By BRITT COMBS
Thursday, July 17, 2008
My grandparents learned the hard way, and yours probably did too. They squirreled away their meager dollars in a bank back in the 1920s and looked to a better retirement than their farming parents had had. When the banks failed in the early 1930s, many of them lost everything they had saved. They were middle-aged, broke as teenagers and started again from scratch.
They lived poor as dirt for 20 years because they trusted the system. By the time they recovered, they were old. The best they could hope for was a better life for their children and grandchildren.
They came up with cute little axioms to impart these hard-learned lessons to us: "If you can't pay cash, you can't afford it." You remember that one. "If it sounds too good to be true, it more than likely is." Some would put it bluntly: "Don't put your money in a bank, you daggum fool."
As the run on IndyMac bank continues, depositors are learning what our grandparents knew. The Federal Deposit Insurance Corporation (FDIC) only insures your bank deposit up to $100,000. The AP on Monday quoted one miserable depositor at IndyMac. He said he had about a quarter million dollars in an account at that bank. He hoped to recover a hundred thousand that day and maybe, just maybe, get 50 cents on the dollar for the rest of his life savings.
The fact is that if a general run ensues, the bank's doors might be closed. How much does he have in his checking account? He'll find the bank might limit his withdrawals to $1,000 per month.
The same story quoted another depositor. "I have full trust in the federal government," he said. His trust is misplaced. History has revealed a few things beyond dispute. The federal government caused the problem in the first place, and they don't care what happens to you, so long as they can keep you brainwashed into still voting Democrat and Republican; so long as you keep bleeding out taxes.
The federal government we trust so fully created the Federal Reserve and eliminated Treasury dollars redeemable for gold or silver and replaced them with Federal Reserve dollars not redeemable for anything. Their value is based entirely on the voodoo machinations of the Fed, and the gullibility of the people to keep accepting them. Inflation has been our companion ever since.
The government routinely underestimates inflation by excluding food and energy from the accounting. With government-mandated ethanol use driving up the price of food and the collapsing dollar driving up oil prices, food and energy are central in the inflation picture. These costs, along with the mortgage crisis and America's increasing war debt, will be felt across the board.
Now dollars are plummeting in value on the world market. As the cost of goods escalates we are faced with a terrible fact: The manufacturing infrastructure of the United States no longer exists as our fathers knew it. We have been led down the primrose path by the globalists of the Republican and Democrat parties, and we will pay.
On Tuesday, General Motors announced sweeping plant closings. The union workers of Michigan, who lived so fat and happy for so long by striking their way to better and better contracts now find themselves out of a job. Their employer can no longer afford their workers.
GM, the banks, mortgage borrowers and mortgage lenders now all clamor for the government to bail them out just as they bailed out Chrysler and the occasional airline. We want our government to apply the principles of socialism to the risk inherent in our business and financial ventures. The pitfall is that when consequences are eliminated we tend to take very foolish risks. The result will bankrupt us all. Even those of us who have been frugal are finding the value of our dollars plummeting.
Our grandparents had two advantages over us. They had a family farm to which to return, and they had a network of domestic manufacturers that were in the same boat with them. Not many of us have parents with a farm, and manufacturers are loosing confidence in dollars with each passing day.
Ron Paul warned you months ago. How many of you voted for him? Not many. You voted for McCain and Obama, and either of them will continue to loot your savings through the tax called inflation. Either of them will continue the socialist economic policies that have gotten us into this mess.
It has been said that a fool and his money are soon parted. I say a fool and his money deserve whatever they get. It's too bad that the fools of this country are dragging the rest of us down with them.