Here is an excerpt of a report by Joan McCullough of East Shore Partners, 24 November 2008:
Questions: There are over 3 hundred million of us. There are only 638 of them. (435 in the House; 200 in the Senate; and the Three Stooges, Paulson, Bernanke and Geithner.)
- You wanna’ maybe walk me thru why we sit here and let them run roughshod over the top of us — and several, future generations of Americans, too?
- Can you draw me a picture of what possesses us to remain silent, having observed Wall Street pillage and plunder, making themselves fabulously wealthy in the process, setting off an unfathomable string of “unintended consequences”, noting that “unintended” is a substitute for “who gives a fig”?
Not the least of which is a credit crisis which has wreaked havoc around the globe. And which has managed to unmask glaring chinks in our financial foundation, up to and including the current crisis in Detroit, the student who can’t get money for school, the extreme financial duress of the states which, in turn, is giving rise to draconian measures, the world shipping industry at a standstill, the masses who have and who will lose jobs and the 96-year old widow who cannot transfer to assisted living as there is currently no market for her home.
We know which group and what m.o. is the root cause of all the misery. Why on earth would we allow the same group of maladjusted moon-calves to mete out the same m.o. as remedy? It is beyond imagination.
I also continue to wonder aloud why we are not already in the streets, protesting the fact that we are being robbed by the FED 24/7. While Mr. Bernanke fights demands for transparency as to what collateral and from whom it has been accepted because such revelation would be “counterproductive”, I ask this:
Do we have any idea what it means when the FED — which creates those Federal Reserve Notes which serve as our legal tender — refuses to reveal what is supporting them?
Clearly, it means that they are not proud of the collateral that they have accepted as replacement for the once-pristine backing of US Treasury bills and notes. Thus, it is reasonable to surmise that they have abused rules and regulations by accepting schlock in exchange for money, which transaction is the ultimate responsibility of John Q. Public. That alone, ladies and germs, should be enough to get your BP up.
Know this: We are easy prey and are being dispossessed by the minute. Think about that, will you? By what measure of audacity did they embark on the grand theft of the United States? By what measure of complacency do we allow them to continue to ransack our personal finances?
Perhaps the answer to her questions is that we are sheep, and unable to bear the burdens of citzenship. Time wears away the surface of things, showing the true metal underneath.
Afterword
If you are new to this site, please glance at the archives below. You may find answers to your questions in these.
Please share your comments by posting below. Per the FM site’s Comment Policy, please make them brief (250 words max), civil, and relevant to this post. Or email me at fabmaximus at hotmail dot com (note the spam-protected spelling).
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To read other articles about these things, see the FM reference page on the right side menu bar. Of esp relevance to this topic:
- about the Financial crisis – what’s happening? how will this end?
- about the End of the post-WWII geopolitical regime
- some Good News about America!
Posts on the FM site about the American spirit, the American soul:
- Diagnosing the eagle, chapter IV – Alienation, 13 January 2008
- Americans, now a subservient people (listen to the Founders sigh in disappointment), 20 July 2008
- de Tocqueville warns us not to become weak and servile, 21 July 2008
- A philosphical basis for the Batman saga, 23 July 2008
- The American spirit speaks: “Baa, Baa, Baa”, 5 August 2008
- We’re Americans, hear us yell: “baa, baa, baa”, 6 August 2008
- The intelligentsia takes easy steps to abandoning America, 19 August 2008
- Symptoms of a fever afflicting America’s culture, 5 November 2008
- The corruption of a nation is usually hidden, but sometimes becomes visible, 21 November 2008
A couple of thoughts:
The sheep haven’t reached the tipping point yet, the majority Americans are still fat, dumb and happy. Another downside to the obesity epidemic!
I think things might get interesting after the Super Bowl this year. After our primary circus is over what will distract the masses? Ice Hockey? Professional Basketball? Although American Idol is starting back up soon, maybe that will work.
Let’s hope the Obama Justice Department has plans to kick off some good old fashioned show trials pronto. I think by late winter/early spring the masses will be wanting their pound of flesh. Bernie Madoff anyone?
“There are over 3 hundred million of us. There are only 638 of them.”
If only it were that simple.
Tracing both sides from mid-1600 Irish Colonies/CW, the “sheep” do not fight ’til their starvin’; that said as a SAR, they also fight for land….and moved repeatedly from there [Virginia Colony] West of the Aps. My great-grandfather in the last depression used to let “homeless” gather corn from the 20 ACRE plot of what was ARK Territory [prior to selling out and moving to LA] while my great uncle tolled in a CCC camp on a “NEW DEAL infrastructure” project (which non-Keynesians would say was a waste;-(. I think the sheep are now awake and realize the financial institution/sector/elites were plotting their ‘outsourcing’ [of America] at which there was a little too much over-extension [aka greed].
As before we will need more regulation/NDII/Keynesian/Jeffersonians to contain globalists that desire ‘indentured’/’free’ labor without OSHA/EPA regulation. I do not think US workers desire to move out of US or like competing with unregulated countries (i.e.<ISO/OSHA/EPA/UNION) and millenniums are fast learners (i.e. will not take as long as earlier industrial worker abuses of fires in Chicago/New York; radium ladies; or irish manufacturing strikers of last century..not to mention Farm Aid/S&l fiascos of 1980s). Nothing is free. As always FM, Stupendous blog!
538. 100 in the Senate.
I continue to see plump, pampered American women cruising around in Suburbans, cell phones surgically attached to their ears. Still the norm in my area, not the exception.
Sort of reminds you of the picture of wealthy Chinese women in the last days of the Manchu dynasty, with bound feet and inches-long fingernails. They do it because they can.
At that, they may be made of sterner stuff than the men who indulge them.
It’ll be quite a job to make hewers of wood and haulers of water out of such sorry specimens…
Fabius Maximus:
So, we are sheep… fair enough to make that claim. The difficulty lies not in diagnosing the problem, but in the remedy. Precisely what are oridinary Americans to do? Do you recommend taking to the streets in arms? Are we to that point? Perhaps we are, perhaps not – only time will tell. What would Boyd do? What would he recommend in this circumstance?
I am being a bit hard on you, yes, but do you see my point? It is all well to point fingers and name-call, but what is to be done, what actions are to be taken?
My own view is that this is the 1930s all over again, and we all know what outcome that decade gave to us!
Ignore reality and it does have a way of biting one back, doesn’t it?
All the best —
One of the saddest things is that so many countries in the West look to the US for leadership and trends. Good and bad.
When the civil rights movement got going in the 60’s (arguably the US’s finest hour) it was copied everywhere. By and large to the betterment of the World as a whole. Here was this country with flaws (a lot of US citizens seem to think the US has no flaws, people everywhere else know better) BUT it was dealing with it, in a (roughly) peaceful, law abiding, democratic way. It’s finest hour?
But when the US tries to turn itself into a cheap imitation of the USSR, oppresses other people, heck oppresses its own citizens and tries to overturn a Constitution that many people gave their lives for .. well the elites of other countries say” oh well the US is doing it, so we can”. Hey, some (bit dark) people said something on a plane and they were banned off it and were ‘interviewed’ by the FBI? And that is Freedom? Stalin must be laughing in his grave.
So the UK moves into becoming, arguably, the most oppressed and least free Western State in the World. Australia, bangs up some of the most oppressed and poorest people in the World into gulags (this is not hyperbole) in another country no less.
Rights, freedoms, ripped up right left and centre. The new ‘State’ bugs everything, watches everthing and can jail anyone, anytime, for anything, for ever. Even reading or just thinking the wrong things can get you banged up now. Carry on this trend for much longer and the oppressed in the UK (say) will long for Russian freedoms (such as they are).
You know a lot of people gave their lives for our freedoms .. can we all do no less? Why do people in the UK tolerate restrictions more limiting than they had during WW2?
Not long ago US citizens lead the way by the millions to fight for what was right (not WW2, but the greatest fight .. against racism) and their example inspired so many people in the World to do the same.
Time for a bit of old US “enough, this is wrong and it will be changed” attitude again.
It is important to note that East Shore Partners is a research firm with an intended audience of institutional investors. I’ve never followed and I’m not sure of the context in which this was written, but comparing us to sheep is not fair to the sheep. Sheep are not complicit in their situation.
Institutional investors turned a blind eye to corporate governance and didn’t hold management accountable, question corporate waste or misguided projects.
