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Baldy's Bombast
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September 21, 2010
Even when drunk, I speak the bald truth
Early summer, 2002. I was really drunk. Wait, that's not quite true. I was what I used to think was really drunk. But by Southeast Louisiana standards, I was moderately buzzed. Okay, so I'm moderately buzzed and talking to a friend of mine who even by Southeast Louisiana standards was hammered. I was trying to give him a lesson in fiat money vs. sound money, but, being a financial adviser who had studied economics, he had no chance of grasping what I was slurring about.
Truth be told, I can't recall much of that so-called conversation, but I do remember telling him that within 10 to 15 years from then, or mid-2012 to mid-2017, the financial system of the United States would collapse. How is it that someone like me, drunk, with no formal education in economics, could see financial catastrophe coming back in 2002? (I know, I know: I have no proof that I made that statement. Whatever. I made it.)
Now, of course I hope that the above prediction proves to be nonsense. Unfortunately, I may not have been far off. In fact, that prediction may have been optimistic. The system may have already crashed.
Crashed? How's that? Before I explain, let me fast-forward from summer, 2002 to February 23, 2008, when, having sobered up, I found myself speaking to the Louisiana Republican State Central Committee at their annual meeting at the Old Capitol Building in Baton Rouge. I won't go into how I ended up speaking to that group, but I will say that I had been a Republican for only a few months, and I used that opportunity to scold about three hundred very shocked Republicans for ten minutes in the first public speech I ever gave. That's right, I went to their meeting on their home turf and let them have it for being largely responsible for so much of what they have been disingenously complaining about for years, i.e., wasteful spending, massive debt, overreaching government, etc. And during that speech (5:48 into this video; the acoustics and my speech-giving skills were horrible), I made this statement:
"What's approaching is not a dangerous storm cloud that threatens to batter our economy. What's approaching is an asteroid that will crush our financial system if we don't make immediate, major, fundamental changes." (Tom Kowitz, February 23, 2008)
What would possess me to make such a statement in February, 2008, considering that three weeks later, Treasury Secretary Henry Paulson would declare on CNN's "Late Edition":
"I have great, great confidence in our capital markets and in our financial institutions. Our financial institutions, banks and investment banks, are strong. Our capital markets are resilient. They're efficient. They're flexible." (Henry Paulson, March 16, 2008)
So?
So here are some lessons you can take from this: 1) Drunk people sometimes know what they are talking about; 2) It's really fun to scold a roomful of Republicans who deserve to be scolded; 3) Don't listen to the lies coming from Washington or New York about how "strong" or "resilient" our markets are, or nonsense about "green shoots" or "Summer of Recovery"; 4) Study this stuff yourself, because schools sure won't teach it to you (except for a few exceptions, such as Loyola University New Orleans).
Okay, so earlier I mentioned that the financial system may have already crashed. Wouldn't we have noticed? Not necessarily. The United States switched to a new system in 1914, after the Federal Reserve Act had been passed in late 1913. Society itself did not collapse, but the country moved to a new financial system, and the public never knew they were getting fleeced.
In March of 1933, FDR made it illegal, with certain exceptions, for American citizens to own gold. He made up some ridiculous excuses why this was necessary, but he did not say it was because the system in place at the time, not even twenty years old, had crashed, and the country was insolvent. But the gullible public gave up their gold, and never knew they were getting fleeced.
In July, 1945, economic experts put their impressive eggheads together and gave us the Bretton Woods system, putting us on what? Right, a different financial system. Most Americans probably had no idea that the previous system has collapsed and that they were what? Right, getting fleeced.
August, 1971. The Bretton Woods system collapsed. Again, most Americans probably had no idea that their financial system had given way, that their country was insolvent, and that they were getting fleeced.
Now we have TARP and bailouts and so-called stimulus packages, seemingly without end. As has happened several times in the past, the financial system of the United States may well have already crashed, and hardly anyone has noticed.
But here's a sober and sobering prediction: We will all notice the next crash, and it's not far off.
