I stand amazed at how much open corruption is allowed in the economic sphere, the so called Capitalist system, of the USA. Watching the arrogant corporate hacks loot and pillage with abandon, is almost enough to make me a communist. Almost, but not quite. Capitalism is really a very good economic system, assuming there is accountability for malfeasance. Unfortunately, there is little accountability for personal behavior at all levels in the USA of 2003. Things might be different today, if we had held Clinton or Mr. Magoo accountable for their actions. We didn't. The result is we are reaping a whirlwind of corruption. When this fiat, debt and derivative based economic system of ours finally, mercifully implodes into the mother of all depressions, the real reason will be the moral failure of the populace to deal with corrupt leadership.

The latest, in a long string, of financial scandals now centers on the mutant economic beast called a GSE, or Government Sponsored Entity. It seems, after Enron and WorldCom, we are now blessed with a serious threat to the core economic illusion of our times. The illusion we can create unlimited funny money; unlimited amounts of debt and have no consequences is why the global economic system will eventually collapse. Where's the real money, should be our mantra as gold bugs. An audit of Fort Knox, to determine whether Lyndon Johnson looted the physical gold reserves, would be a good start. Don't hold your breath. Mr. Powell, of the Federal Communication Commission-even though he accepted tens of thousands of dollars for media junkets, has made sure the media corporate megablobs will become still bigger. Information is tightly controlled in the USA today. Even though the June 10, 2003 USA Today newspaper has two headlines in its Money Section of, "Reports Denounce Ebbers, board-portray mismanagement, lax oversight at WorldCom," and "Freddie Mac probe results in 3 execs' departures-President fired, CEO retires," expect no systemic change. Just another day of corruption in River City. There's Trouble in River City, but don't expect anything to be done.

Unfortunately for the powers that be, Freddie Mac is a real problem. Freddie Mac is a government chartered, private mortgage corporation that has hundreds of billions in "assets." One man's assets are another man's debt, but I'm being cynical. I don't see why restating your results for 2000, 2001 and 2002 would lead anyone to think there's a problem. Why should altering and removing pages from President David Glenn's journal of daily business activities, lead to his being fired? Shredding documents is as American as apple pie these days. Besides, the President of Freddie Mac, the CFO and CEO were given the heave ho, at thirty thousand feet with no parachute. Go back to sleep, the "system" has dealt with the problem. The "experts" assure us that any fallout will be "muted." Freddie Mac's new President finds the events, "appalling." Other experts tell us, "The average guy on the street will say, "So what." Another casually says there shouldn't be any disruption to smooth functioning of the mortgage market. No doubt, Mr. Magoo, and his smoking hot printing press, stand ready to save the day. The news of Freddie Mac sent "tremors through financial markets sensitive to scandal news," I don't see why. It's not like corporate corruption is much of a surprise in these days of Pax America.

What Freddie Mac does is buy mortgages from lenders and "package" them for sale to investors, which then creates more financing for loans. While the terms Ponzi Scheme, House of Cards and musical chairs come to mind, again, I'm just be a doomer. Surely, the government would never allow home owners to be put at risk, would they? Despite Freddie Mac's 16% stock loss, everything is fine, really, trust us. Freddie Mac has merely "misapplied accounting rules." It's not like they are corrupt or anything. I'm sure the horde of investigators will find the accounting rules chained in the basement somewhere awaiting rescue. I personally find the new guys assertion of, "this is not about transactions the firm didn't know about," not to be reassuring. I guess the idea a CEO should function as a human being is a quaint relic from an earlier time in America.

USA Today also cheerfully tells us, "Cash-strapped United seeking loans." It seems United Airlines hasn't gotten much relief from filing Chapter 11 last December. Another blurb admits, "Motorola lowers forecast, blames SARS." Another blurb highlights, "US companies react to SARS." The SARS tip of the iceberg in my opinion. Other news media sources tell us not to worry about the long lasting, record unemployment rates. They are high and getting higher. And that is the officially faked ones, not the real rate of double the official rate. Isn't it amazing what the Department of Labor can do with statistics these days? I'm impressed at their cooking skills.

In my own personal life, I can see the light at the end of the tunnel, although I'm not sure whether the light is a train headlight or the sun. As we head into the summer months, it is so reassuring to me to see our toothless government watchdogs in action. I find it thrilling to watch them fearlessly promoting Truth, Justice and the American Way. Never has the comment, Truth pays, but crime pays interest and stock dividends been more true in America. Sure the game is rigged, but the entertainment value is certainly something to be considered. I will continue monitoring our elite in action. I will bring you, my dear readers at www.gold-eagle.com, the blow by blow account of the ongoing destruction of the Constitutional American Republic. The point in the USA of 2003 isn't that a corrupt, monopolistic, oligarchy has been created. Nope, the point is to make sure you claw your way to the top of the manure pile. My opinion that those who piss on everybody on their way up, should be prepared to get defecated upon on the way down, is another one of those quaint ideas I hold. Like the ones on honor, character and integrity I persist in still believing in. For a nation that despises truth, surely cannot be astonished when lies are everywhere. People and nations get the kind of behavior they encourage. We are the living proof of that dictum. For a nation that has planted the seeds of folly, has no right to complain when a bumper crop is harvested.

A nation gets the kind of behavior it tolerates and encourages. If we wanted honest business people and politicians, we would throw in jail those who are not. Instead, we shrug it off and continue playing the game. The idea the game will one day end is beyond our comprehension. The foreigners are watching. The foreigners see our 44 trillion in government liabilities. They see our 500 billion dollar trade deficit. They see our 1.7 trillion dollars in personal credit card debt, our trillions in home mortgages, our weakening dollar, our Imperial arrogance and they make judgments. It is their judgment, not ours, which will decide the exact day the illusion called the United States economy will end. The day will come like a tidal wave on a beach full of sunbathing fools. The fundamentals of economic reality are not mocked forever. Consequences are coming.

13 June 2003