Institutional investors and the rest of the investing world went against FASB when it tried to create accounting structures to provide greater accountability. There were very few exceptions who demanded greater accountability and more transparency.
Politicians and the American public are not expected to understand financial markets, accounting or corporate governance. Institutional investors and research firms should. They were not sheep, rather they are the frogs in boiling water who kept turning up the stove. May they boil on earth in the soup they created.
One other note in response to Pete. This situation is nothing like the 1930s. The problems of the 30s occurred because national GDP fell by 45%. Our current problems aren’t from a fall in GDP. They’re from a fall in demand due to excessive debts that created unnatural previous demand. If it’s similar to a situation, it’s similar to the 1870s when America had excessive debts from the civil war.
Rather than being lazy and sheeplike and looking at history, be brave enough to look at our current world, try and understand what is happening today and think.
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Fabius Maximus replies: We cannot compare our situation to the 1930’s because this downturn is still in the early stages. GDP has not yet substantially declined, but — as I have said so many times — the downturn started in the financial sector (“Wall Street”) and is just now hitting the “real” economy (“Main Street”).
The magnitude of the duration will depend on many factors, including the effectiveness of government policy. Policy errors can turn a problem into a disaster.
“the downturn started in the financial sector (”Wall Street”) and is just now hitting the “real” economy (”Main Street”).”
Our downturn started in the housing sector. The 30’s crash started with equities “wall Street”. Both were speculative frenzies powered by borrowing. The 30’s crash was leveraged purchasing of stocks leading to a price bubble, our crash was the leveraged purchasing of real estate leading to a price bubble.
“Do we have any idea what it means when the FED — which creates those Federal Reserve Notes which serve as our legal tender — refuses to reveal what is supporting them?”
I expect scrap of notebook paper, hastily scribbled in crayon. “IOU $10B — Citigroup”
In the 30’s banks were allowed to fail, the bank goes bankrupt, and their depositors just lost out. Now banks, other than Lehman, are not allowed to fail. That sounds simple enough, except their losses are so vast. We’ll find out if this works out any better.
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Fabius Maximus replies: Arbitrarily, the problem started in December 2006 with the collapse of many mortage brokers. More broadly, the problem started with problems in the mortgage market, part of the financial sector.
There is no such thing in most classifications as the “housing sector.” There is the construction industry, there is the housing finance industry.
Change is hard! And it’s even more difficult when the main source of information, the main stream media, is already somewhat onesided and interested in ratings. When the people are ready for change then there will be change. That time is just not here yet. When you start seeing teenagers lose their cell phones you know things are beginning to change.
And hopefully for the better. Of course we could stumble into our Ceasar/Napoleon/Hitler phase but with any luck we will avoid that!
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Your point is well taken and well made, however …
50 states times 2 Senators each equals 100 in the Senate, not 200.
“There are over 3 hundred million of us. There are only 638 of them.”
Unfortunately, your math is a little off here. If that were true, we wouldn’t be in this mess. There are actually a tremendous number of people in this country who either don’t understand, don’t care, or actually are happy that the government is taking the course that it is. Otherwise, these people would never have been elected (and re-elected). The other problem is that there are plenty of people in this country who know the “right” path our government should go down, plenty of bloggers among them, and yet they have no interest in putting their money where their collective mouths are and running for office. They seem content to sit on the sidelines and snipe, allowing the thieves in Washington to continue to get rich off our labor, instead of running, and maybe losing, but at least getting their message out there.
Nothing will change until things get so bad that people like us literally take to the streets and throw these bums out. Until that happens, they will continue to exploit us like the sheep we are, Democrat and Republican alike.
Well, of the 538 people who appear to matter to immediate policy decisions, we can add the massive bureaucracies which sometimes do their bidding. And sometimes leak about it.
But out of those 538 (plus bureaucracies), there are only 3 people for whom I voted, one of them is a lame-duck president who tried and failed to stop some of the conditions which led to the mortgage crisis. I do not trust the sense of the people in charge, but this representative government was voted on by people who apparently do. Our leaders’ low approval ratings do not really matter to them, apparently. Pelosi is safe, as is Rangel, Dodds, etc. Reid is potentially fragile, but the sheep who keep voting for them mustered more sheep to kick the Republican bums out then my fellow sheep could muster to keep the bums in. And many of McCain’s answers were to increase government power, not decrease it.
