Could it Happen Here?

Despite hard times, what possibly could happen here in the land of the free and home of the brave? Hasn’t the US always stood for and protected the civil rights of the individual. No, it hasn’t .

In fact, the United States has a long tradition of violating civil rights and even the constitution itself. Going back to the first depression, which our current condition is likened to, FDR, at the beginning of his first of four terms, declared a national emergency and closed the banks. Spooked by the economy, people had been turning in their gold certificates for physical gold. With some exceptions, all gold was confiscated and all gold certificates had to be turned in for paper currency backed by trust in the US. When the banks reopened, all safe deposit boxes were sealed. Boxes could be opened only in the presence of an IRS agent. **oh, I didn’t know that**
Ok, but that was a long time ago you say.

In April 1971, in response to demands for gold from foreign powers, Nixon, unilaterally, without consulting foreign governments, broke the Bretton Woods agreement. He took the US off the gold standard and replaced “redeemable in gold” with the “full faith and credit of the USA.” **clears throat**

From Reuters on October 7: “The Group of Seven is no longer effective and should be replaced by a steering group that includes new emerging economic powers like China, India and Brazil, World Bank President Robert Zoellick said.” Further evidence of the US’s decline in international influence and prestige, the Treasury has bowed to pressure and will allow the IMF to examine its accounts. **gulps**

Just yesterday, October 21 on the Fed’s website: “The Federal Reserve Board on Tuesday announced the creation of the Money Market Investor Funding Facility (MMIFF), which will . . . provide liquidity to U.S. money-market investors. The MMIFF complements the previously-announced Commercial Paper Funding Facility . . . as well as the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility. The Federal Reserve will provide up to $540 billion in loans to help relieve pressure on money-market mutual funds beset by redemptions. ” On the surface, this sounds great; no more breaking the buck and suspending withdrawals from money-market funds. Finally, a bailout for average folks. **sigh of relief**
However, the motive was not to protect citizens. More likely it was to protect China, which has about $5bn stuck in US money-market accounts, other governmental agencies and institutional investors.

And then there’s Argentina, which, at its peak, was among the wealthiest countries in the world. Bloomberg reported yesterday that “Argentine bond yields soared above 24% and stocks sank the most in a decade on speculation the government will seize private pension funds and use the assets to stave off the second default this decade.” Among the reasons for merging US commercial banks and investment banks is to collect deposits, which can now be lent out with no reserve requirements.** starts sweating**

How about the privatizing of Fannie Mae and Freddie Mac, effectively nationalizing the US mortgage market, and the propping up of and bailing out some of the largest banks, and subsidizing the largest US insurance company? And we’ve just gotten started; there is so much more to come. States and municipalities have barely begun with the multi-billion dollar bailout of California. The industrials are next and have started with bailout money for General Motors and Ford. **mops brow**

At what point do we acknowledge that the US is no longer a democracy with free markets, but has embraced socialism? Could it happen here? It has happened here.

mg