"Neither a wise man nor a brave man lies down on the tracks of history to wait for the train of the future to run over him"
Dwight D. Eisenhower

In my opinion, we have now officially passed the point where return to the "raw capitalist" functioning of our entire economic system was still feasible... I don't know what exact form will the next phase take yet, but the current system is officially over, finished, done, caput or whatever else you want to call it! The week of September 15th 2008 will not only go down as one of the most defining moments in the history of the United States, but my son will probably spend as much time reading about the consequences in the history books as I did about the Second World War...

Forget the small potatoes of "moral hazard" from Bear Sterns and Fannie/Freddie bailouts, or the "unofficial" existence of the "Bernanke/Greenspan" rate cut put option for the US stock market- the new "mother of all moral hazards" has been formed by the Paulson/Bernanke pair... Not only they changed the rules in the middle of the stock market game by de facto banning all short selling, but they also committed to put up an unprecedented $700B in taxpayer's (mine and yours) funds at risk just to prevent the "collapse" of "entire financial system"...

What a load of cr.p... I mean let's be real here - how did we come to a point where the mere fact of a relatively small by historical measures decline in equities of 20%+ is such a widespread cause of panic, anxiety and outright despair? Heh? Give me a break- stock markets might have had a down year, so, oh my gosh, let's ban all short selling?! Are you kidding? Really, what do you think will it lead to? More restrain by the greedy bankers? Or maybe it will help to identify the "true" prices of financial stocks? Yea, right... May be we should just do what Pakistanis did and put a clear floor on the S&P index? Let's make it a 1200- it's a nice and round number!...

So don't worry, the government is there to save us all! They'll print more money and force us and our children to pay for it... Last month, as a "rational" person I doubled my contribution rate to the retirement accounts because the time of "blood in the streets" is usually the best time to buy, but today I am seriously questioning whether I need a retirement account at all... By the time I retire several decades from now, the system as we know it, likely won't exist at all because it simply can't!

We simply cannot to continue bailing every "too big to fail" corporation, print more and more money and keep raising the national debt limit forever... At some point we will have to start paying down/reducing that debt and that could only be really achieved by two main means- higher inflation and/or higher taxes... And neither bodes well for my eventual retirement "nest egg"?! So while I certainly appreciate the "Paulson's" gift in the form of 8% two-day appreciation of my 401K I also know it can't and won't last... I don't yet know what the alternative is but I'll work on that in the nearest future, for now we need to simply figure out how to deal best with the cards as they have been dealt to us by the Paulson and Co...

Stay safe and cheers, Vad
skepticalcapitalist@gmail.com