Saturday, March 29, 2008

The Beat Goes On

The Beat Goes On

“As hindsight is always 20/20, we should take the time to highlight what we can learn from these past tragedies. First off, we should point out that most market volatility is all our fault. In reality, people create most of the risk in the market place by inflating stock prices beyond the value of the underlying company. When stocks are flying through the stratosphere like rockets, it is usually a sign of a bubble. That's not to say that stocks cannot legitimately enjoy a huge leap in value, but this leap should be justified by the prospects of the underlying companies, not just by a mass of investors following each other. The unreasonable belief in the possibility of getting rich quick is the primary reason people get burned by market crashes. Remember that if you put your money into investments that have a high potential for returns, you must also be willing to bear a high chance of losing it all. Another observation we should make is that regardless of our measures to correct the problems, the time between crashes has decreased. We had centuries between fiascoes, then decades, then years. We cannot say whether this foretells anything dire for the future, but the best thing you can do is keep yourself educated, informed, and well-practiced in doing research.” Crashes

The US economy is faltering. It is teetering on the brink of a major implosion. The US dollar has been sacrificed by the Federal Reserve Bank in order to save the big Wall Street investment banks who created the fiasco in the first place. Even the most conservative and cautious economists are predicting a protracted recession in the US. Other economists around the world who are more grounded in reality are forecasting an outright global depression that will rival the 1930's. Booms and busts are part of the US economic landscape. There were major Stock Market crashes in 1987, 1998 and 2000 and we survived all of them. Most of us weren’t even aware there was an economic downturn other then possibly a change in our employment status. I was keenly aware of the crash because in 2000 and 2001 I was working part time for an Internet radio station and it went belly up. Despite our much vaunted disposable income in the billions (trillions within the next few years) most black people are only marginally involved in the US economy. What happens on Wall Street, in London or the global financial markets rarely impacts us directly. We’re just not in the mix like that. Sure a nationwide economic downturn impacts us, but its not like we have huge stock portfolios that are going to collapse or our generations old myriad investments will vanish overnight. We’re just not that into “investing’ or getting sucked into Wall Street Ponzi schemes.
I say this because even though there is an economic tsunami coming, just as sure as the sun will rise in the East, the US economy, the stock market and shadow banking systems are unraveling, we will be ok. We will not go under nor will we be destroyed. Most Black people have experienced hard times at one time or another so when the collapse comes, we will be in a better position psychologically to survive. Why, because even though many of us bought into the crass materialism and the foolish chase for the bling, we will be resourceful enough to make it as the coming economic crash plays itself out. We did it in 2000 when the recession came and went and AmeriKKKa experienced a “jobless recovery”. The term jobless recovery meant we didn’t get new jobs or higher pay as the recession supposedly abated. We survived the 1998 and 1987 stock market crashes. Most of us didn’t even know what was going on. We were clueless conditions on Wall Street were that bad. What is different now from then is today there are more immigrants who are willing to work for much less money which will impact an economy that is laying off more and more people. There will be more competition for fewer jobs and the competition will be more vigorous as more and more white folks get laid off. This will force us to become more resourceful and resilient as conditions worsen.
Boom and busts cycles are a part of the capitalist system. Many are deliberately caused by the big Wall Street investment banks, the Federal Reserve Bank (a privately owned cartel of private banks who set US monetary and credit policies) insider financiers and politicians. “A bubble is a type of investing phenomenon that demonstrates the frailty of some facets of human emotion. A bubble occurs when investors put so much demand on a stock that they drive the price beyond any accurate or rational reflection of its actual worth, which should be determined by the performance of the underlying company. Like the soap bubbles a child likes to blow, investing bubbles often appear as though they will rise forever, but since they are not formed from anything substantial, they eventually pop. And when they do, the money that was invested into them dissipates into the wind. A crash is a significant drop in the total value of a market, almost undoubtedly attributable to the popping of a bubble, creating a situation wherein the majority of investors are trying to flee the market at the same time and consequently incurring massive losses. Attempting to avoid more losses, investors during a crash are panic selling, hoping to unload their declining stocks onto other investors. This panic selling contributes to the declining market, which eventually crashes and affects everyone. Typically crashes in the stock market have been followed by a depression.” Crashes: What are Crashes and Bubbles?
Crashes and busts have been more frequent in recent years as increasing manipulation of markets has occurred as more and more suckers fall for the get rich quick schemes of the Wall Street con men. Wall Street insiders call this “pump and dump”. The brokers and Wall Street con men drive up stock prices by buying the stock themselves or promoting the stock or company to make it attractive to suckers. And when it gets to a certain high level, the con men start selling it. Next they dump the stock altogether so it inevitably collapses. The drop in the stock’s prices creates a panic and people start selling. Then the Banksters either buy the stock at a much reduced rate and then turn around and pump it again making huge profits. Or, they let the stock continue to crash like a lead balloon. Either way, the Wall Street con men make huge profits and move onto their next scam. In the event Wall Street gets caught short in their own con game, they put pressure on their politician friends and puppets who devise a taxpayer bail out. They did this for the Savings and Loan scandal (in which the Bu$h family: Daddy George, Jeb and Neil made out like the bandits they are) and they are toying with a bail out now to save Wall Street from itself.
Don’t get bent out of shape over the current and coming economic fiasco. The beat goes on. We’ve been through this before, we’ll survive. Make the necessary personal and collective adjustments. Try to get out of debt as best you can. If you default on your loans, don’t become discouraged, keep your head up, find or form a collective of good folks you can depend upon. Work within a social support network to bolster your spirits and help you navigate your financial affairs during these trying times. Wall Street is Wall Street, Washington is Washington and until the masses wake up and agitate for change; don’t allow the crooks and con men dampen your spirits or get you down. As bad as things are, we will survive. The beat goes on. There is a law in physics that says, a body (system) in motion remains in motion unless (until) it is acted upon by another countervailing force. This law has a corresponding application in the metaphysical realm. In order for things to be different (change), we will have to change our thinking, and do things very differently.


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