Oh man, the economic situation is rapidly rushing towards some of the troubles we have been calling for in published writings for a number of years. The threat of further economic dislocation is very high at this time. On to the economic six-pack:

1. Ambrose Evans-Pritchard, the international business editor of the Daily Telegraph, is joining us in calling the present economic situation as one of “maximum danger”. Evans-Pritchard excellently pins the root of the current crisis on the inflationary credit policies spurred by global central bankers over the past decades. With bank failures potentially lurking in waves due to massive rotted asset write downs due to over-saturation of debt society-wide, the potential for a system-level dislocation is rising by the week. Greenspan and Bernanke overseeing de facto 3% bank reserve requirements for years (along with other foolish interventions and props) provide the root of the systemic risk we are now facing.

2. As years of government mismanagement and bubble-blowing, along with cartelized fractional-reserve banking, John Loeffler sees the United States in a spiral towards a popular rebuke of unjust law. With government corruption appearing to be at an all-time high, and policy-makers seeking “solution” after “solution” at the expense of American taxpayers, Loeffler rightfully wonders whether this is the road towards socialism. Quoting Bastiat only adds to the effectiveness of the analysis.

3. Mike Whitney has been a constant voice of sanity and awareness in the process towards government-and-greed-induced financial collapse. His latest piece takes on the “blank check” Treasury and Fed officials are pining for in the Fannie Mae and Freddie Mac bail out plan. Facing a crash of these ridiculous mortgage behemoths, these advisers are now hoping to link the American taxpayer directly to the liabilities of the failing institutions. For the sake of prudent, hard working, honest American taxpayers (not to mention the current incarnation of the US Dollar as the Federal Reserve Note) this “blank check” should be soundly rejected.

4. As credit is currently being vacuumed out of the system, those who benefited most from the previous credit bubble (i.e. home builders) are witnessing what takes place on the downside of an unnatural credit explosion: the Bust. Accordingly, home builder confidence has fallen to a record low in July 2008. With numerous development projects coming online from years of overbuilding, there is little reason to believe conditions will improve in the foreseeable future. The system will have to shake out before a meaningful rebound can occur.

5. Seeing how so much common taxpayer wealth has been squandered and will likely continue to be squandered in the near future, it is likely a good time to revisit your property tax bill if you believe you are being assessed at too high a value. The WSJ provides some basic insight into the process for your potential benefit.

6. Finally, with such economic trouble staring at the American people, and the populace becoming rightfully upset at the inanity and corruption of their “elected” leaders, there continues to exist an environment where the U.S. executive branch may attack Iran. This article by Justin Raimondo criticizes some fairly terrifying logic coming from certain Israeli mouthpieces that essentially goes as such: the U.S. needs to attack Iran’s potential nuclear capabilities now in order to avert a later potential nuclear attack by Israel on Iran. Blackmail via the “we’ll go REAL nuts later, so to avert that, you go somewhat less nuts now” tactic. Pretty evil, disgusting and sad. Considering that George W. Bush ridiculously sees war as good for the economy, and potentially desiring a distraction from economic spiraling, hopefully the wayward Neo-cons do not act out in such a manner.

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Hopefully we survive this mess. It will take courage, principle, wisdom and preparation. Be sure to tune into Ponder This… for occasional bouts of sensibility and prescience.

Filed under: Politics, Social Mood, Economics, Six Packs, Current Events