HOW THEY STEAL OUR WEALTH

Will You Survive The Coming Financial Crash 16
© 2005 Kent Daniel Bentkowski
On May 5, 2005, the stocks of both GM and FORD
were downgraded to junk status,
because both companies hold a combined $453 billion in debts they cannot pay. If GM
goes under, the size of the bankruptcy will be fifteen times that of the WorldCom
bankruptcy, which was the previous biggest bankruptcy in U.S. corporate history, and a
company in this type of situation is referred to as a fallen angel. GM is currently in talks
with Toyota concerning a possible merger, as the heads of both companies had met in
Tokyo during the May 7-8, 2005 weekend. Newswire reports of Monday, May 9, 2005
spoke of a planned cooperation between GM and Toyota.
With a half-trillion dollars of debt that has just been downgraded to junk status, the U.S.
auto industry is in critical condition, and the patient has begun to bleed out. If one or both
of these companies cease to exist, the United States will cease to be an industrial world
superpower. Losing the U.S. auto industry in this way will seriously jeopardize our
national manufacturing ability, which just since 1975, has already been decimated. On
May 10, 2005, Standard and Poor's announced that F
ORD
had been itself downgraded to
junk status, which has had a deleterious effect on the entire bond market, with
approximately 25% of the entire bond market now regarded as junk investments. Dear
reader, this is not good. GM itself has not been able to issue any bonds since the third
quarter of 2004, which itself does not encourage confidence in their ability to survive this
growing crisis.
I suggest that the reader keep their eyes on both GM and F
ORD
in the months ahead, and
upon this situation in general. This situation may show the rate of speed at which the
larger economy may follow both GM and F
ORD
's lead. The pension funds of both these
companies will then cease to be able to pay the retirement benefits of people who already
spent their entire working lives at one of these two companies! The situation is critical,
and the vultures of Wall Street have already been circling GM, with Kirk Kerkorkian
himself buying an even larger stake in the company. The combination of the dire
circumstances I describe here tell me that the game is afoot, and as the auto industry is
one of the most important sectors of the entire economy, all smart readers will keep a
watchful eye on this situation.
CONSUMER CREDIT AND DEBT :
The environment that created a 46-year low in interest rates in this country was also
responsible for the easy credit trap, in which tens of millions of people came to be
ensnared. Since the summer of 1993, it has been a gold rush of sorts for the banks and
lending institutions. This easy credit free-for-all has created the largest debt-bubble in
world history! The typical debt carried by the average middle-class family in America
today is between $10,000-$13,000 in credit card debt and a minimum of ten times that
amount on their home mortgage.
Ask yourself this --- if the bank recalled all your outstanding debt within the next ninety
days --- would you be able to keep your home? This is an important question, because
when the collapse of the U.S. dollar occurs, the banks may need to recall all outstanding
loans just to stay solvent themselves! Those who have been able to live within their
means will survive, but those who have jacked-up their outstanding debt will more than
likely lose their homes, which for the overwhelming majority of us, is our largest asset.