Wednesday, December 10, 2008

The Economic Crisis

I've lived my entire life in a money crisis, so I guess I'm used to what others are starting to experience. It's scary ain't it?!

Today I read that the T-Bill is trading in negative rates. I guess this may say something about the full faith and credit of the United States Guvmint.

Treasury bills, notes and bonds have always been the safe-havens of trust. As in the Savings Bond your Uncle Willy gave you when you were a tad of five years. "Just think young Marco, in a mere 20 years from now you can cash this sucker in for $25. And to think it only cost me $19."

Since the Bread and Circuses portion of the program ended in early November, we have America's finest minds working on a solution. Last year we all got a stimulus check. I used mine to pay bills.

The U.S. Gummint supplied the nation's banks with their $700,000,000,000 stimulus check to stimulate the economy. So far, my economy ain't been too stimulated. I haven't lost sleep waiting for any bankers to offer my a fist full of cold cash. However I have heard complaints in the news about banks not utilizing the $700 billion. I've even heard that one bank used it to buy a Chinese bank. I guess they had a yen for Chinese that day.

And now the Congress is workin' overtime to give $15,000,000,000,000 to 3 American automobile manufacturers. They also want to appoint a car czar. What they really needed was a bank czar. The current fellow seems nice enough but I don't believe he's holdin' the reigns tightly or crackin' the whip enough.

Who can afford to buy a new car anyhow? Oh yeah all those newly scared folks that aren't used to the economic crisis.

We are told the trouble with American automobile manufacturers is the Legacy Cost. Legacy cost is an academic term that refers to the fact that retired employees of automobile companies are receiving pension benefits, health insurance benefits, discounts for purchasing cars, company paid life insurance and death benefits. What the academics don't factor into this phrase is that the management of the automobile companies has dipped into the pension trust too many times and like much of the rest of us has run out of options on coming up with new sources of income. Like it or not, union benefits have members believing that Santa Claus comes every month.

What I think should happen is the car czar should meet with the bank czar (I guess that would be the fed head) and see about a nice low interest loan of say around $700,000,000,000 to stimulate the economy.

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