It's Happening: Fannie, Freddie, & The Fed

The warning signs have been like booming sirens for over a year. For those that have the luxury of understanding Austrian Business Cycle Theory, those sirens have been building into a crescendo for over 6 years.

Lew Rockwell offers a lucid account of Sunday's tragic news that the taxpayer--and world at large--will be bailing out the mercantilist lending giants Fannie Mae and Freddie Mac. Another occasion of government intervention begetting intervention, begetting tyranny. Those two government-chartered companies own or guarantee $5 trillion of debt, close to half the value of all U.S. mortgages. Banks in Asian and elsewhere hold around $979 billion of the bonds and mortgage-backed bonds sold by the agencies.

This, along with the failure of IndyMac Bancorp Inc. of California last week--the 2nd largest bank failure in U.S. history--should be more than enough evidence that the United States has slid into the first substantial economic depression of the 21st Century.

It is getting late to start battening down the hatches. Of course, the Fed, Congress, and the clowns at Freddie and Fannie don't want you to look behind the curtain. All but the most dense are sold on their palliatives.