NEW YEAR, SAME DOWNHILL TREND

As always, delicious negativity receives the lion's share of media attention and today is special because as the first day of trading of 2008, we crossed the mythical mark of $100/ Barrel and closed under 200 points confirming the health of our crippled economy is deteriorating rapidly.

Most Americans believe that they know the direct causes of the present housing collapse and the broader economy: low interest rates; lax mortgage lending; rampant speculation. While there maybe merit to this school of thought, the two major reasons are that Americans are wastrels, and prefer everything Big. Americans' devotion to homeownership as with everything else is not a secret; it explains why government officials, politicians and journalists overlooked abuses in "subprime" lending.

It explains why the banks were able to get away with the biggest scam in American History. At the height of the boom in, 2005, the homeownership rate had surpassed 70%, up from 64 percent in 1990. Great. A good cause shielded bad practices. The same complacency lulled ordinary Americans into paying ever-rising home prices. Something so embedded in the national psyche must be OK. This psyche, our Achilles heel, is what the foreign investors saw through their crystal balls and decided to capitalize on.

Everything in America is big; People want bigger cars, bigger roads, bigger homes, bigger loans, and bigger debts. The Chinese and Arabians were all too eager to finance our enormous appetite for everything big. We borrowed money to buy big trucks, SUVs, gas guzzlers and ever bigger homes that we did not need nor could afford. There is absolutely no reason on earth for a family of 4 to own a 5000 sq ft home with 5-6 bedrooms and 2-3 living rooms. Ordinarily these are luxuries exclusive reserved for the rich and famous, but the fraudulent banks somehow convinced the ordinary public that they could afford them and advanced them the loans to buy them. Similar, there is no way on earth a household with a combined income of $60,000/ year can qualify for a $400,000+ home. This is the biggest crime because these banks fraudulently played on our devotion to homeownership, our emotions, our psyche, our appetite for everything big. They threw tantalizing loans in our face and concocted the numbers to qualify us, then bundled the phony loans and offered them as mortgage backed securities on the broader market. These fraudulent lending practices are the biggest cause for the current recession; they have a cancerous effect which is malignantly affecting the broader economy. America is the worst hit of all the economies and its effects are reverberating globally with the other hard hit economies being those of Western Europe. On the contrary the Chinese economy is appreciating at the rate ours is depreciating. Corporate greed has fueled the collapse of our manufacturing sector, effectively wiping out our middle class. Our manufacturing capacity has dipped below the threshold of 50%, the transition mark by which our economy enters the reconstruction phase versus expansion. Once again the repercussions of outsourcing are overt and it is sad to see that some otherwise unfriendly nations such as china, having attracted most of our manufacturing jobs are thriving at our expense.

Surging economies in China and India fed by oil and gasoline have sent prices soaring over the past year, while tensions in oil producing nations like Nigeria and Iran have increasingly made investors nervous and invited speculators to drive prices even higher.

With oil having briefly touched the once unfathomable price of $100 a barrel, consumers can expect the cost of filling their gas tanks, heating their homes - in fact, the price of most everything - to also keep rising. Some analysts predict gas prices could rise as high as $3.50 to $4 a gallon next summer. And the Energy Information Administration predicts gas prices will set a new record national average above $3.40 a gallon this spring. This is all wishful thinking, and false predictions. The truth is that by this summer the cost of gas will have doubled and a gallon will sell at $6.00 to $7.00 the price the Europeans pay.

Given that ours is a speculators market, the Arabians find themselves in the unique and superior position of imposing their will on the global economies on account of their direct control of oil supply to the market. That we urgently need an alternative source of energy is an understatement and every tool in our kit should be put to use to identify a renewable and sustainable source of energy, freeing us from the bondage of our Arabian masters.

It’s up to the American consumer and investor to read through the lines and study the data for it is unequivocally clear that what we just like all other dynasties and empires have primed ourselves for a hostile takeover. The President is faced with a unique dilemma; if he tells the public the whole truth and nothing but the truth, whatever little hope that may exist to salvage this fledgling economy will evaporate instantaneously, alternatively, the Americans might band together like we always do in times of crisis and weather this storm together. Failure to act is not an option; delaying the action is courting disaster; managing the disaster is a mistake Americans don’t have to make.

Just like the terrorists used our planes to hit us on 9/11 the Chinese and Arabians are using our economy against us. If the golden rule applies, he who has the gold makes the rules; then foreigners will soon own a substantial chunk of the US. Of course this means war.

These foreigners are pseudo-government conglomerates masquerading as holding companies with the sole purpose of toppling our nation in a hostile takeover of our economy. We might as well kiss Israel goodbye!