GO HERE AND LISTEN TO THIS MUST HEAR INTERVIEW WITH CHARLES CALOMARIS

Points of Interest:

- The forming of the fed and investment banking

- The size of the role Fannie Mae and Freddie Mac in the crisis

- The moral hazard and history of Deposit Insurance

- Historical Crisis's compared to todays

- Politics Role in risk taking

THIS IS A MUST HEAR

Full Hearing for Ron Paul's Audit the Fed Bill, H.R. 1207 9/25/09 from Minnesota Chris on Vimeo.

Watch these interviews with some authors you should familiarize yourself with

So let's take a look at some of our previous asset bubbles in history, and look foward to better protect ourselves from economic inevitabilities.

The Dot-Com Bubble - IPO after IPO was lining up investor portfolios while the companies themselves usally had little or no revenue models, but everyone assumed these would continue to raise in value from the sheer fact they were Dot Coms. In this assumption many banks made firm commitments in their underwriting deals so when it burst it took out banks and investor portfolios.

The Housing Bubble - While Mortgage Agencies like Ginnie Mae, Fannie Mae, and Freddie Mac have been around for a long time acting as an engine to provide affordable housing in effect creating excess demand for it, it wasn't till Greenspan lowered rates to fight the Dot Com Bubble and effect of 9/11 by shifting investors eyes towards housing with super low rates. From here, we all know the story of how bad creditors were given mortgages, how good creditors over extended themselves with variable mortgages. Other factors at play are the community re-investment act, lowering rates to help finance the iraq war, and the myth that housing only rises in value.

The real kicker is the securitization of all these securities by these mortgage industries, which lined many portfolios of banks and investors... so once again when the demand for the underlying asset finally dried up so did all the securities and portfolio dependant on it... another bubble.

Afterwards... I spent some time thinking about this and was like well, how can we identify the asset bubble? After all the reading in austrian economics and logic, find an asset who's value is rising despite waning demand, and you'll find you bubble. Thus the I concluded the next asset bubble must be the treasuty bubble, why?

- Foreign demand for treasuries, especially long term treasuries is dropping.

- This means that in order to keep rates lowering (which raises the dollar value of treasuries), artificial demand from the primary dealers via repurchase agreements from the federal reserve.

- In order to pay off these re-purchase agreements the Federal Reseve must print new money (thus monetizing the debt)

- If the fed does not monetize the debt the value of these treasuries will drop  as rates rise causing a devastating effect to the fed who has a large treasury position from shoring up bank balance sheets and helping finance the stimulus and tarp programs.

- Eventually even the fed can't monetize the debt, which will mean the primary dealers demand for treasuries will diminish causing a rise in rates which will devestate the fed, banks who's more and more moved to treasuries to recover from the mortgage backed securities, and investors who have "flown to quality"

- So once again investors who didn't anticipate will be devastated but the government will be able to do nothing cause there will be no one to finance their debt, and they will be forced to make LARGE cuts to their many entitlement programs and foreign entanglements which are causing the debt they won't be able to monetize any longer.

When I came to all these conclusions I was hoping I was the first who came to this conclusion since I hadn't quite heard it put this way before. After a quick google seach safe to say this is already being predicted by many honest economist like this article here by Trace Meyer.

How do you protect yourself from this asset bubble:

to protect yourself from any asset bubble you must diversify into assets that have little relationship to the inflated asset, this case being treasuries;

Commodities: While commodity prices will raise and drop, when a governments economic structure drop commodities will always prove to be a safe haven as the demand from other nation will make sure that there is still value to things like Gold and Silver.

Currencies: Parking your assets in currencies where there is little and no tie to the US dollar, and monetary policy that isn't going result in the same issues as we are seeing with the dollar.

What specifcally consult a firm like Europacific capital or other firms that deal mainly with commodities and foreign investments or even park it in ETF's that deal with Commodities and Foreign investments as well. It's up to you to protect yourself.

i'll be having some new videos soon talking about what's been going on and other issues but I wanted to talk about some great reading for those who find what I have to say interesting and would like to explore these topics deeper.

In general mises.org has everything you need to become an economic expert, or at least informed pundit like myself.

But here are some great books to start with:

Economics in One Lesson - Henry Hazlit

The Politically Incorrect Guide to Capitalism - Robert P. Murphey ($14 Bucks!!!)

The Politically Incorrect Guide to The Great Depression - Robert P. Murphy ($7 Bucks!!!)

Meltdown - Tom Woods

Last I leave with a great video of Walter Block talking about the oncoming depression: