing as electronic points, but debasing the currency always leads to its destruction.

Also, if this latest $700 billion bailout goes through for the banks, many people will realize that it doesn’t matter if they pay their mortgages or credit cards or car loans ever again. After all, the banks will find some way to steal the people’s money anyway in order to pay off the defaulted loans, so consumers will have their debts paid for them even if they can not afford to do so directly.

So there is no incentive for people to keep paying their bills, since money will be stolen from them no matter what to give to the banks for free. They might as well default on all their loans and let the government deal with the bailouts of large corporations that are hurt the most by the poor economy.

Another titanic bailout in the near future? We can probably count on numerous small and large bailouts continuing for a number of months, if not years, as the government does everything it can to prolong the economic crisis and assist with the transfer of assets from American people to multinational corporations.

The following two tabs change content below.

Admin

Latest posts by Admin (see all)

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>