“THE BANKING SYSTEM IS HEALTHY” so said Ben Bernanke, the Federal Reserve Chairman, on October 15, only a year ago. At that time, only a few of our prestigious financial institutions had fallen.

Just prior to the collapses, in Washington DC, the G-7 scolded the U.S. to get its financial house in order. The U.S.’s response was one of overbearing pride, acting in a superior manner toward its inferiors.

The greatest game of chicken was in play, and the U.S. wouldn’t flinch.

That didn’t matter because to the little people who work and save or gamble in the market - all is an illusion. It is not a matter of perceived reality; it is a matter of actuality.

The media and leaders of the American people are presenting a falsified scenario to those who received the bill for the bailout. Only if you look closely can you see what happened.

Our nation’s financial picture is so stark that to see it for what it is, is to gaze upon a surreal scene that we cannot believe is true. They’ve just handed us the bill after a long drunken party and the band is packing up to go.

The reality is that the little people will now live a life of national servitude to other nations and corporations. The party is over. It’s time to pay the piper. It is disheartening, but this mighty nation is in hock. Not only are the people in debt, but so are the big financial institutions that supposedly are worth billions of dollars but can’t make payroll.

Yes, many little people owe the banks, but the banks and financial houses owe other institutions, entities and nations while the U.S. owes the world.

As the sheet is pulled back and we view the corpse of a once vibrant economy with prosperity and opportunity for all, we see a toe-tag with special instructions. It says, “Wake this little guy up and send him to work in the salt mines. He now has a corporate and national debt to pay.”

Very few recognize what just happened in the halls of congress before their very eyes. You and I were sold into slavery for the failure and debts of our financial houses.

When such institutions fail, elected officials have choices. Let them fail, passing the losses to the shareholders and risk takers, or bail them out and pass the losses to the citizenry.

A bail out has more than one meaning. If you are in jail, to be “bailed out” probably means that you did a bad thing and will stand before a judge someday soon. So if we bailed out the financial institutions, when will they be judged? Or, did we just hand them a “get out of jail” ticket at our expense.

What? . . . No trial? . . . No punishment?

Remember that the little people like you and I only owe the banks, while the banks and financial houses owe other institutions, entities and nations everywhere. That doesn’t mean you and I should be made responsible for the obligations of financial institutions. That was their mess, not ours.

The fruits of the labor of the American people will now be extracted in careful measure to satisfy the actions of financial institutions that were unrestrained by convention or morality. Uncle Sam with his mighty inflation machine along with the help of the IRS will see to it.

As things get a harder, and dollars don’t go as far, do not despair. Really, your dollars are going farther. Your wealth and labor are on their way to New York and nations like China and other creditor nations.

Even if you do not have a mortgage or credit card, you are now paying down debts; the debts of smart financial wizards who miscalculated in the first place, but were smart enough to hand you the bill, via our elected congress.

Do we need term limits? No! Stupid people should only be allowed to vote twice. Enjoy your shackles.

Simple but true. Gold, oil, food, wood, iron ore and even silk are just a few of the basic materials harvested from the good earth. Add a little sweat and creativity and we have products, an economy and real wealth. This wealth has substance and inherent value.

Then there is the paper-wealth industry, which attempts to make their money by outsmarting others in the paper-wealth industry. They take pride in out-harvesting others in their industry, not by creating actual wealth. The paper-peddlers who can create the most complex scheme is the one who captures the most hard-earned dollars from unwise investors.

This group knows no bounds when it comes to selling a bright future to their marks. Most investors gamble in two ways; either by trusting paper-wealth-creators to create value, or by buying financial products they don't understand. One wonders if the typical financial sales person understood what he was selling. If he did, it might be time for a Gray Bar Hotel experience.

As you see now, Wall Street's big gambling houses bore names that resembled banks, but did not create value.

Take a grander view of the landscape. On one side, you have the real economy with producers creating value, and on the other side, you have the financial district and their artificial wealth paper sellers, which at best can only offer a claim-check for a hopefully bright future. Your claim-check, which is your monthly account statement, is just like the one a dry cleaner gives you in exchange for your suit.

The dry cleaner has to protect and deliver your suit. Not so with the paper wealth people who make you sign an acknowledgment, warning that, “Past performance is no indicator of future performance”. This translates; “Invest with me at your own risk, Buddy. I warned you.”

What hard-working value-creators are just beginning to realize is that they handed the fruit of their labor through Alice’s Looking Glass to a not-so-real-world of paper wealth, expecting to reach back through the mirror in the future and magically pull out big gobs of cash. The problem is that the paper wealth guys and gals took the cash, offered hope, but didn’t did do any actual work to produce real wealth. The workers handed their futures to the gamblers and America lost.

Now that the Paper Wealth Creators are exposed, people are realizing they can’t reach back through Alice’s Looking Glass for their retirement funds.

This has caused the paper wealthers to go to the government for help. May I remind you that, you and I are the government. You and I are going to ‘make good’ their promises. In other words, working people handed them something of value and it was squandered - vaporized. Then in turn, the money industry comes back to the very same working people asking to be bailed out.

They want us to give them money so that they can give us money back. Do you see the circle? Our common problem is much larger than a few upside-down homes or retirement accounts.

The problem is one of artificial wealth creation. Paper wealth is the problem. We cannot continue to inflate our money supply without damages.

Here is the little secret. Whoever gets to increase the money supply gets to enjoy the increase. Our banking system works in concert with the government to increase the money supply. They will not feel the pain the working people will. They reap benefits without producing wealth.

I make no apology for my view of the paper-wealth-economy and my distrust of the ability of the government to do what’s best for the voiceless little guy.

For years I have predicted this mess, warning that there will be many unhappy campers. The Savings and Loan Crisis, Black Monday, and the Tech Stock meltdown of 2000 were for practice.

It is not a question of how much longer until it gets better. It is a question of how much worse it will get. Many will have to start over if they don’t quickly preserve what they have placed in trust with the Paper-Wealthers.