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Saturday, July 19, 2008

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US is Headed for a Civil War!

Yes, I am not joking. There is a very high probability for it. People are very frustrated with the government. The government there is not at all democratic. It is more like dictatorship or Nazi type. But at the same time the leaders bow before their people giving various reasons for their actions. They keep saying whatever they are doing is only good for the people whether it is attacking other countries or helping gamblers.

This will be another American Civil War but in 21st century. This time it is because of economic reasons. It used to be because of social and cultural reasons.

Lot of money is lost in the derivative gamble by many banks and investment firms. They are bankrupt if not for the clever accounting norms. They keep running under borrowed times. But slowly one after another will run out of options and declare bankruptcy. If US govt. takes steps to save each and every gambler, the tax payer will be loser in the end. That seems to be the most probable thing. Simply, the leaders can say they had to take that action or this action to avoid panic in the financial markets.

Recent developments in the last week are all behind the scenes once again planning to lend a big hand to the biggest mortgage lenders Fannie and Freddie. Presently these are allowed to take emergency loans from FED. But if their conditions keep deteriorating there is plan to give unlimited loans to them (by printing paper money) and taking their burden of debt on to the government. They say they are simply too big to fail. Someone said that Titanic was also too big to fail. Now tell me if this persistent behavior on the part of government will not induce a strong reaction from the people. That is definitely going to happen. Just check the comments on Yahoo Finance, to know what is presently running in the minds of many Americans.

In a scenario like this, I don’t know what will happen if our government completes the nuclear deal. In the event of supply disruption because of civil war in US (and may be some European countries also), we have to see what “corrective measures” our government will take. Moreover I don’t want a civil war here in my homeland. Let us hope that does not happen now.

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