So I will write to my senators and representative. But Sen. McCaskill will not listen to me and could probably never earn my vote, so she has little incentive (and not enough sense) to listen to me. Sen. Bond is withdrawing from the game in 2010.
Severely limited federal government is the only answer, but we are a long way from that. Until the sheep notice that the government solves few problems and creates many, we are destined to repeat the failures the 76 Revolution was intended to fix. Then we can fix the overall power of our federal government and restrict the 3 branches to fulfilling their constitutional responsibility (where there is still a lot of flexibility). Barring that full realization, low corporate and personal taxes and a reasonable deficit would be enough to limit government. Which is why it won’t happen…
Oldskeptic, comment #7: “Australia, bangs up some of the most oppressed and poorest people in the World into gulags (this is not hyperbole) in another country no less.”
Sheer hogwash OldSkpetic. These people are economic refugees pure and simple and have passed through at least one other country which isn’t persecuting them on their way to Australia by boat.
The alternative is letting them in without check or limit and things like TB are once again loose in Australia after heroic and expensive efforts to wipe it out.
There’s also the issue of lots of them drowning as the people smugglers don’t provide the most seaworthy boats. The Howard Government policy stopped the thing completely as they knew they would not be let in so there was no point in coming. Under the idiot Rudd Government the boats are once again on the water and arriving.
How’s the unrestricted illegal immigration thing working out for you in the US?
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Fabius Maximus replies: Open borders are working quite well in the US. Working well for our ruling elites, that is. For more on this see:
* Migration from the south into America: new people, new foods, new political systems, 4 November 2008
* America’s elites reluctantly impose a client-patron system, 5 November 2008
* Immigration as a reverse election: our leaders get a new people, 6 November 2008
The government is stealing our money, taking it from us, from our children, from our grandchildren, and we are content to sit back and let them do it.
Thomas Jefferson said it best {in the Declaration of Independence}:
Our government has outlived its purpose. It no longer functions as an instrument of the American people, instead now actively working to curtail the dreams of the American people. It wasn’t so long ago that the founders of this country recognized governmental tyranny for an evil that must be stopped, and they had the courage to do something about it, to keep their freedom. We must have the courage to do the same.
I’m obese … doesn’t mean I’m not pissed off.
I think we need to view the current situation as Demming would view it. In other words, our system is delivering exactly what it was designed to deliver. Otherwise we’d be getting something else (better).
Over the years the aristocracy has changed the original design to consolidate power in their hands and insulate them outside influence. Omnibus bills, pork projects, lifetime service, deficit spending, “Corporate Income Taxes” , etc.
The system’s components include the voters, politicians, media, lobbyists, big business and a few others. Those of us in Business Improvement can also relate to another Demming thought. “Systems protect themselves.”
Look what happens whenever someone wants to change anything. Whether it is the line item veto, term limits or even an outsider trying to get in (i.e. Sarah Palin regardless of what you think about her). The system attacks!
We’re in big trouble. Our kids are going to kill us!
Mettle or metal?
I’m hoping for a heart of more than steel, but cojones de acero would do nicely.
Oldskeptic, comment #7: “One of the saddest things is that so many countries in the West look to the US for leadership and trends. Good and bad….”
You forgot to add that it’s all BushitlerCheney’s fault. Christ. Rendition wasn’t create by Bush. Waterboarding was approved by Democrat members of Congress. Obama is already continuing Bush’s FISA circumvention. But I bet you think Bush invented all of it – that he is Satan incarnate and uses the Constitution to wipe his evil ass. GWB is the biggest fall guy of all time. If he was even half as evil as he is made out to be Obama wouldn’t be the next President. All of this is being done because it’s in the country’s best interests. Does that mean its good, moral, or that I like it? No, but I give our government props on at least having the balls to do what is necessary.
Back on topic, it is really the bureaucracy that’s the problem. The Federal Government employs almost 2 million people. Elected officials are only 0.03% of the problem, at least from a manpower perspective. Why don’t we employ a flat sales tax that would bring in more revenue, be more progressive, save the environment tons of paper and resources, and billions in man hours? Because the IRS would cease to exist. We need a political party that advances the concept of small government. Only then can we possibly hope to prevent the current crisis/sacking of the treasury from happening again. I won’t hold my breath.
