China has declared war on America; well on America’s “brand” of Capitalism, anyway. They have declared a novation, a cancellation, on all of their derivative debt and will no longer be paying any of the trillions of dollars on them when they become due. In other words they have declared a financial war upon America; they basically are saying that our dollars are worthless pieces of paper. This is tantamount to saying that the United States Federal Reserve is nothing but a sham and that if the Wall street bankers that own the Fed are ever forced to put all their derivative garbage on the books, that when they do that, they will be exposed as totally bankrupt. China holds an enormous amount of our debt and if the rest of the world agrees with them then we are in for a depression, with a capital D.

Alan Greenspan was the primary culprit who helped sponsor a bill during the end of the Clinton administration that set the stage for the housing bubble when this bill allowed Wall Street to “legally” hedge bets at a penny on the dollar, which allowed them to create derivative contracts whose supposed face value runs into the mega-trillions of dollars. I wonder what Greenspan has to say now?

I wish I knew the ending to this but it is an ongoing “world soap opera” that affects us all. Today Ben Bernarke said that the recession is over but, again added, that unemployment will continue. What was that again Ben? I guess this is what seven years of higher education gets you.

Ah well, may our neighbors respect us, trouble neglect us, the angels protect us and heaven accept us.