The Joyride That Was The American Empire

A few days ago a friend called me just after hearing Michael Panzner on the Thom Hartmann show on Air America. My friend wanted me to read Panzer's book, Financial Armageddon and see what I thought. Apparently, Panzer's radio interview remarks were filled with passion and a sense of urgency, and upon reading the book, I experienced the same intensity in the author's writing which pleasantly surprised me. Here was a financial guru with 25 years' experience in the stock, bond, and currency markets and a faculty member of the New York Institute of Finance, who unlike Ben Bernanke and the silver-lining pundits of the financial pages, was not telling us that everything is going to be fine or that things will "bounce back in 2010".

Anyone familiar with my writings knows that I have never claimed to be a fiduciary wizard, but in recent years I have written more on topics related to economics than at any time in my life. I do not believe that all social issues can be resolved if only we change how money works in the United States or the world, but I am profoundly aware of the role of economic issues-perhaps more than militarism, healthcare, education, politics, or any other institution, in the dead-ahead demise of empire. I also notice that few in the left-liberal end of the political spectrum have a firm grasp on economic issues which I suspect comes from a fundamental polarization between activism and financial intelligence-a reality which motivated me a few years ago to write an article entitled "Activists And Accountants: Absolute Allies."

Michael Panzner is definitely not from the left end of the political spectrum, which makes the contents of Financial Armageddon all the more fascinating and momentous. I came away from the book with both remarkable reinforcement of my position that the United States has entered economic collapse, but also perplexed regarding the myriad blind spots that the author seemed to have regarding the causes of the current economic meltdown. I am not aware of how Panzner may have altered his views since the publication of his book earlier this year, but at the time of writing, Panzner did not mention or was not aware of a number of glaring realities regarding the gluttonous greed-fest that has characterized the United States since the end of World War II. I will address those inconsistencies first, then highlight the places where I think Financial Armageddon is absolutely on-target.

What is most disturbing to me about the book is what appears to be a total lack of perception regarding the role of fraud, theft, and malicious intent in the American and global financial train wreck which has been exacerbating over recent decades. Panzner seems to conclude that all of this is just one huge accident attributable to incompetence or the American consumer being lulled by creature comforts. The book begins with a chapter on debt-personal and governmental-a factor so pivotal in economic catastrophe, but little attention is given to the intentional engineering, for example, of consumer debt by centralized financial systems and how monstrously profitable it is.

In the recent documentary "Maxed Out", Harvard law professor and author of several books on consumer debt, Elizabeth Warren, states that the middle class is near extinction not only because of a lack of financial information, but specifically because debt is, in her words, "obscenely profitable" for lenders. Panzner says little about this in the book, but he does say that "Ever-growing investment returns, an endless housing boom, and the Federal Reserve had conditioned Americans to believe that, inevitable good fortune would eventually bail them out-should it even prove necessary." (4) The current debt nightmare, however, is not merely about "conditioning" but is, in my opinion, based on hard evidence, calculated and contrived. Both "Maxed Out" and "In Debt We Trust" make this exceedingly clear. Furthermore, in examining the history of the financial train wreck now in the making, one must grasp the history of America's aristocracy, not only in the days of the Robber Barons, but within the past thirty years. Catherine Austin Fitts' website subtitled, "The Aristocracy Of Stock Profits" provides an excellent historical account of this.

Nowhere in the book does Panzner mention the $1.3 trillion missing from the Pentagon or the $59 billion missing from the Department Of Housing And Urban Development and a plethora of other instances where money is "missing" as documented, again, by Catherine Austin Fitts. Nowhere does he address the issue of fraudulent inducement, also noted by Fitts in her audio CD on the housing bubble, which simply means, enticing people to borrow when it is obvious that it will be impossible or near impossible for them to repay.

It is crucial to understand that the current economic meltdown is a transfer of wealth from the middle and lower classes to the ruling elite. Wealth transfers do not just happen, nor are they the products of incompetency. They are intentional and well-planned. Central to wealth transfer is corruption at the highest levels of the economic and political systems. In hindsight, we look back upon the Savings and Loan debacle of the 1980s, at that time, the largest theft in the history of the world, yet today, our minds cannot begin to wrap around the wealth that has been stolen from the American people, making the S&L scam look like piggy bank pilfering--and to my knowledge, Catherine Austin Fitts at her Solari and Dunwalke sites, is the only person to have documented this so impeccably.