I like things just fine. I make $40K in my government job (e.g., above the table) so, I don’t pay any federal income taxes what with all the credits I get. In fact, I receive about a $2,000 check at the end of each tax year. Thanks suckers! With the $20K I make under the table, I’m clearing over $60 large tax-freakin’-free.
Why in the world would I want anything to CHANGE?
You people aren’t sheep. You’re MORONS. Why shouldn’t we stick it to you? A sucker and his money aren’t just easily parted, they should have never gotten together in the first place.
Enjoy your shearing.
200 in the Senate? Not the US Senate…
Begging to differ. Mostly sheep. Some not. Those who are not anxiously await the “shearing” and then maybe we will get real leaders again instead of the glorified nannies the sheep keep electing. Just a matter of time.
Baaaaa
“There are over 3 hundred million of us. There are only 638 of them.”
Which is why they have mastered the art of divide and conquer. Breaking up the thing formally known as “the American people” and teaching them to fear each other was key in getting us to this point.
Oldskeptic, comment #7: “Not long ago US citizens lead the way by the millions to fight for what was right (not WW2, but the greatest fight .. against racism)”
Exhibit A under “divide and conquer”. If you think that “racism” is the greatest evil the world has ever known, you’re a lot less likely to be upset with the state for merely robbing you blind. So the state programs people to think in exactly this fashion. “We’ll protect you from those blacks/whites/Muslims/Christians/whatever! But you gotta pay us tribute!” Vast numbers of people in the West accept this without question.
The behavior of my sheep ( 50 Jacobs )
Ewes defend their own lambs .
Rams defend their ewes.
Only to the point their own lives are not in serious danger.
They are excellent at assessing seriousness of threat aand how to react.
They flock together , the cleverest are in the middle.
Lots of people trying a round up : flock breaks past weakest link .
Even more people , or a trained dog getting too close : flock scatters in different directions .
Well trained dog, keeping well back : flock obeys ; but sheep in middle will flow through weak points in perimeter fence , taking flock with them .
Inviting ,open gateway : sheep go straight past , not through .
Killer dog : sheep bunch together , circle at speed , ones on outside mauled .
In UK we human sheep are at the ‘ moving from well trained dog ‘ stage .
For over 45 years we have been hearing and reading of the declining quality of education in the U.S. And with that decline, the degeneration of critical thinking. Anyone who still feels these warnings were merely filler for their various publication venues may now observe and learn. They were predictions.
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Fabius Maximus replies: That’s a powerful point! For a demonstration of this, see “A speech by the President which deserves close attention.” Could a President give such a speech today, or would much of the audience be unable to follow it?
The solution is to start from the bottom up and re-evaluate all that government is doing for us and to us, cut out the fat, fire the featherbedders, and create smart regulations that are minimally destructive and let entrepreneurs create the maximum possible number of new jobs. For the 48 states that have county government, repeat again at the county level. Then do it again at the state. Only then will we be experienced enough with the right sophisticated tools to tear apart the federal behemoth and remake it to properly serve the people at a size we can afford and with the least possible bad effects.
All throughout the various governments we have in the US we have problematic laws, wasteful spending, overactive politicos and corrupt deals to steal from the people (anybody remember Kelo?). I don’t care whether it’s a mayor, a county executive, a governor, or a president who picks my pocket. The effect is exactly the same. The difference is that I can get my hands on my mayor and give him a piece of my mind, something that is much more difficult with a president or a senator.
The American Revolution was led by the elite of the colonies, not the masses. The elite will be protected as much as possible to prevent a recurrence. We are sheep. Without a shepard we are easy prey for the wolves. In our case the wolves wear the shepards gown and carries the staff to control us not to protect us. The sheep are chafing. Hey, you are!
Even in the military, in combat the officers do not initiate a battle without orders from the leaders. Who is our leader? I am sure we will morph when a leader arrives on the scene.
The 300 million are homogenized. One to one they understand each other enough to know they are one tribe. There is not enough mystery in their beings to create a new government or to even overthrow the old. A simple ‘change message’ eased their souls. They are not so discontent as to see gates where there are none erected. They are sheep.
