THE JOYRIDE THAT WAS THE AMERICAN EMPIRE, A Book Review, By Carolyn Baker

Sooner or later, everyone sits down to a banquet of consequences. --Robert Louis Stevenson--

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.

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.

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