Corrupt

Corrupt

By Seth Grossman, Political Columnist
Reprinted from November 5, 2008 Current Newspapers of Atlantic County

“Not that you lied to me, but that I no longer believe you has shaken me.”
– Friederich Nietzsche, 1886?

?

Last December, the Federal National Home Mortgage Association, (Fannie Mae) was broke. But few people knew it because $2.27 TRILLION of junk mortgages it had guaranteed were “off-balance sheet”.

Any honest business in that shape would have shut down, sold its assets, and paid every creditor and investor his percentage of what was left. Any dishonest business would have been shut down by the government.

That’s what the government did to Charles Ponzi’s company in 1919.
Although Ponzi ran “the biggest swindle of the century” his investors got back more than a third of their money – a lot more than what most Fannie Mae and Freddie Mac investors will get.

But the government didn’t shut down Fannie Mae and Freddie Mac.
They are both still in business guaranteeing more bad loans and borrowing
more money!

Last December, Fannie Mae borrowed $7 billion by selling 250 million shares of “Series S” preferred stock to investors around the world. The deal was done by Bank of America, Bear Stearns, Citi Bank, Deutsche Bank, Goldman Sachs, JP Morgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, and UBS. These ten investment banks shared $70 million in fees off the top.

Five months later, when that money was gone, it borrowed $2 billion more. It sold 80 million shares of “Series T” preferred stock. The ten banks who did that deal shared $80 million in up front fees. Barclay Capital, FTN Securities, and Wachovia Securities replaced Bear Sterns, Lehman Brothers, and JP Morgan.

Three months later, that money was gone, so Congress loaned both companies $200 billion more. It was done in a way that robbed all previous investors of 92% of their value.

I was one of them. The same Wachovia Securities that did the last Fannie Mae deal also bought out the company of my out-of-state stockbroker’s company. For some reason, my broker bought Fannie Mae and Freddie Mac stock for my portfolio. I and a whole lot of investors are now suing the banks and brokers who did this. Why is the government giving them most of the $1.25 trillion bailout money? Why is it loaning them money at 1% interest, while borrowing from China and Saudi Arabia at 3.97% per year?

News Item: “President Bush invited the heads of state of the Group of 20 (G20) to join him for a summit on November 15 to discuss the current global financial and economic crisis. The G20 includes 10 major emerging economies of the world-including Brazil,China, India, Saudi Arabia, and South Africa among others-along with the members of the G8, Australia and the European Union”.?

?

What is this about? Why didn’t Democrat Obama or Republican McCain talk about any of this during the campaign? Why didn’t anyone say how we will pay for the $1.25 trillion (so far) bailout? How come none of it was spent on stuff President Bush said was “urgently needed” when he rushed through the bailout?

I bet that on November 15, George Bush – with the full support of the media and both parties – will do another dirty deal. It will make the last bailout look like chump change. In the end, the Chinese, Europeans, and Saudi Arabians will control our economy.

So I’ve been busy during the past two weeks. I wasn’t working, earning money, and paying taxes like before. I was working just to keep what I already earned.

I emptied my dollar bank accounts and mutual funds. I opened up some safe deposit boxes. I bought some gold and silver bars and coins – and some Australian and New Zealand government bonds. I also bought stock in Canadian gold mines, British oil fields, and companies that make food and medicine. Have any better ideas?

During the past few weeks, I met lots of people doing the same thing. Although the price of gold fell sharply from $960 to $720 per ounce, the dealers tell me that gold and silver coins and bars are in great demand, and hard to come by.

If enough people do what I’ve done, the government will soon be as broke as Fannie Mae and Freddie Mac. But every time the government acts to “fix” the economy, instead of enforcing fair and equal rules to secure liberty for everyone, it scares more people into doing what I’m doing. This makes things even worse. Then the government acts to “fix” things again.

For more information, visit www.libertyandprosperity.org or contact Somers Point attorney Seth Grossman at grossman@snip.net or 609-927-7333. Seth Grossman hosts a two way talk radio program every Saturday from 8am – 9am on WVLT Vineland, 92.1 FM.

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