I knew it! In my previous post, I almost predicted that the government’s bail-out of the financial system would expand to cover foreign financial institutions as well, but was afraid of coming across as alarmist, ruining my credibility. Well, it’s here, folks! This Reuters article contains a “clarification” by Treasury Secretary Paulson, explaining that, while the intent is to purchase “mortgage-backed securities and whole loans” from American-based companies, the plan also gives Paulson and Bernanke the power to extend its purchases to non-American based entities with “significant operations” in the U.S. and beyond! In other words, the plan gives them the power to bail out every financial institution in the world with American taxpayer money! Clearly, this plan will expand from $700 billion to trillions of dollars. This won’t save America’s economy. It’ll destroy it forever!
I’ve warned repeatedly of the danger of the sell-off of American assets used to finance the trade deficit – that it also meant foreign control. Now the worst case scenario is being realized. As the American financial system crumbled, foreign banks refused to help and have instead demanded that the American taxpayers keep them whole. American policy is now being dictated by our foreign owners including, now more than ever, our trade policy. Still, even now as I write this, the arterial bleed of $2 billion per day of our wealth continues to fund The Global Trade Welfare State.
As far as I’m concerned, this part of “The Plan” makes it a deal-breaker. Enough is enough. It’s time to draw a line in the sand. I strongly urge all of you to contact your senators and congressmen and implore them to vote “no” on this plan. If you’ve never contacted them before, just click the “Write Your Congressman” link on the right side of this web page, listed under “Important Related Web Sites.” Yes, I realize that failure to pass this plan may result in a depression, but the alternative is much worse – the end of the United States as a sovereign entity.