In fact, I recently received an email notice from Fitts stating:

Recently, we have seen numerous press accounts of bank and hedge fund losses from sub-prime mortgages. Remarkably, these reports imply that the losses are the result of a market downturn or contracting credit cycle. But there has been no mention of the extraordinary profits that were generated or who reaped them. There is no mention of who is poised to make a fortune on the bubble collapse. Even the most sophisticated commentators of our day are describing this financial coup d'etat as the unintentional consequence of "market forces."

Coup d' etat? How's that for blowing the "incompetency theory" out of the water? Panzner alludes to corruption in his book but overall tends to place it in the future. Locating it in the context of a chaotic society during and after collapse, he says that "Corruption will likely become endemic...", but, I protest, corruption is now and has been and is the principal reason for our financial predicament. In fact, in the opening of the chapter "The Retirement System", he states that it is the leaders of the public and private sectors who put off an accurate assessment of what the future held, "even though they knew a day of reckoning would come." (15) Yes, they knew a day of reckoning would come, and their intention was to feed as voraciously as they could off their current situations and be long gone before the reckoning. Just as the culprits of the Savings and Loan caper profited on the way up, they also profited on the way down, as will a few predators in the current subprime catastrophe.

In fact, an article this week in Forbes Magazine, "Profiting From The Meltdown" opens with: "A consortium of the nation's leading investment banks have quietly created an index that is not only protecting them against the recent market meltdown but also promising to make them bundles of money in the process."

Panzner does not mention the role of the Federal Reserve in engineering Financial Armageddon and the fact that it is neither "federal" nor has any kind of reserve. No expose of the Fed's money policy, fractional reserve banking, or printing money out of thin air backed by nothing is offered. Nor does he illumine the reader about the Fed's ultimate ulterior game plan. It appears that he is unaware of the global ruling elite, sometimes are referred to as the New World Order, who have engineered Financial Armageddon and will be safely ensconsed in their solar-powered bunkers, calculating their profits while surrounded with an abundance of food, water, and private security forces when all hell breaks loose.

One cannot adequately comprehend the perfect economic storm that is brewing worldwide without understanding the role of the Fed as one of the pivotal entities necessary for the construction of what financial analyst, Bill Bonner, calls the "Empire of Debt". Curiously, Panzner does not address the reality of empire nor its historical ascension to global economic superintendent a la the Federal Reserve.

Mike Whitney states in his most recent article "Stock Market Meltdown" that:

Economic policy is not ‘accidental.' The Fed's policies were designed to create a crisis, and that crisis was intended to coincide with the activation of a nationwide police state.... The Federal Reserve is a central player in a carefully considered plan to shift the nation's wealth from one class to another. And they have succeeded. Nearly 4 million American jobs have been sent overseas, the country has increased the national debt by $3 trillion dollars, and foreign investors own $4.5 trillion in US dollar-backed assets. While the Fed has been carrying out its economic strategy; the Bush administration has deployed the military around the world to conduct a global resource war. These are two wheels on the same axel. The goal is to maintain control of the global economic system by seizing the remaining energy resources in Eurasia and the Middle East and by integrating potential rivals into the American-led economic model under the direction of the Central Bank. All of the leading candidates-Democrat and Republican---belong to secretive organizations which ascribe to the same basic principles of global rule (new world order) and permanent US hegemony. There's no quantifiable difference between any of them.

Whitney, of course, is talking about organizations like the Council on Foreign Relations, the Trilateral Commission, and the Bilderberg Group. It is within these entities that the ruling elite have been planted and cultivated.

Additionally, Financial Armageddon does not mention energy depletion or climate change as precipitous factors converging with global economic meltdown, exacerbating it and creating what I have frequently referred to as the Terminal Triangle as we "cook on the road to collapse". These are factors that will only intensify the grim post-collapse world that Panzner does acknowledge later in the book. However, to fail to mention the current and future juxtaposition of these three for the first time in human history is a glaring omission.

