Great Depression Online Archive Issue:

Wooden Arrows, Rum, and Wool

Great Depression Online
Long Beach, CA
October 03, 2008

Inside This Issue You Will Discover…

*** Wooden Arrows, Rum, and Wool
*** $700 Billion Price Tag Not Enough
*** Words of Aesop
*** And More

Wooden Arrows, Rum, and Wool

Congress has been extraordinarily busy this week working over and disfiguring the government bailout of Wall Street.  Yes, it’s a sad fact, in today’s democracy, the representatives that dole out the most goodies, to the most people, win re-election.

Here are just three highlights of what we mean…

-- Exemption from excise tax for certain wooden arrows designed for use by children.

-- Increase in limit on cover over of rum excise tax to Puerto Rico and the Virgin Islands.

-- Extension and modification of duty suspension on wool products; wool research fund; wool duty refunds.

-- And much, much more…over 450 pages of lard.

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~~~~~~~~~~~~~~~~~~~~~~~~~

Yes, the bill also includes the bailout bucks: $250 billion to Treasury Secretary Paulson up front…$350 billion with approval from Congress and the President…and, with additional approval from Congress and the President, Paulson can have up to $700 billion “outstanding at any one time.”

It has already passed Senate…the big suspense today, will it pass the House?

$700 Billion Price Tag Not Enough

Even if it does pass, will the colossal bailout work?

Of course not.

The assets the banks hold on their books are falling in value.  The equity they once had has long since vanished.  Attempting to artificially prop back up the value of these mortgage backed securities with $700 billion is like trying to put out a Malibu Canyon wildfire using a garden hose.

In fact, yesterday, Warren Buffett “…said the price tag of the rescue plan may have to rise,” as reported Chris Isidore for CNNMoney.com.

Based on the rescue plan’s weasel clause that allows Congress and the President to authorize Paulson $700 billion “outstanding at any one time,” we get the feeling that the $700 billion advertised will just be the first installment.

Words of Aesop

We’re exhausted, so we’ll leave you with some words that date back to the sixth century BC to the land of Aesop…

Words of wisdom that’ll save you a fortune…if you’re willing to heed their suggested caution.

Enjoy!

The Sick Lion, Aesop Fables

A Lion, unable from old age and infirmities to provide himself with food by force, resolved to do so by artifice.  He returned to his den, and lying down there, pretended to be sick, taking care that his sickness could be publicly known.  The beasts expressed their sorrow, and came one by one to his den, where the Lion devoured them.  After many beasts had thus disappeared, the Fox discovered the trick and presenting himself to the Lion, stood on the outside of the cave, at a respectful distance, and asked him how he was.  “I am middling,” replied the Lion, “but why do you stand without?  Pray enter within to talk with me.”  “No, thank you,” said the Fox.  “I noticed that there are many prints of feet entering your cave, but I see no trace of any returning.”

He is wise who is warned by the misfortunes of others.

Sincerely,

M.N. Gordon
Great Depression Online

P.S.  Our friend Bob Prechter over at Elliot Wave International has released a must have issue of his Elliot Wave Theorist free.  Many of our readers have already claimed their copy.  If you want the truth about what’s unfolding right now in the U.S. financial markets, in Congress and at your very own bank, get your hands on a copy – posthaste.  Plus it’s free.  Learn all about this special offer here: Free Report - Elliot Wave Theorist.

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