In 1927 famous economist John Maynard Keynes stated: 'We will not have any more crashes in our time.' As Bugs Bunny would say, 'What a moron!'

On September 5, 1929 Irving Fisher, a leading U.S. economist, stated in the New York Times: 'There may be a recession in stock prices, but not anything in the nature of a crash.'

The market crashed one month later, in October of 1929.

Shortly thereafter Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, stated: 'This crash is not going to have much effect on business.'

In February, 1930 Secretary of the Treasury Andrew Mellon stated: 'There is nothing in the situation to be disturbed about.'

What followed was a grinding decade of depression and poverty, with millions rendered destitute.

Fast forward 50 years. The period from the 1980s through 2007 saw the greatest orgy of consumer, corporate and government debt creation in recorded history. Nobody saved, everybody borrowed and spent. McMansions, SUV's and surround sound TVs were the order of the day. Everybody had money in mutual funds. The average family had several credit cards carrying an average total of $9,000 in revolving credit. CEOs had golden parachutes. Everyone bet the farm. Now the pigs are getting slaughtered and the chickens are coming home to roost.

As Texas member of the U.S. House of Representatives, Ron Paul, says on the following short video, not only will the bailout not work, it will delay the inevitable crash and make it far worse when it finally does happen. Dr. Paul reminds us that only a return to constitutional money (among numerous other corrections) would result in short term pain, while the present course may deliver a decade's worth of pain.

????

In 1933 President Franklin Roosevelt closed all of the nations banks, en masse, for a brief period, then issued Executive Order 6102 Forbidding the Hoarding of Gold Coin, Gold Bullion and Gold Certificates. HIs friends had been given several months' advance notice and had already moved their gold outside of the United States. When FDR fixed the price of gold at $35 per ounce, he enriched those friends considerably.

Here a writer calls the modern bailout the 'Financial Equivalent Of The USA PATRIOT ACT'
http://www.iht.com/articles/2008/09/23/business/sorkin.php?pass=true

"The passage is stunning: 'Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency'... with those words, the Treasury secretary - whoever that may be in a few months - would be vested with perhaps the most incredible powers ever bestowed on one person over the economic and financial life of the United States. It is the financial equivalent of the Patriot Act, after 9/11. Treasury Secretary Henry Paulson Jr.'s $700 billion proposal to bail out Wall Street is both the biggest rescue and the most amazing power grab in the history of the American economy."

And the present Wall Street rescue package isn't all the pork being served in the Capitol Hill cafeteria. In a late-session burst of activity that flew under the radar, Congress just quietly passed a $600 billion bill to fund the 2009 budgets for the Pentagon, Homeland Security Department and the Department of Veterans Affairs, plus provide aid for flood and hurricane victims and $25 billion in loans for Detroit automakers.

It's all over and, yes, the corpulent diva has already sung. In 'Mushroom Cloud Over Wall Street' we read: "These are dark times. While you were sleeping the cockroaches were busy about their work, rummaging through the U.S. Constitution, and putting the finishing touches on a scheme to assert absolute power over the nation's financial markets and the country's economic future... Economist and author Henry Liu summarized the current maneuvering like this: 'The Fed is merely trying to inject money to keep prices not supported by fundamentals from falling. It is a prescription for hyperinflation'... This is just the latest installment of the Shock Doctrine; engineer a crisis, and then, steal whatever is left behind."

Read the full article at http://www.informationclearinghouse.info/article20839.htm

For several years now I've been writing that the wheels would soon come off the economy. And so they have. Like a beach goer who just spotted an oncoming tsunami, you can stand there frozen in denial, or you can jump up on top with your surfboard, ride that sucker all the way in and make a fortune. If you know how to surf the market, that is.

You can rant and rave over the crooks, the corruption, the new world order Illuminati taking over the planet, whatever. The bottom line is, the bovine effluvium has hit the rotary airfoil and you're on your own. Not only is Congress not going to help you, they're shifting billions of bailout dollars onto your back with far higher taxes all but inevitable (look for a national sales tax.)

As for Social Security, what will $1,000 a month buy when the Federal Reserve Note is worth next to nothing? As for Congress, they voted themselves out of Social Security long ago. They've got a *guaranteed* 'old age' pension plan: You.

If you've every thought about dabbling in the 'underground economy' this might be a good time to start practicing. Ha, ha. We hear that a 'fried dough and cold soda' cart at a popular beach can bring in over $1,000 a day in untraceable cash. Until RFID chips are implanted in our currency, that is. They're already being tested in the euro.

If you've considered selling your house (if you can find a buyer), moving in with other family members (if you can all fit), ditching that second car or otherwise downsizing your cost of living, now is the time to 'get your rear into gear.' In other words, before you have to.

Will there be opportunities to make money trading and investing during "The Greater Depression"? Sure, there always are. Trade the market all the way down, for one thing.

As of tonight we're up 80.01% in "ETF WaVe Trader' since June 11, 2008. But most folks don't know how to do this. They'll stick with their financial planner to the bitter end. Hey, maybe *they* can move in together!

Following the Great Crash of 1929 it took the Dow Jones Industrial Average 25 years -- until 1954 -- to exceed its October 1929 high. How long will it be before we see a Dow of 14,000 again? I don't know. But I do know that a trip down to 7,000 is probably the next stop on the Wall Street elevator, and that it will probably a be long time before the car heads back up to the roof.

That's assuming the safety cable doesn't snap first, of course.

And May The Pip Be With You,

Gordon Philips for
THE INSTITUTE OF HIGHER EARNING
gordon@higherearning.com

.· ´¨¨)) -:¦:-¸.·´ .·´¨¨))
((¸¸.·´ ..·´ When you wish -:¦:- -:¦:-
-:¦:- ((¸¸.·´* upon a pip... -:¦:- -:¦:-



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