To his credit, however, Panzner does steer his writing into future scenarios which sound remarkably like those posited by Dmitry Orlov in his series on collapse entitled "Post-Soviet Lessons For A Post-American Century". Echoing James Howard Kunstler's adage that "suburbs are the slums of the future", he states that "In the wake of the early 21st-century housing boom, the migratory landing points may well be the millions of condominiums and boarded-up new homes left empty or mired in foreclosure in what were once the hottest real estate markets." (107) Reminiscent of Orlov he writes:

Meanwhile, newfound transparency in the wake of the unfolding financial crisis will expose a scale of fraud, corruption, and self-dealing that many will find almost impossible to comprehend. Day in and day out, reports will surface about hidden losses, false accounting, inflated appraisals, sizable off-balance-sheet obligations, valuation discrepancies, unregulated offshore entities, phantom, profits, insider trading, and businesses bled dry to enrich a few individuals at the expense of employees, investors, bankers, and bondholders.(116)

Sorry to say, but all of this sound a whole lot like the current moment, and certainly everything enumerated here will only worsen, and Panzner admits as much in the final chapters as he presents a world of chaos, lawlessness, hunger, thirst, homelessness, inveterate wandering, and people with nothing to lose doing whatever it takes, in order to survive.

I was getting worried early-on in the book that the author would not mention martial law and "vast detention camps", but he does when explaining the extent of lawlessness, troublemakers, and immigrants "who will increasingly be seen as an unacceptable threat to national security." (127) Additionally, "Americans will be confronted by an unfamiliar and frightening array of legal, financial, and security restrictions, including lockdowns, curfews, internments, capital and exchange controls, and even [oh yes especially] martial law." (185) It will be a world where the dark and seamy side of life are apt to be predominant with addictions, vices, and suicide prevailing everywhere. There will be much thievery, scamming, and violent crime and as Panzner says, "People who underestimate the severity of the dangers ahead and fail to take the necessary steps at the outset risk being left penniless." (142)

When all is said and done, Financial Armageddon offers some sound advice and strategies, which some readers may be aware of, for navigating the crumbling empire . The author insists that having access to information, especially alternative news, will be crucial. Not knowing or predicting how long the internet will exist or remain uncontrolled, he strongly recommends that people familiarize themselves now with alternative news sites and continue to do so as long as they can. In addition, he emphasizes hyperinflation and the risks it will entail in terms of using cash. Precious metals will be a strong hedge, and barter will become a basic, commonplace form of exchange. Practical knowledge of fundamental skills, healing with herbs and other alternative remedies, and personal disaster planning will be essential-as will be the ability to navigate a rotting infrastructure which, and I'm sure Panzner would concur, that in August, 2007, we are just beginning to witness the tragic consequences of.

Panzer also adds the spiritual factor in the equation:

Coping when many people are trapped beneath the rubble of an irresponsible or impetuous past will call for considerable courage, stamina, and resolve, which must come from within. Constant turmoil and heightened uncertainty about the future will require ‘what if?' thinking and the ability to anticipate situations that used to be rare or non-existent. (143-144)

In addition, Panzner states unequivocally that:

For most Americans, the period ahead will be a time to scrimp and scrape and shy away from a natural sense of optimism that says tomorrow will be better than today. Instead of looking for handouts and loans, people will increasingly have to draw upon their own creative inner spirit to satisfy whatever needs they might have and uncover alternatives to spending money, without necessarily expending a great deal of valuable time and energy in the process. (179)

Gee, do I hear Panzner saying what I have been saying for years-- that we must "kill hope an enliven options"? Yes, indeed I do, and I also hear in his chapter on Relationships, that brains, wit, physical fitness, and the best laid plans of mice and men without human connection and skills that enable people to sustain it, will come to nought.

I look forward to Panzner's next book and trust that it will hit harder than Financial Armageddon. Nevertheless, I enthusiastically recommend this book as well as the Financial Armageddon website.

In summary, the joyride is over, and if you are reading these words, you are probably one of the few people in America or in the world who really understands what that means.

Carolyn Baker is an adjunct professor of history living in Southern New Mexico. She can be contacted at cbaker@nmsu.edu

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