The Herriage Manifesto Explained

This is an email I received from a colleague of mine, Kip Herriage. His position on today's economy is unparalleled.



Bernanke Drops The Ball, But AIG’s Rescue Gets Done

Sugarland, TX – September 18, 2008– Yesterday I wrote that the “FED must drop rates and that AIG must be bailed out”. Tonight we have word that the AIG bailout has happened, and that 80% of the company will now be owned by us…the US taxpayer. Congratulations everyone….we now owe over $1 trillion in additional unfunded liabilities.

"The Board determined that, in current circumstances, a disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth and materially weaker economic performance," the NY Federal Reserve said.

Look, here’s the bottom line on all of this. The delirious “geniuses” that dreamed up these ridiculous instruments called “derivatives” over the last 10 years are to blame for the current mess we are in. If any of us were responsible for this monstrosity of a creation, we would be tarred, feathered and hanged for the whole world to see. I honestly don’t know if the worst is behind us, because I have lost complete confidence in a government that would allow this to happen in the first place. It’s almost as if they want it to happen….“it” being a repeat of the catastrophic events of the 1930’s Great Depression.

The truth is that I am an eternal optimist, and that I believe in the great spirit of ingenuity that lies in each of us. Unfortunately, “we” are not running things right now, and the idiots that are don’t seem to know how to right the ship that we are all sinking in.

So, what would I do if I ran the Federal Reserve??

I would institute the “Herriage Manifesto”: a FIVE STEP PLAN to completely clean up our markets in less than 30 DAYS:

One: I would open the books of the FED so that for the first time EVER, our private bankers accounting shenanigans could be audited and uncovered. The FED is as Federal as Federal Express…which means that it’s not federal at all. It’s a private cabal that lines the pockets of the worlds “ultra elite” through massive criminal activity and should ultimately be abolished… and the crooks that profit from our misery should be thrown in jail for life!

Two: I would place the US dollar back on a limited version of the gold standard immediately, and reverse the amazingly poor decision made in 1973, when Nixon removed all of gold’s backing from our currency. Then, over a 50 year period I would mandate that 25% of all money in circulation must be backed directly by gold. This move would reduce interest rates by 50% overnight, increase lending to consumers by 300%, and would have real estate prices appreciating across the board NOW…and for decades to come.

Three: I would eliminate “naked short selling” and make these crooks immediately cover their short positions so that Wall Street thieves couldn’t drive otherwise healthy companies into total and complete bankruptcy. This criminal short selling would be eliminated in less than an hour and we would see share prices rise by 10% in a single day…. and over 25% in 30 days. The fact that this has not already been done tells us that the foxes are guarding the hen house!

Four: I would make it a crime (criminal not civil) to issue derivatives that do not directly add to the well being and health of a particular industry or commodity. Derivatives make a lot of sense for a farmer that is hedging against a bad crop season, but they make no sense when used by financial institutions that are using them to increase their returns by 2% per year, while placing the entire financial system as we know it at risk.

Five: I would remove all barriers to trade, and open the markets entirely so that a true ‘free enterprise” system could develop once and for all. Protectionism is the enemy of the entrepreneur, and once removed allows prices to move based purely on supply and demand. This allows businesses to make decisions based in what really works, pure and simple, instead of some government mumbo-jumbo about “protecting us” from international competition.

Where we go from here will be interesting to watch. This has the feel of a total selling climax, which gives us the massive negativity that we need to finally reach a contrarian bottom. The next few days will tell us if this is the case, so stay tuned.

Good luck to all as we work our way out of this mess caused by our idiot decision makers in the government, and by the criminals at the FED.