The sheep elected a man who will continue the legacy of deceit and massive spending. Amazingly, Obama admits the deficit will skyrocket–imagine if Bush came into office 8 years ago, proclaiming he’d grow the deficit by a trillion dollars a year…
’cause thats what we have now.
We sheep need a leader.
Jordan Clark’s blog
Very interesting post. However, the 638 or 538 or whatever didn’t get us into the credit crunch, WE did.
How many of the 3 hundred million of us have over-drafted credit cards to feed their starving child? How many have struggled with giving up their last penny to put a child through college? On the other hand, how many of the 3 hundred million of us are going to quit our jobs and have solar panels and grow our own food to eliminate personal spending?
We are dependent on the system we have, unfortunately. We are too scared to even take one day off – illness, family emergency, etc. – because of the economy. How many of them do you think are scared of changing the world? Or even a changing world?
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Fabius Maximus replies: I strongly agree. It is easy to see, as in this post: A picture of the post-WWII debt supercycle.
Understanding this is IMO essential if we are to have a future. Should we decide it’s someone else’s fault, that we are not responsible for our mistakes, than someone will eventually come along to take the burden of self-government off our shouders.
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If it were only true that it was a question of 538 versus 300 million, then this would’ve been over a long time ago.
Problem is (to quote Morpheus from the Matrix) is that even though we are trying to help these people, they are part of ‘the system’ and that ‘system’ could very well kill us if we step out of line. Heck, I wonder if even we aren’t partially subservient to the ‘system’ we’re trying to fight?
Just a thought. Maybe there are those in the system (beyond that 538) who, fearing a thinner wallet, fight against those who mean best? And heck, we’d best be sure that we truly mean best before asserting ourselves. We’d better live by the right laws (and I mean natural, eternal laws. Divine law if you will) before we truly commit ourselves to this. Best to do this right or not at all.
Oh I think we’ve spoken loud and clear with a message that we will not tolerate irresponsibility on the part of our leaders. An election that was predicted by the talking heads as a “dead heat” only days before the election, turned out to be a referendum on change.
If politicians didn’t take notes in the last election, they’re doomed to be out of work the next time their constituents go to the ballot boxes.
where do we meet and get started? i’m ready.
Do you have a link to the full report by Joan McCullough of East Shore Partners? Thanks.
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Fabius Maximus replies: I do not believe there is a public version online. This brief excerpt has circulated because of its general nature (no proprietary information), great writing, and powerful message.
The problem is a breakdown in the basis of civilization — contract enforcement.
Any market depends on property ownership and contract enforcement; even the most extreme ‘free market’ advocates accept the need for some contract enforcement mechanism that is essentially a gov’t-like use of force.
Going into bankruptcy court, or foreclosure, requires some actions of the gov’t.
The ‘sheep’ who bought over-priced houses (almost any US house after 2003/2004, up thru the 2006 crash) can, in too many cases, not fulfill their agreed to contracts. OK, they lose their house in foreclosure, they made bad bet, bad agreement. But the banks also lose the amount loaned in excess of the current value. The banks blew it. So the bank goes bankrupt? All of the ones who made such mistakes?
PQ = MV the basic macro monetary equation of Price * Quanty = Money * ‘Velocity’.
With all the big banks only now realizing they’ve been, not sheep, but lemmings — and they’ve jumped off the cliff. Already.
Velocity is going to 0 … so Price & Quantiy is going down … nobody is buying anything … everybody with a job is at risk of losing it.
Deflation.
The economy needs millions of parachutes so the lemming sheep land in a crash that is painful but not deadly.
What to do: HUGE quantities of cash (printed, not borrowed or taxed), to the taxpayers, in the form of low cost loans from the IRS (like 1% to start, on $10 000). So most of the lemmings avoid fatality, but yet when the economy bottoms out, the interest rate can increase and avoid the future hyperinflation which would otherwise come.
Then the lemmings at least pick the future winners, rather than the most politically powerful. Fight against politicians choosing the future winning companies.
Well, we will see about that. I still believe americans (north americans, because america spans alaska through patagonia as far as I know and according to this, brazilians are americans as well) are sheep, all the wars you’ve gotten into (you started) can’t prove otherwise… Besides you believe everything on the media, everything!