Even when drunk, I speak the bald truth
Early summer, 2002. I was really drunk. Wait, that's not quite true. I was what I used to think was really drunk. But by Southeast Louisiana standards, I was moderately buzzed. Okay, so I'm moderately buzzed and talking to a friend of mine who even by Southeast Louisiana standards was hammered. I was trying to give him a lesson in fiat money vs. sound money, but, being a financial adviser who had studied economics, he had no chance of grasping what I was slurring about.
Truth be told, I can't recall much of that so-called conversation, but I do remember telling him that within 10 to 15 years from then, or mid-2012 to mid-2017, the financial system of the United States would collapse. How is it that someone like me, drunk, with no formal education in economics, could see financial catastrophe coming back in 2002? (I know, I know: I have no proof that I made that statement. Whatever. I made it.)
Now, of course I hope that the above prediction proves to be nonsense. Unfortunately, I may not have been far off. In fact, that prediction may have been optimistic. The system may have already crashed.
Crashed? How's that? Before I explain, let me fast-forward from summer, 2002 to February 23, 2008, when, having sobered up, I found myself speaking to the Louisiana Republican State Central Committee at their annual meeting at the Old Capitol Building in Baton Rouge. I won't go into how I ended up speaking to that group, but I will say that I had been a Republican for only a few months, and I used that opportunity to scold about three hundred very shocked Republicans for ten minutes in the first public speech I ever gave. That's right, I went to their meeting on their home turf and let them have it for being largely responsible for so much of what they have been disingenously complaining about for years, i.e., wasteful spending, massive debt, overreaching government, etc. And during that speech (5:48 into this video; the acoustics and my speech-giving skills were horrible), I made this statement:
"What's approaching is not a dangerous storm cloud that threatens to batter our economy. What's approaching is an asteroid that will crush our financial system if we don't make immediate, major, fundamental changes." (Tom Kowitz, February 23, 2008)
What would possess me to make such a statement in February, 2008, considering that three weeks later, Treasury Secretary Henry Paulson would declare on CNN's "Late Edition":
"I have great, great confidence in our capital markets and in our financial institutions. Our financial institutions, banks and investment banks, are strong. Our capital markets are resilient. They're efficient. They're flexible." (Henry Paulson, March 16, 2008)
So?
So here are some lessons you can take from this: 1) Drunk people sometimes know what they are talking about; 2) It's really fun to scold a roomful of Republicans who deserve to be scolded; 3) Don't listen to the lies coming from Washington or New York about how "strong" or "resilient" our markets are, or nonsense about "green shoots" or "Summer of Recovery"; 4) Study this stuff yourself, because schools sure won't teach it to you (except for a few exceptions, such as Loyola University New Orleans).
Okay, so earlier I mentioned that the financial system may have already crashed. Wouldn't we have noticed? Not necessarily. The United States switched to a new system in 1914, after the Federal Reserve Act had been passed in late 1913. Society itself did not collapse, but the country moved to a new financial system, and the public never knew they were getting fleeced.
In March of 1933, FDR made it illegal, with certain exceptions, for American citizens to own gold. He made up some ridiculous excuses why this was necessary, but he did not say it was because the system in place at the time, not even twenty years old, had crashed, and the country was insolvent. But the gullible public gave up their gold, and never knew they were getting fleeced.
In July, 1945, economic experts put their impressive eggheads together and gave us the Bretton Woods system, putting us on what? Right, a different financial system. Most Americans probably had no idea that the previous system has collapsed and that they were what? Right, getting fleeced.
August, 1971. The Bretton Woods system collapsed. Again, most Americans probably had no idea that their financial system had given way, that their country was insolvent, and that they were getting fleeced.
Now we have TARP and bailouts and so-called stimulus packages, seemingly without end. As has happened several times in the past, the financial system of the United States may well have already crashed, and hardly anyone has noticed.
But here's a sober and sobering prediction: We will all notice the next crash, and it's not far off.
